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Student loans are easy to get, but they could cost you more than you think. Scholarships are a bit harder to get, but you do not have to pay them back. Before you sign up for a Student Loan check out what CBS's 60 minutes had to say about Sallie Mae, the largest student loan provider, and read some to the articles we have found. You can find the articles here. Student loans are easy to get, but they could cost you more than you think. Scholarships are a bit harder to get, but you do not have to pay them back. Before you sign up for a Student Loan check out what CBS's 60 minutes had to say about Sallie Mae, the largest student loan provider.
Excerpts from
60 Minutes May 7, 2006
To read the entire article click here
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Is Sallie Mae's Success Too Costly?
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"When Sallie Mae was created in 1972 as a quasi-governmental agency, its purpose was to encourage private banks to loan to students who were considered to be a credit risk. It did not make the loans itself.
But nine years ago Sallie Mae severed its ties to the government and became a private lender, much like a bank. That transformation has proved lucrative for Sallie Mae, to say the least. Since 1995, the company's stock price has gone up almost 2,000 percent.
The question is: does Sallie Mae's success come at too steep a cost to students and taxpayers? "
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| Graduation is a day of achievement and promise. But for two-thirds of every graduating class, the future includes serious debt. That can spiral out of control, as it did for Alan Collinge.
"I graduated with degrees in aerospace engineering in 1999. I borrowed about $45,000 for school. Since that time, my student loan debt has exploded to where currently I owe about $103,000," Collinge explains.
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Collinge simply stopped paying and has now started a Web site, www.studentloanjustice.org,
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Asked if he ever considered going into bankruptcy, Alan Collinge says he thought about it. "But in the case of student loans, it doesn't matter because bankruptcy is not an option for the vast majority of borrowers for student loans."
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"Suppose you get hurt and you have to live on disability insurance from your Social Security," Warren says.
The government can attach that.
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It hasn't worked well for some students such as Lynnae Brown. She got loans from Sallie Mae starting in 1985 to go to college and then to film school.
"How much will you have paid them when you're finished?" Stahl asked.
"Over a quarter of a million dollars. $262,383 to be exact," Brown replied.
"For an original loan of what?" Stahl asked.
"$60,000," Brown said.
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It is true that Sallie Mae performs an important service: it has helped 21 million students pay for college.
But there is a less costly way to make student loans, called "the direct loan program," run by the Department of Education. Sallie Mae disputes this, but studies by three different government agencies say it costs taxpayers about five times less per student loan. (Direct Loan Home Page)
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