<p>Me too.</p>
<p>Everyone blames the students for being irresponsible - but they’re only allowed to be irresponsible because the banks can’t get burned by a default.</p>
<p>The banks are supposedly full of all the brilliant HYPSM graduates - why are we allowing them to take advantage of high school seniors?</p>
<p>I think that even if the rules were to change, they may only change for future student loans. It really wouldn’t be right to allow past loans to be dischargeable since they were taken out with minimal req’ts under the rules that they couldn’t be discharged.</p>
<p>I think that banks were pressured to give these large student loans by congress as a way to help low-income students afford college. I think that was one of the reasons Sallie Mae ended up in such a mess…and now requires co-signers.</p>
<p>I’m not blaming the students. But the parents should really know better.</p>
<p>There is no other area of financial choice where emotions run so high and sometimes the people who should be there for families to help keep them on solid ground are so enamored with the prestige factor themselves they cannot truly be of help. If these loans were treated like other borrowing (dischargeable through bankruptcy) the banks would be much more careful about the offers they make - they can’t reposess juniors degree in ethnomusicology.</p>
<p>As it stands it’s really a comedy of errors; the parents and students apply hoping to get into the school of juniors dreams, the school sends out a package demonstrating how you could pay for year 1 of education - not that you should pay for it that way, only that you could because they can’t know the details of every families planning or whether grandma plans to pay the whole thing off later etc., and an entire generation is already in debt so when the family looks to see what others have done they may actually be told that “that’s what everybody does” because their source of information is a young person in the admissions/counseling/college advising industry who is also struggleing to pay off an oversized loan, and the banks are happy to loan the money because their risk is lower in making this very high risk loan than in any other investment they could make. </p>
<p>I don’t think the direct loan program from the government should be protected by bankruptcy, but private loans above and beyond that yes - that would make the banks more responsible.</p>
<p>Of course the best answer is always educating the consumer - but that is sometimes easier said than done. Just as the CC or state U. may not be good choices for a particular student, I have also known kids to go out of state and pay higher costs for an inferior program because they automatically assumed that everything in their back yard was sub-par. </p>
<p>The regulars on cc are not the best measure of public knowledge - they are over represented by the kind of parents who have spent a lot of time educating themselves about everything connected to their kids education - the majority of parents expect to not be lead astray by the education/educational finance system and are much more likely to take whatever offer lands in their lap at face value as a reasonable option.</p>
<p>I have heard two med students talking the other day (children of docs) about how they have 100K in loans to date and will have 200K by the time they graduate from med school but no worries, they’ll just declare bankruptcy & everything will be just fine!</p>
<p>I agree that having these ed loans NOT discharged in bankruptcy is encouraging a lot of this slick advertising about how these brilliant young scholars deserve the very best education money can buy and it’s all within everyone’s reach via some magic loans! I have never understood the disconnect that people seem to have about loans and the need to pay them back and all that repayments entail. I guess I’ve always been extremely debt adverse and have raised our kids that way as well.</p>
<p>*But the parents should really know better. *</p>
<p>What I’ve noticed is that often the parents of these kids with big loans are often “over-extended” themselves and they encourage/enable these big loans to deflect away their own inability to pay for their kids’ college costs.</p>
<p>The parents are bad with money and they aren’t able to advise their kids properly.</p>
<p>Thankfully, with the bank problems a couple of years ago, banks have changed much of their lending practices for student loans. There was a time when Sallie Mae would enable a student to borrow the full COA of a private without any co-signers. So, now we’re hearing about grads with $200k loans. I think many of the horrow stories we’ve heard about really entail that kind of lending. I really don’t think as many of these loans will even occur since they now require parents to co-sign. </p>
<p>And, remember, since these loans now require co-signers, the co-signers would have to declare bankruptcy as well…and many parents aren’t going to go along with that.</p>
<p>
</p>
<p>Citibank will still allow students to take out loans without a cosigner. From their web site: "<br>
<p>So, no, unfortunately the banks have not all reformed – they are continuing to make these crazy loans. On Citi’s website it says a kid could take out up to $120K in private undergraduate loans.</p>
<p>^^^</p>
<p>Since those loans include loans for grad/law/med students, I really wonder how many 18 year olds would qualify to borrow large amounts without a co-signer if they actually applied. I can see if an 18 year old wanted to borrow - say $5k - then a cosigner might not be needed. But, I really wonder if Citibank would approve an 18 year old with little income applying to borrow $45k for frosh year.</p>
<p>*•The cumulative amount you can borrow **throughout your academic career **is up to $120,000; this includes all other types of student loans.
*</p>
<p>My primary experience with loans other than the Direct Loans is with the New Jersey HESAA. They will only allow the student to forgo a cosigner if he makes more than the federal poverty level (about $22 grand I think) for a family of 4. One year he did, so that year the extra loans do not have me as cosigner. The rest, however, do have me on the hook as well. </p>
<p>We did look at Sally Mae, and since they wouldn’t reveal the interest rate prior to applying (and they did want a cosigner), we chose not to go that route.</p>
<p>There’s no way that a recent college grad (okay there are a few exceptions) are ready or willing to pay $1K a month for their student loans.</p>
<p>Have they ever filled the tank with gas? Pay their own insurance? Do they think spending $15 on lunch is a normal occurance (but they don’t pay for gas). did they think a $50 video game purchase was a normal occurance? $95 sneakers? Do they buy pitch in & groceries, or a gallon of milk for their parents home?</p>
<p>Good luck with them re-paying their loans…</p>
<p>Yes, I agree that having loans NOT dischargeable in bankcruptcy encourages slick, predatory practices by banks preying on HS seniors and their sometimes naive families. Families who are looking to the HS and bank and U to look out for their and their student’s best interests, w/o realizing that there are severe conflicts of interests.</p>
<p>The HS has an interest in sending its students to the most prestigious Us, w/o particular regard for cost. The bank has an interest in getting great loans that won’t be discharged in bankruptcy. The U is looking to fill its classes and doesn’t particularly care how it gets the money it needs to keep running. </p>
<p>The parents and family want the kid to be happy and believe all the good things they hear about college (& grad school) making the kid have a better future, etc. w/o any cautionary info about interest and loan repayments, etc. and no reality check or debt counseling. Some of these parents (& definitely most of the kids) have never had any debt and really don’t understand it–it looks like free money to them.</p>
<p>Being an adult & parent doesn’t automatically give a person any “money sense” or understanding about debt and what it takes to pay it off (note the flourishing payday loan operations that have exhorbitant interest rates and are everywhere).</p>
<p>^^^^^^^^
Like!</p>