Bill Boegeman: "Exploited" by student loans?

Student loans: Interest rates keep borrowers in the hole - Something’s wrong when $6,000 in payments cut debt only $700.


Between my three banks, my total student loan debt as of Oct. 17, 2014, was $82,961.02. That’s how much it cost me to get a B.S. in social studies education from Minnesota State University, Mankato.

It was worth every penny. My education readied me not only for teaching but for life. I am a better person today because of the things that I learned at Mankato, and the knowledge and skills behind the paper diploma I received. Do I wish that it had cost me less? Yes. Do I think that it should have cost me less? Absolutely. Higher education is way too expensive in this country, and even though my debt is partly the result of more than three years of untouched accumulated interest, it’s still a travesty that anyone could end up $80,000 deep for a four-year degree from an in-state university. That said, if I could go back in time and see that price tag, would I still do it? You bet.

Here’s the part that really makes me mad: For 12 months, I have been making student loan payments of just over $500 a month. That means that over the course of a year, I put about a $6,000 dent into my student loan debt, or so I thought. On Oct. 17, 2015, a year to the day after I began paying off my loans, my total student loan debt was …


If you don’t have a calculator handy, that adds up to just under $700 less than I owed a year ago— $700 out of the $6,000 I put in that actually went toward reducing my debt. That’s about 11 percent of the total amount paid, just enough to reduce my total debt by almost 1 percent. Where did the other 89 percent ($5,300) go? Interest.

That’s messed up. I mean, c’mon, man, I understand interest. That’s why loans exist. The lender needs to see a return on their investment. I get it. But this is more than a return. This is a rip-off.

Full disclosure: I am making minimum payments. Had I chosen a different repayment plan and paid a little more each month, that huge debt would undoubtedly be just a little bit slighter, the percentage reduction a little bit greater. But the key words are “a little bit.” Either way, the lenders still win big. And those other repayment plans sucked anyway.

Could I afford a little higher payment if I cut out some social outings, canceled next summer’s travel plans, and scratched my monthly subscriptions to HBO and the WWE Network? Yeah, probably. But I enjoy those things, and I don’t want to sacrifice the quality of life that I enjoy today just so I can pay my loans off by the time I’m 48 as opposed to 52.

Some people say that these things are not mutually exclusive — that you can spend for today while also saving for tomorrow. That might be true if you’re making bank, but it’s not exactly true if you’re not. Every dollar spent now is a dollar not saved for later. Every dollar saved for later is a dollar you can’t spend now. And when you don’t have a ton of money left over at the end of every paycheck, this does turn into an either-or scenario. Either you enjoy life now, or you enjoy life later. In other words, you’re either making bank, or you’re making decisions.

At the end of the day, I don’t expect people to feel bad for me, a middle-class white guy who, immense student loan debt aside, has it pretty good. However, I do expect people to be angry at those financial institutions that are keeping me, and millions of others like me, from having it a little better. Those white-collar crooks who rig the game in their favor and then force us all to play.

Those lenders who are preying on the vulnerable, exploiting those in need of help for their own personal gain, and exacerbating the enormous gap that already exists in this country between the haves and the have-nots. As for me, I’m hoping our political leaders will figure something out, that they’ll come up with some kind of combo-platter solution that offers forms of student loan forgiveness mixed with caps on the exorbitant interest rates our lenders currently are allowed to charge. Until then, I’ll just continue being one of the millions of screwed-over young adults in this country, lucky and privileged enough to receive a college education, but not blessed enough to be born in an era where this kind of exploitation has been outlawed.

  • My daughter paid her way through 4 years at Mankato, She started working and saving at 14 for college. She graduated in 2007 debt free
  • A simple math class or finance class would help Bill understand interest
  • Was Bill exploited? No way!


  1. I worked the numbers--MSU-Mankato takes about $16k/year now--and I'm thinking the only way he gets to $83k is to go five years (a heavy course load of 12 credit hours per semester, boy that's tough!) without making any attempt to work his way through school.

    And if he adds $100/month to his payment, he cuts off ten years from his maturity date. Scary that this guy is teaching kids!

  2. Counterpoint: Math on student debt doesn't add up - Borrowers must take responsibility for understanding interest rates. And here’s a way to pay loan off faster. :

    There are a number of things that Bill Boegeman overlooked in saying that student loans issued by financial institutions are exploitative and unethical in the amount of interest they charge (“Interest rates keep borrowers in the hole,” Oct. 26). Interestingly, the things he has overlooked illustrate the mind-set of many Americans who find themselves in too much debt. I can’t speak to absolutely everyone’s situation, but in many cases, it’s a lack of responsibility that digs financial graves.

    The first thing Boegeman overlooked, or failed to understand, is the interest rate on his student loan. In fact, he didn’t even mention his interest rate. Using the numbers he did provide, I was able to calculate the interest rate on his student loan — 6.4 percent.

    Financial institutions aren’t out to “rip people off” on their student loans. If they were out to rip people off, student loans would not be where it happens. Credit card interest rates, which are also unsecured loans, charge an average interest rate of 14.5 percent — over double what Boegeman is paying. Financial institutions aren’t at war with college students. Boegeman is like many other Americans who find themselves in immense debt and have failed to understand the terms of the loans and take responsibility for them. He has decided that because he has made poor choices in letting the interest accrue for over three years while not making a dent, as well as only making the minimum payments, it is someone else’s fault. So he is asking the government to step in and help refill the financial hole he dug himself.

    Boegeman stated that “other repayment plans sucked anyway” and that he would have to completely sacrifice his quality of life just to pay off his loans by the time he was 48 instead of 52. I don’t know Boegeman’s age, but unless he is 19 years old (which would mean he graduated from college when he was 14), he has miscalculated the horizon for his loan to be paid off.

    Using his current loan balance, interest rate and his intention of making only the minimum payments, he has about 33 years’ worth of payments left. Had Boegeman not let his loans sit untouched accruing interest for three years, his current loan balance would have been $67,349.87 and his loan horizon would have only been 20 years away.

    My advice is as follows. Instead of blaming financial institutions for his mistakes, Boegeman should take ownership for his actions. The best way to pay less interest is to decrease the loan balance, and the best way to do that is to make larger payments. I know he said he didn’t want to have to give up all of the luxuries in his life, like HBO and summer vacations, but it is time he takes responsibility and pays back what he has agreed to.

    Many people in such debt go to the extremes and think they need to move into a cardboard box and eat ramen noodles for every meal in order to get out of debt. They think such things to bolster their case that “white-collar crooks” are out to get them and are doing unethical things to “keep them from having it a little better.” But that is simply not the truth.

    Boegeman can gradually increase what he is paying per month. My recommendation would be to increase the monthly payment by $50 each year. If this were done, the loan would be completely paid off in fewer than 11 years — a far cry from 33 years.

    It is a travesty that so many Americans who find themselves in deep debt are still blaming financial institutions.

    Charlie Glasser is studying accounting at the University of St. Thomas.


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