Submitted by creditrepair on Tue, 04/01/2008 - 16:47.
Suze Orman speaks to Culinary School grad about student loan
Tonight my first guest is Holly says, she is with me from Orlando Florida, and I understand that you graduated culinary school with thousands of dollars in student loan debt and you are already deliquent girl friend and talk to me about this.
Holly says, Yes, suze you are right. I did, I graduated in 2006 from a culinary school and at the time when I enrolled the tuition was $40,000 well on paper that looked great but now that I am done and the payments are due it's bloom to $119,000 the interest on one of my loans is 16 percent and the other is 7 percent who knows if it will ever go up and or down. I feel like I don't know where to turn, I mean, I work as a pastry chef now and I finally after graduating and going to a different job here and there fell like I found my niche but I am working for people who pay me $7.00 an hour.
You know my dear Holly says, you are not the alone, do you know the average pastry chef , the average person working in this area, when they first start is approximately $9.00 an hour $9.50 right in there according to this article I was reading New York Times, do you know about that?
Holly says, that I was unaware of.
So to be honest. Right so here you are you go to school you get a $40,000 loan, how long did you go to school for?
Holly says. It was a 15 month program there was 12 months of schooling and 3 months of externship program.
so for 12 months of schooling this is one of the most expensive kind of schooling. think about it. 12 months $40,000, I have also read that 11 percent of all students who go to culinary school are currently in default of their loans so you are not in the minority. The truth of the matter is with the average salary as $7,9.10 dollars an hour owing $40,000 which most of it as a private loan at 16 percent on that much money how do you ever get out of it?What are you monthly payments?
Holly says, exactly to the best of my knowledge the last time I looked one of them is upwards of $500
Alright, so you are upwards of $500 probably if you are owning this much money you are upwards of altogether of all your loans about $650 are you not per month
Holly says, that is right.
So you owe $650 a month, now I just heard you say the last time you looked why is it you are not looking all the time?
Holly says, to be honest, I think it is a shame that, i think the reality that I just don't earn enough money and I to me it is not responsible but I feel like if I don't face it, it can't upset me
Suze says, do you get that in my opinion they are so wishing and praying hoping that you don't face it? Cause the more you go into default, the more you are delinquent, the more as you just heard me say this on a recent show the more legal rights they have against you. The more your loan increases and you can't do anything about it because you can't claim bankruptcy on a student loan
Holly says, that I knew. I feel completely helpless to the point where my parents have to help me out and my father, both of my parents are retired actually. My father will send them like $270 every couple of weeks and they will still call me 3 to 4 times a day because even the fact that we are trying to make an effort and trying to give them something isn't enough.
Ethically speaking, before you even took out these loans they should of given you the facts how many culinary students default on their loans, what is the average wage truthfully when they graduate and is it even realistic that you could pay back those loans. Did anyone have these discussions with you before you did this?
Holly says, no, when I went to the school and filled out all the paper work there were work sheets we went over. What I find funny is initially the worksheets I filled out at the school, they listed my payments once I was finished about $215 dollars a month. Hey, to me that was reasonable
Holly says, if they had told you that your monthly payments was going to be close to $700 a month would you have gone to school?
Holly says, no. I mean as much as I love what I do and how passionate I feel about this business I would have gone to a community college and paid 1/3 of what I paid and know that I would be able to pay it off and not be crying and not wonder how am I ever going to survive how will I ever make something of a career I choose?
Suze says, So everybody as you are watching Holly says right now from home. Holly says isn't your daughter but she is somebodies daughter. Holly says is a women who deserves a good chance in america to make it this could be your daughter this could be you. What we need, and I often don't get political here on the suze orman show but we need to make it mandatory that when a student signs up for a loan that he or she knows before hand what exactly the monthly payments are going to be, exactly ramifications, some institutions such as this culinary school does not give this student the correct information and literally baits and switches them so to speak where they come in for something and they get something else it is that school that is liable in my opinion for the amount of money owed cause this just isn't correct. But it is how it is right now until all of you get off your duffs so to speak and start to change the laws by how you vote and everything else. Alright and we are in this situation even though you are rolling the dough out every single day you are not rolling in the dough what kind of cook here girlfriend. Here is the thing, we need to get you current in your loan because when you are in default you can not go into deferment or forebearance which are the 2 entites that are allowed supposedly when you can't pay a loan.
Whatever we can do. You could all get a credit card maybe they extend you some money where you can bring yourself up to in current on your student loan and then you can immediately go into deferment there so you don't continue to in default which then will effect every thing else that you do. If there is a way for you at all to figure out how can you do that. And then what you might have to do for just a short period of time is get yourself either a better paying job than what you are currently doing another job, another job besides that other job. But whatever you can do to make the money to pay off this loan and the #1 loan that has to get paid off is what, it is the one that is at 16 ½ or 17 percent that is the one that really getting to your. That is the one you have to tackle, is that going to be easy, it is not going to be easy. It is not going to be easy, but will you be able to do it, you will.
But you have to make more than $7.00 an hour, and then your goal is to get rid of that $33 000 or $35000 and eventually getting it on a credit card once it is on a credit card. It is a lot easier to deal with then owning the money to a student loan company making sense. I wish to god that I could be cooking something else for you up here. But I can't., but your hands are tied, my hands are tied by the laws that have been put down that keep the children today from becoming that from which they are meant to be. I think we have to change that everybody and what Holly says is telling you tonight is something your kids maybe telling you as well those of you who are thinking of going to culinary school you better do your research because you won't be able to do this
Source: http://www.suzeorman.com/
Bookmark/Search this post with:
