President Barack Obama joined David Karp, the founder of Tumblr, for a live chat about student debt Tuesday. One-third of Americans who applied for an educational loan this year also have a Tumblr account, said Karp, who fielded questions about educational costs submitted by Tumblr users. Here’s what POTUS had to say to today’s students.
My student debt was manageable, unlike yours.
Obama said that when he graduated with an undergraduate degree he was able to pay off his student loan debt in a year with a job that wasn’t particularly high paying. But today student loan balances average about $30,000.
Following up on Josh’s post, “We Need a New Kind of Financial Advice,” I’d like to posit the following, to be taught in all schools and financial literacy courses immediately:
For most of us, debt management is part of being an adult.
Right now, the standard financial advice is get out of debt immediately because debt is bad. Or, the more nuanced version: because the longer it takes to pay off your debts, the more you have to pay in interest.
If you were to guess what the most popular piece on The Billfold is, what would you say? The story that readers from all over are looking up and reading on a daily basis isn’t about how compounds interest works or the difference between traditional and Roth IRAs—it’s this piece by Anna Moreno, about when she defaulted on her student loans and what she did to get back on track.
Any Billfolders graduating college come May? Grad school? Commencement-themed porno to participate in? DO THIS. I will be your best friend. Or post a photo of it. SFW only.
Well this is very uncool, via the NYT: “Student Loans Can Suddenly Come Due When Co-Signers Die, a Report Finds.”
A few weeks ago when we talked about the guy with 13 kids, I mentioned how I liked the idea of my kids “working their way through college” like my parents did. Many of you were quick to point out that this was no longer feasible, that “working your way through college” now means ‘working your way through college and then also spending the next decade or more paying off your student loans.’ Which, come to think about, is exactly my experience.
Karen Weise at Businessweek breaks down a proposal from a group of “student-aid advocacy and research organizations” whose aims are to simplify student loan repayment. The plan includes “auto-IBR,” or automatically enrolling all federal student loan borrowers in a repayment plan based on income, and then collecting payments through an employer withholding system. Whoa now.