“Out of control student loans: The Real Deal” |
| Out of control student loans: The Real Deal Posted: 27 Oct 2010 01:37 AM PDT Syracuse (WSYR-TV) - The average student graduated from college this year with more than $24,000 in student loans to repay. A loan of that size is already a significant burden, but because of changes in the student loan industry, young professionals are now finding it much harder to consolidate those loans. After high school, Barry Masterson decided to get an associates degree at ITT Tech. "They said, 'We'll get you your loans and everything,' they handed over a paper - you signed it and he said, I'm good for school," Masterson said. He didn't think too much about the cost of school until after he graduated in 2008 and his first bill arrived. Initially, between his federally funded and private loans, Masterson was asked to pay $750 a month. Because of his debt to income ratio, Masterson's payments were lowered to $375 for the time being. "90 percent of that loan that I pay per month, that $375 goes straight to interest," Masterson said. His federal loans have the standard 6.8 % interest rate but his private loans range from 9 to 11.25%. He's been trying to consolidate since graduation. He's never been late on a payment and his dad is a co-signer but he's still had no luck. "I've called banks, done research on the internet, sent in applications, haven't heard anything. even on their websites they say we aren't accepting loans at this time due to economic problems and stuff like that," Masterson said. The economy aside, a recent change in federal law has forced private student loan lenders out of the consolidation business. Now students can only combine federally backed loans for a better interest rate. "I was kind of clueless as far as interest rates go," Masterson said. And now he will be paying for it for a long time to come. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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