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Survey Indicates Students Clueless about Student Loan Debt

U

unokitty

Diamond Member
Recent Iowa State University survey indicated that 40% of their students underestimated how much they owed. One in eight didn't realize that they had debt.

What are your experiences? Is Iowa State an outlier? Or is this level of cluelessness normal?

Uno
 
My SO didn't understand her debt until I explained it to her, which I blame her father for. I will never allow my children to be financially clueless.
 
I only took a loan for one semester, so my debt is a lot less than most. However, logging in to their stupid website is such a pain in the ass. I can never remember my password because they have a ridiculously long and complex password policy, and when I change it it has to be completely different from the previous one. So I've given up trying to remember it and now I just do a password reset each and every time I need to log in.
 
Yeah I don't quite understand this. Is it that hard to write down tuition costs, room and board (if you're on campus), books, etc and get a rough estimate of how much it'll cost? You know how much you can contribute and therefore you can estimate the amount you'll have to borrow. Is this oversimplification or do people not understand basic math?
 
clamum said:
Yeah I don't quite understand this. Is it that hard to write down tuition costs, room and board (if you're on campus), books, etc and get a rough estimate of how much it'll cost? You know how much you can contribute and therefore you can estimate the amount you'll have to borrow. Is this oversimplification or do people not understand basic math?
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I guess they don't make 'em like they used to. Only graduated five years ago and I'm feeling way ahead of the curve. I didn't keep my loan disbursements written physically but the amounts were pretty consistent each semester...simple enough to get a shorthand guess.

I read my MPN in depth and saved a copy when I got out of school, and my loan only amounted to just over 15k. I'm wondering how some of these kids can't take it at least as seriously with 10x more in loans.
 
I took a loan out my last semester, I was literally living paycheck to paycheck the whole time and it was causing all kinds of stress not knowing that I had a safety net incase my car died.

I never really understood some of my friends who would get the max amount each semester and blow it on gadgets and the newest things that were out.

I would think that this just applies to college kids, but I have a feeling that it is a reflection of a large percentage of the population as well. Probably the best advice I ever received from a finance major was, "If you don't have the money for it now, what makes you think you will have the money for it later?".
 
Most people do not calculate how much they spend. Some avoid thinking about it altogether and go on piling debt until they are bankrupt.
 
rcpratt said:
My SO didn't understand her debt until I explained it to her, which I blame her father for. I will never allow my children to be financially clueless.
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good luck with that. my oldest graduates hs in 2 days and i have tired and tried to explain to her how student loans work and how college is not free. it just does not sink in.
 
Well, we're talking about the same people that take out loans to get a PH.D. in History expecting to land a tenured, 6 figure job right out of school.
 
OutHouse said:
good luck with that. my oldest graduates hs in 2 days and i have tired and tried to explain to her how student loans work and how college is not free. it just does not sink in.
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Well, my oldest graduates in two weeks and has absolutely 0 aspirations of going to college. In fact, he "knows some guys" that are going to get him a job in construction. Construction! of all things, in today's environment! LMAO!
 
I would bet that most of their debt was spent on unnecessary bullshit too.

I had to read through all sorts of stuff and go through a PIA process to get my loans. I wonder how these people don't know about their debt...
 
OutHouse said:
good luck with that. my oldest graduates hs in 2 days and i have tired and tried to explain to her how student loans work and how college is not free. it just does not sink in.
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Is that like me not being able to learn how to do the laundry right so the wife takes care of it?:sneaky:
 
I somewhat fall into the clueless category. I was reading my Nelnet loan statement a few weeks ago and it said I paid $900 towards a $2600 loan, but still said I had $2300 or so left. They didn't figure in the interest that had accrued over the past few years on the statement...I have no idea why 😵
 
CPA said:
Well, my oldest graduates in two weeks and has absolutely 0 aspirations of going to college. In fact, he "knows some guys" that are going to get him a job in construction. Construction! of all things, in today's environment! LMAO!
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we both need one of these.

photo+1.JPG
 
Nintendesert said:
I would bet that most of their debt was spent on unnecessary bullshit too.

I had to read through all sorts of stuff and go through a PIA process to get my loans. I wonder how these people don't know about their debt...
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Definitely, I returned to college last year using the g.i. bill and I swear every other student I walk by has a pair of beats by dre headphones. It was crazy seeing so many people wearing those rediculously expensive things.
 
I'm in college and I know tons about student loans and debt thanks to the internet and ATOT, but I don't actually have any loans. Strange how that works.
 
Not surprising. Most of them probably have mom and dad handling all the paperwork, so they really have no reason to pay attention.
 
A couple months ago I asked my (sophomore university) students to calculate the total cost of owning a $90/month smartphone for four years if paid with PLUS student loans at 7.9% over a 20 year period. Half of them couldn't do it, the other half were shocked it ended up being almost $9,000. All of them had taken at least calculus 1, but a simple interest calculation was beyond them.

Fortunately, a few have told me since that they got rid of their smartphone and got an iPod Touch - considering you can walk from one of our campus to the other and not drop from the wifi network.

What's truly sad is that this type of basic financial competence is not taught at the K-12 level. ...It's almost as if the powers that be don't want a financially savvy populace.
 
Gigantopithecus said:
A couple months ago I asked my (sophomore university) students to calculate the total cost of owning a $90/month smartphone for four years if paid with PLUS student loans at 7.9% over a 20 year period. Half of them couldn't do it, the other half were shocked it ended up being almost $9,000. All of them had taken at least calculus 1, but a simple interest calculation was beyond them.
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Had to look it up but
image002.gif

P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for.
A = amount of money accumulated after n years, including interest.
n = number of times the interest is compounded per year
 
highland145 said:
Had to look it up but
image002.gif

P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for.
A = amount of money accumulated after n years, including interest.
n = number of times the interest is compounded per year
Click to expand...
You had to look that up?
 
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