<p>the-555000-student-loan-burden:</a> Personal Finance News from Yahoo! Finance</p>
<p>At what point should leanders say No to more debt?</p>
<p>Like the housing crisis where people borrowed against their equity or bought homes with no money down--and there part of the porbalem was with lenders not saying NO...</p>
<p>when should lenders say NO?</p>
<p>The only way lenders will say no is when the law is changed to provide that educational loans above a certain amount CAN be discharged in bankruptcy. If these loans were judged by the same criteria as other loans which CAN be discharged in bankruptcy, the lenders would be more cautious in making them.</p>
<p>A physician clearly has the earning power to pay back a half million dollar loan. Just because she made foolish choices doesn’t mean she should be let off the hook.</p>
<p>So student loans cannot be discharged at bankruptcy and she will have to pay, yes?</p>
<p>Actually, only FEDERAL student loans are immune from discharge in bankruptcy. Students with the truly staggering debt are not just borrowing federal loans … those are capped. Private education loans are what is really pushing up debt. We see it over & over on this website. Students want what they want … parents want them to have it. It’s a reflection of our “I want it, I deserve it, I am going to have it” society. Look at credit card debt, mortgage debt … people have to know that they can’t afford their debt. They just don’t care, because they are living for TODAY.</p>
<p>Sorry, Kelsmom, that is just not true. The law was changed a few years ago and now, while technically possible, it’s extraordinarily difficult to discharge PRIVATE student loans. That’s WHY the amounts borrowed have mushroomed. </p>
<p>I hope linking this doesn’t violate TOS:</p>
<p>[FinAid</a> | Answering Your Questions | Student Loan Bankruptcy Exception](<a href=“http://www.finaid.org/questions/bankruptcyexception.phtml]FinAid”>http://www.finaid.org/questions/bankruptcyexception.phtml)</p>
<p>*Students with the truly staggering debt are not just borrowing federal loans … those are capped. </p>
<p>Private education loans are what is really pushing up debt. We see it over & over on this website. Students want what they want … parents want them to have it. </p>
<p>It’s a reflection of our “I want it, I deserve it, I am going to have it” society.*</p>
<p>kelsmom is exactly right! </p>
<p>However, I’m not too happy with the federal Parent Plus loan situation either. Does anyone counsel the parents about whether they’ll be able to take out these loans again and again…until graduation?</p>
<p>The mandatory loan entrance counseling does go over what payments will look like for various debt loads, but unfortunately, most just click through the screens.</p>
<p>“The mandatory loan entrance counseling does go over what payments will look like for various debt loads, but unfortunately, most just click through the screens.”</p>
<p>I didn’t even have anything like that for my private loans, though I did for federal and paid attention. My parents went to the bank and took out my private loans, in my name, before I even woke up. I didn’t even sign anything. Seems strange.</p>
<p>Jonri, thank you for the link. I always tell students that student loans are not dischargeable in bankruptcy, so at least I have been correct. I don’t want students borrowing any more than they need to borrow. Unfortunately, it is not ultimately my call.</p>
<p>PLUS loans are a “service” provided by the government. When I see freshman parents borrowing $15,000, I cringe & wonder if it’s not actually a dis-service at times. I just hate to see parents burying themselves in debt … particularly when they are not the ones in control of the situation. What I mean by that is, a student who borrows a lot <em>might</em> feel compelled to do well so that he/she can pay those loans back down the road. A parent cannot “do well,” though, and must rely on the student to come through for him/her.</p>
<p>PLUS loans are a “service” provided by the government. When I see freshman parents borrowing $15,000, I cringe & wonder if it’s not actually a dis-service at times. I just hate to see parents burying themselves in debt</p>
<p>Gosh…and you wonder how many “do the math” and multiply that number by 4 (or more if they have other kids to put thru college). </p>
<p>I wonder how many run out of borrowing power by the 2nd or 3rd year?</p>
<p>^^my guess is alot of them do
I have a close friend at BU who claims she’s only paying 10k/year…which doesn’t sound too terrible…
But then she told me out of her aid package, 16k was in LOANS!!! That’s 26k/year. This is a girl who wants to go to medical school
I try to tell her she’ll run out of borrowing power, but she doesn’t believe me
She’s trying to “keep up with the joneses” and she can’t afford it…and it breaks my heart that she really thinks she got a good aid package!!</p>
<p>Plus, next year her brother won’t be in school, so her EFC will go up!</p>
<p>Yikes!</p>
<p>It’s a amazing that someone with $16k in loans in their FA package thinks she’s only paying $10k (the leftover amount). And, you’re right, her EFC will likely double next year once her brother leaves school. Yikes!!!</p>
<p>BTW…who took out those loans? She can’t sign for $16k in loans for one year. Is some of that Parent Plus loans that her parents are responsible for? Or, did they co-sign loans that she’ll be responsible for? </p>
<p>I think she’s going to be a future poster child for big student debt.</p>
<p>Some of them are stafford, some parent plus, and a few are the ones her parents co signed. She is literallly going to be 100k in debt after undergrad…plus med school </p>
<p>I feel so bad for her…but she really hasn’t got a clue what she’s gotten herself into</p>
<p>Rocket…</p>
<p>Show her these links…</p>
<p>[url=<a href=“http://www.finaid.org/calculators/loanpayments.phtml]FinAid”>http://www.finaid.org/calculators/loanpayments.phtml]FinAid</a> | Calculators | Loan Calculator<a href=“here%20she%20can%20figure%20her%20future%20payments”>/url</a></p>
<p>[url=<a href=“http://www.finaid.org/loans/studentloan.phtml]FinAid”>http://www.finaid.org/loans/studentloan.phtml]FinAid</a> | Loans | Student Loans<a href=“have%20her%20scroll%20down%20to%20the%20last%20section%20about%20max%20student%20loans%20for%20med%20students%20%20-%20that%20number%20includes%20undergrad%20Staffords”>/url</a></p>
<p>Thanks mom2. I’ll be showing her that most definitely…</p>
<p>It is hard to figure out what a REAL financial saftey will be when we don’t know where a student will get in–and what aid packages will really look like…and at the same time there is no way I want to carry that kind of debt nor have our stuent take on that debt.</p>
<p>I would be hesitant to see our student marry someone with that kid of debt…</p>
<p>Imagine having a huge debt load from undergrad, grad etc and yet the career is in a modest paying field–how on earth would the student/couple pay for it…?</p>
<p>It is hard to figure out what a REAL financial saftey will be when we don’t know where a student will get in–and what aid packages will really look like.</p>
<p>A REAL financial safety is a school where you’re certain to get in (by stats) and you can afford without guessing what you’ll get for FA (such as a local public). </p>
<p>A school is NOT a financial safety if acceptance isn’t “in the bag” (so to speak) and is only affordable if the school kicks in with their own questionable aid.</p>
<p>For instance…my kids are attending their financial safety…we knew that they’d be accepted, and we knew what merit scholarships they would be given. We knew we could pay for the part that scholarships didn’t cover. No guessing involved. :)</p>
<p>*I would be hesitant to see our student marry someone with that kid of debt…</p>
<p>Imagine having a huge debt load from undergrad, grad etc and yet the career is in a modest paying field–how on earth would the student/couple pay for it…?*</p>
<p>I agree…huge debt and modest paying jobs do not make for a happy marriage.</p>
<p>Well
given the cost of our state flagship (and how the honors college/state fund for the high GPA kids is greatly reduced)
and how some kids can’t get the classes they need to finish and do a 5th yr…)
and we’re self emplyed…
we have no finanical safeties…</p>
<p>don’t even get me started on the success of TARP (rolling eyes)</p>
<p>^^^^</p>
<p>Then your financial safety (unfortunately) is the local community college or a regional public 4 year where your child can commute to.</p>
<p>Flagships are often not financial safeties…many can’t afford to pay their COAs.</p>