Wow - what a great story. Someone had debt and paid it off :alcoholic: "She and her husband, a dance instructor, owed about $116,000 in student loans and $2,000 in car payments. "I had no idea how we were going to spend the next 10-plus years paying $990 a month in debt. How would we ever own a house, have a child and have any quality of life?".....[I love this line]....So Kroezen and her husband, a native of Australia, decided to do something about it." Good for them...shouldn't this be the norm rather then a news worthy story? How One Family Paid Off Almost $118,000 in Debt - Yahoo Finance
Here is the real story: I'm not having children, don't own a house nor a car and my quality of life is through the roof (of my rented apartment). How in the world did I do that?!
I have to laugh at articles like this. They skipped going out to eat to save money? WOW! I NEVER thought of doing that. My other favorite genius idea is when the writer tells the reader not to get starbucks coffee every morning. That's pure genius, folks! -Matt
They paid largest / most expensive bills first, which is what most financial folks say to do, which is the reverse of the Ramsey method. Dave's strategy is to debt snowball, paying everything you can on your smallest debt first. Then, once paid off, take that same amount you were paying and pile it onto the next smallest, and keep going until all of your bill money is piled onto the final largest bill. We did that- it works great.
Technically it does not matter. Ramsey takes the psychological effect of success into account. It seems to help some to continue with the process if there are positive reinforcements early on.
It's a Yahoo "article". 'Nuff said. The smarter thing to do would not be to attend the Art Institute schools. Tuition is about $18K per year for their Design degrees. Kennesaw State U's tuition is $2500 (plus fees) for 12-15 credits. Even living on campus she still would have been way under the $18K she took from Art Institutes. That is the lesson I will teach my kids. Value for money, future time orientation, opportunity costs, etc. Glad they paid off their debt though, it seems that taking responsibility for ones actions is a lost art in some Americans.
Here is the lesson everyone should learn from their mistake. Never take out $116,000 in student loans for a career with a starting salary of $25,000 and a low demand for new workers. Number of jobs in 2010 was 56,500 Median pay in 2010 was $46,280 Lowest 10% earned $26,380 in 2010 Highest 10% earned $84,900 in 2010 Expected to grow by 1.9% per year (~1000 new jobs per year) Source: Interior Designers : Occupational Outlook Handbook : U.S. Bureau of Labor Statistics
In fairness, she may not have done that. According to the news story, "She and her husband, a dance instructor, owed about $116,000 in student loans". So $116,000 figure represents the student loans for two people. Her share may have been significantly less. On the other hand, even if she only took out $58,000 in student loan debt (half the total) to attend the Art Institute of Atlanta, it still may have been a bad idea. The school is both (1) an art school, and (2) a for-profit, and both of these factors are associated with higher risks of loan default. The cohort default rates for this school (according to College Navigator) were 26.5 % in 2009, and 23.5 % in 2010. In other words, about 1 student in 4 defaults on their loans within three years of leaving this school. Would banks loan money to students to attend this school if they faced a 25% chance of default? Not likely. But in practice, the banks are happy to do it, because repayment is guaranteed by the federal government. The Art Institute of Atlanta is owned by Education Management Corporation (EDMC), which is currently under investigation by both the Department of Justice and the Securities and Exchange Commission:
EDMC is not a big name on this board, perhaps because most of their programs are B&M rather than DL. However, they are thought to be the second largest for-profit education company by enrollment (after Apollo Group, owners of University of Phoenix). EDMC owns Argosy University, The Art Institutes, Brown Mackie College, and South University. Their holdings also include Western State College of Law (in California), an ABA-approved B&M law school.
You are correct I am just assuming that the debt is hers based on two items. First, the total cost of her degree listed at $87,480 plus fees, labs, "kits", etc. provided she did not have to repeat any classes or take additional classes. Throw in a little interest and it could be $116,000. Second, there was also something in the story that she recently graduated and "they" would soon have to start making payments on "her" student loan. I just assumed the loan was in deferment until she graduated. It is bad on my part to assume and I have no idea who accrued the student loan debt. So lets just call it an educated guess.
And … Education Management Corporation (NASDAC: EDMC) is 41% owned by Wall Street investment bank Goldman Sachs … enough said (?). David_Halperin: EDMC Professors and Students Speak: How Lobbyists and Goldman Sachs Ruined For-Profit Education
because folks here do their homework. The average student over-pays and doesn't know or doesn't care. COLLEGE IS EXPENSIVE when you walk in the front door and pay rack rate! Resourceful people will find a work-around, but I've met very few resourceful people in my adult life. Like this nifty little tool: College Affordability and Transparency Center
Too … there is NOT a single educator /academic on EDMC’s board of Directors. How’s that for seriousness in corporate governance? Just more Wall Street (the financial /monetary-driven side of a capitalist economy) vs. Main Street (the real economy: profits, growth and job creation) and the resulting conflict of interests … Education Management Corporation - Board of Directors
The 10 members of the EDMC Board of Directors have lots of impressive qualifications in their biographies -- but they are virtually all corporate-related. Only one of the 10 Directors even bothers to list his academic degrees -- it apparently did not occur to the other 9 Directors that their academic qualifications might be worth mentioning in the website of a higher education provider. I expect that from their perspective, it makes no difference whether the company sells "over-the-counter healthcare products", or "infrastructure sharing services to the telecommunications industry", or "on-demand software solutions for the rental housing industry", or "ketchup, foodservice, and sauces" -- or higher education. So why would academic qualifications matter ?
Hi friends, It's really painful when you get into debt and don't have good earning to pay it back. I really congratulate to those who paid his or her debt. Cheers
