Student Loan Abuse Just As Bad As Mortgage Abuse

http://articles.latimes.com/2008/dec/27/business/fi-collegedebt27

Student loans turn into crushing burden for unwary borrowers: Some who think they are getting a federal loan find out later that they hold a private loan. The difference can be costly.

I am a slave to student loans. I'm paying back more than two and a half times the amount I borrowed. It is a bit disconcerting, to say the least. There is no escape, either. There is no one on our side. And the company that my loans were consildated through have recorded record gains this quarter, I do not have any doubts that our members of Congress are benefitting greatly due to our dilemmas. I know of a few Congressmen off the bat that are in the pockets of the company I owe my lifeblood to. It's not as bad as debtors prison, but it is pretty suffocating, to say the least. This is a mortgage that is worse than any mortgage because you have absolutely nothing to show for it if you cannot go out there and earn 6 digits right off the bat.

The practice of preying on each fresh crop of innocent and financially ignorant 18-year-olds at virtually the moment they become legally able to sign their names to a contract has, in my opinion, imposed an effective regime of indentured servitude, which, under the Constitution, is illegal. But since finance and government are both on the payoff list (as usual), no one will either put a stop to it or make a serious effort to teach children how money and finance works.

"no one will make a serious effort to teach children how money and finance works."

Maybe a job for the parents? And the student themselves?

Most of the people I've read about with Student Loan problems don't seem to understand that they would have to pay any of the money back at any point in the future, particularly not even thinking about how they might pay it back with their $85,000 degree they got in Watercolor Painting from the Monet College of Expensive Useless Degree's in Paris.

Now and then you will see an article about doctors who have not paid back their student loans, despite being employed for the last ten years. Then you have the ones who are refusing to honor service contracts which require them to work in certain hospitals or something like that.

Yes, it's not a good idea to spend $85K on an education which only qualifies you to make as much as a waiter. But we also have people getting PhD's which will never pay for themselves but which are required for advancement in certain professions.

...with 25 years left to pay on my student loans-- currently paying about $700 monthly-- and only ten years or so until retirement. I've been paying since 1996. I will NEVER pay them off, not during my working lifetime. I assume I'll retire to homelessness, because the rat bastard banks will attach my pension. Sallie Mae is just plain evil, IMO.

Would these be the same parents that were supposed to know what they were doing when they took out that sub-prime mortgage? The same students that took out credit cards with 8% interest that jumped to 29% because they looked at it funny? The financial system is WAY too complex for the average person to understand (why do you think so many people call for simplification of the tax system?), not to mention all the people intent on screwing others over.



Yeah, that's a no. Also, blame the victim much?

How irresponsible of me.

Enjoy your brief stay, Mr. Personal Responsibility. :hi:

If I were a bank, I don't think I would loan anyone money for these "degree" programs. There are vocational programs I would lend money for, and I could probably be convinced that Graphic Design and Advertising were worthwhile from accredited universities- but the rest of this stuff strikes me a bit like Barbizon.


Fashion Design and Marketing
Interior Design
Graphic Design
Computer Animation
Digital Photography
Recording Arts
Fashion Merchandising
Advertising and Design

I totally agree. I also acknowledge that I am 100% responsible for the mess I am in in regards to student loans. I can only buy half a house because of that (but at least I can buy a house). That being said, I don't regret the education I sold my soul for. I was dumber than dirt before I went to college. No common sense. I started way behind most people in the logic and smarts department and am lucky to be where I'm at now.

I don't know why he hasn't done it, but I think my brother is still paying and he's about to turn forty. Apparently he refied them or something, anyway, it's relatively cheap credit with a low payment and it just didn't make sense to pay it off when he could pay something else. I don't get it, but then he's never shown me the paper.

It does as if there is no particular reason to pay them off quickly.

And that's where it stayed...no one could re-negotiate a lower rate. :mad:

I graduated in 1996, and I don't remember many (really, any) private student loan options.

After graduation, I consolidated thru Direct Loans which is a fed run program. Different place than where my loans first started. But loan consolidation was hugely pushed around that time. Lots of options.

And it's made a difference. I only hope that today's graduates will be able to do the same. My niece just graduated from a private university with a ridiculous amount of debt (dh and I tried to convince her otherwise during her sophomore year). She maxed out on federal stafford sub and unsub and then went to private loans. She didn't have a scholarship and didn't have grants. In other words, she is tied to a helluva lot of debt, much of which is a high interest rate and is trying to get a job in a horrible economic climate.

loan processing operations. The so-called education is substandard and of no relevance to the fields they purport to prepare the student to enter.

I'd support a proposal to forgive them all and take on the true expense of real education. That would really be an investment in the nation.

There's no point in talking about what degrees should get loans because SOMEBODY will lend the money. These lenders are not at all interested in what the loan is for. As long as they have a debt, they intend to collect, no mater what. Think of all the people that got screwed by their mortgages or credit cards in the past decade. Why should we think for a second that student loans should be any different?

I went to an art school for two years before I realized that I was being had. Every loan that I took out went directly to Sallie Mae - no bidding, no federal loans, just an application to Sallie Mae. Not to mention that the 'education' I was given was sub-standard at best, with zero transferable credits. I'm now tens of thousands of dollars in the hole with nothing to show for it.

Where's my bailout?

(Edit - spelling)

When lenders make a loan for a business, they consider all kinds of factors, like the experience of the operator, the soundness of the business plan, and the possibility of failure. The student loan programs treat all educations alike, whether they lead to degrees in fields where there is a high chance of employment (nursing, for instance) or a very low chance (acting, for instance).

We need to value student loans according to the criteria that serious lenders use for business loans, if we did that, just about everything on your list would never get approved.

When I went to college in the stone age, the government loaned me money. I repaid it at a ridiculously low rate (I think 3%). It was almost painless.

Making a killing off people's education is only second worst to making a killing off their health care, imho.

non-transferable credits and I had to start over

:kick:

STBX's sister got into a great internship the summer before her senior year of college. The credit for it was through FIT, so she had to pay tuition and room and board. Problem was, she'd maxed out her student loans for the year at college, so her mom found the best private loan offer she could find. The mom was turned down as a co-signer (their credit's awful), so we got the call. I told STBX that I wouldn't let him sign anything we hadn't read, and I will never forget reading through that piece of garbage! For a $5K loan, she'd end up paying $15K!! Highway robbery! We paid for it ourselves instead, figuring we were in a better financial position to pay it off ourselves than end up paying it at some point if she had to go into deferment or anything.

:kick:

Kicked.

just about $200,000 (that's for an undergrad degree, a phd, and a dvm). i will owe money for the rest of my life (and beyond). i wish it weren't that way, but how else can someone from the lowest classes move up? i'm thankful all my are federal loans, and that my husband has no loans so all his life insurance can go to any children.