Colleges are now suing students for loan defaults

Paying for College
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<p>For the first time, the amount of student loan defaults exceeded that of credit card defaults. Colleges are starting to sue their past students who default on loans. For example, both Yale and Univ. of Penn have filed dozens of suits. One school. George Washington University, filed a suit against a student for $4,000 of unpaid Perkins loan money, which generally goes to low income families. It is becoming a HUGE problem. Even worse,student loans can't be discharged in bankruptcy! You are stuck with them for many years!</p>

<p>This confirms what I have always said for years and have published numerous posts on this: No matter how prestigious the school, don't go there if you are going to incur substantial undergrad debt! There is nothing wrong with a state university. In fact, top students might be able to get full or almost full tuition from these public schools..</p>

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<p>That is so right,unfortunately we don’t see this coming.</p>

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<p>The schools are being forced by the gov’t lender to sue the students for non-payment. Read the NYT article.</p>

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<p>^Do you have the link for the NYT article?</p>

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<p>Here is one version: [Yale</a> Suing Former Students Shows Crisis in Loans to Poor - Bloomberg](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>

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<p>I wonder if the legal fees would cost more than what they could get from an unemployed college grad or an underemployed college grad?</p>

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<p>"schools making Perkins loans aren’t required to offer financial counseling for students "</p>

<p>OK, that’s one problem. But it seems to me the schools’ money would be better spent on job placement assistance than law suits.</p>

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<p>It’s not the school’s choice to file these suits. They are required to if they want to stay in the Perkins loan program.</p>