Archive for the ‘Federal Government Student Loans’ Category

Peter Schiff on the Feds & Student Loans


What does economist and popular video blogger Peter Schiff say about the federal government’s influence on student loans?

Please watch this video: Peter Schiff on college tuition

Schiff says that colleges would not hike tuition if federal government loan programs did not in exist.  In other words, if there were no federal government student loans available, the colleges could not increase tuition.  Thus, the feds give the colleges the right to jack up tuition to astronomical proportions.

What do you think?

Schiff also says that the value of a Bachelor’s degree is now lessened because virtually anyone can receive this degree.  Thirty, forty years ago, a Bachelor’s degree meant something.  Schiff says to be competitive you now need a Master’s or a PhD.  That means years in school and years of student loans.

There is one point in particular we’d like to comment on: Schiff states when his father was in college, he worked summers as a waiter and that was how he paid for school.  Although we agree with this work ethic, Schiff must understand today’s world is very different.  College students are now expected to work at unpaid internships for forty hours or more a week.  This internship is expected to lead to excellent contacts and a job after graduation.  Yet in this deep recession, students are not receiving these job offers after graduating.  So all of that hard work and time gone into an unpaid internship is not being compensated in the end.  The Catch-22 is students need these internships on their resume.

Another hard fact of this economy is summer jobs are few and far between.  Full-time workers are now taking these extended summer hours.  And with state budget cuts, municipal swimming pools and daycare programs are now being cut.  Thus, the college student on summer break has little opportunity to make money.

Let us know what you think of Schiff’s commentary.  Are the feds really to blame for this college financial aid crisis?  Do you foresee the cost of college to keep rising until it’s simply not affordable for anyone except the very wealthy?

Please click on these two article titles for more information on this subject:

Unpaid Internships, The Future

Future of Tuition

Thank you for all the continued support as WPC.  Please keep writing us and suggesting what you’d like to see on our site.  Have a wonderful and safe Memorial Day weekend!

~ the WPC team

© White Picket College, 2010

Ryan Wrote Us Back!


We’re happy to report that Ryan Durosky, the subject of our previous blog post entitled CNN High Price of College, wrote us back.  Here’s what Ryan says:

I feel the need to defend myself with respect to the attacks made in this blog. First, I have no reason to make up the numbers. Here’s a breakdown for everyone who’s confused. 275K = 180K (4 yrs. tuition at NYU) + 35K (capitalized interest) + 60K (expected interest to accrue from 5 private loans with variable interest; some as high at time as 12%). Does that make sense now?

Yes, I had the opportunity to study abroad but it was the same tuition as that offered on the NYC campus so if people are going to start snooping around profiles they should also go the university site to see the actual costs. Fortunately, my grandmother footed the miscellaneous expenses related to that semester which were not very high. It was an amazing experience to study abroad. I would recommend it to any student.

Let me know if you have any more questions


Thank you Ryan for telling us your entire story.  We appreciate you taking the time to write us back.

I feel that I now understand Ryan’s story in its entirety.  I know how the $275K breaks down, thus I sympathize more with his plight.  However, I do wish CNN would have included the break down in their report.

Yes, Ryan, I studied abroad as well for a semester and highly recommend it.  Kudos to you for taking advantage of this opportunity.  And kudos to a very generous grandmother.

We can learn a bit more from Ryan’s situation in his response.  As we say here at WPC, do not take out private student loans if possible.  If you must take out loans, stick with Stafford subsidized loans (first choice) and Stafford unsubsidized loans (second choice).  Why?  Because a Stafford loan has a 6.8 percent interest rate vs. private loan rates which are variable and can be up to double the Stafford percentage — as Ryan notes.

Also, no one has yet to bring up NYU’s record with awarding college financial aid to its students.  In 2009, The Princeton Review rated NYU as the college where students are most dissatisfied with their financial aid.

So there you go, a fuller scope of Ryan’s story.  To read Ryan’s story in full, please read his CNN commentary.

Ryan, if you read this, thank you for sharing, best of luck and please keep us posted on how you’re doing.

~ the WPC team

© White Picket College, 2010

CNN High Price of College


If you missed the May 24th special report on CNN American Morning, here is the video link and commentary to:

The Cost of College: Dream school, nightmare debt

The report discusses Ryan Durosky, a graduate of New York University.  He received a Bachelor’s degree in business from NYU and graduated with $275,000 in debt (including loan interest).  He regrets the decision of attending such a high price school, since he passed up a full scholarship at a lesser name institution.  Following a lay off from his post-graduation job, he admits he wasn’t thinking about future consequences.

When I first read the astronomical number, I was aghast.  $275K?!!!  On what?  Yes, NYU is very expensive (I’m a graduate of their Master’s program), but total student debt would be more in the price range of $200K.  Where did this extra $75K come into play?

Take a look at the blog comments under the video.  A commenter found his profile on LinkedIn.  Here is Ryan’s profile.  Now take an even closer look.  Do you notice something very expensive … perhaps a semester abroad program in Florence, Italy?

Well, I’m very divided on Ryan at this point.  In the CNN interview, he admits to not being financially responsible at 18 years old.  But what happened to 19, 20, 21 and 22 years of age?  That’s where I’m a bit confused.  Also, it seems as if Ryan took out everything in loans: tuition, fees, books, room and board, living expenses, etc.  It seems as if he didn’t contribute a dime to his education.  That would’ve been fine … provided his parents were footing the bill.

Thus, I believe Ryan’s story is one of financial irresponsibility and neglect.  And the irony of all of this is he received a Bachelor’s in business.  I hope he learned his financial lesson and it makes him a better businessman.

Ryan seems like a more responsible young man now.  He lives in Pennsylvania and commutes four hours total a day to his job in Manhattan so he can live cheaply.  He also has paid $12,000 down on his college debt.

Ryan did say one thing that keeps resounding in my head.  When the reporter says, “You talk about the American Dream.”  Ryan responds, “It’s almost become an American Nightmare.”

My heart does go out to Ryan because so many others are in the same situation.  I graduated with a Master’s from NYU last year.  I completed my degree in two years, as fast and as cheaply as possible.  I used approximately $15,000 of my own money toward tuition, received around $8000 in Dean’s Scholarships and I was a commuter student — no room and board expenses.  I rarely bought books, utilizing the library and the Internet.  And I still graduated with a significant amount of debt.   Not anywhere near Ryan’s, but still a significant amount that I must pay out over the course of 10 years.

A federal government student loan, even a subsidized Stafford loan, doesn’t have an excellent student loan rate as it did several years ago.  In fact, college loan consolidation is nearly impossible, which drives up the monthly payment.  This is one of the main reasons Ryan and others like him are in this position.  The monthly payments are now stifling, such as Ryan noted, his first bill was $1020.  This is not uncommon.

Many student loan monthly payments are $700.  That is more than a mortgage payment for most first-time condo or co-op buyers.

As Ryan sadly states he had an American Dream of getting married, buying a house and having children.  It’s a simple dream, but he doesn’t feel it’s tangible anymore.

What do you think about Ryan’s situation?  Is the American Dream still possible in this country for graduates with crushing student loan debt?

Please let us know.

~ the WPC team

© White Picket College, 2010

CNN Morning for Monday May 24th


Tune into CNN’s American Morning from 6 to 9am EST tomorrow, Monday, May 24, 2010 for a special report on “The High Price of College.”

Once CNN comes out with the definite schedule later today, we’ll let you know.

~ the WPC team

© White Picket College, 2010