<p>Aren’t student loans non-dischargeable in bankruptcy? If I’m understanding it right, it’s pretty much free money to them, right? They can use this person as a revenue stream forever, especially if most of her payments go to accumulated interest.</p>
<p>Banks know what they’re doing. As speihei said, if banks were really at risk of losing money from these loans, they wouldn’t make so many of them to so many people. </p>
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<p>He might have some sort of religious objection towards the use of birth control. Who knows? Probably not some random stranger on the Internet, right? :D</p>
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<p>What do you specifically recommend?</p>
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<p>Except when they’re nagging the federal government for help, apparently. That is to say, help that they would never consider extending to ordinary citizens who make foolish decisions with far small amounts of money.</p>
<p>If she’s pulling in $2300/month with $750/month rent, she should be able to make her monthly payments even on a photographer’s salary. From the bank’s perspective, she still managed to get a job sufficient to meet her debt obligations, although the job has nothing to do with the degree.</p>
This is the part that confused me. It said that the monthly loan payment was $700, then goes on to say that with that and rent (a combined $1450), there isn’t much left to live on. I wouldn’t be surprised if this is another of those “lifestyle” cases. She spends her money on night school so she can avoid the loan payments and takes advantage of the amenities in San Francisco. Further, I don’t understand why she needs to live in a city with a very high cost of living to be a photographer’s assistant. 26 years old and she’s making the same poor financial choices that led to her current situation.</p>
<p>This has always bothered me. People need to choose a school (and tuition) commensurate with their expected career income. You cannot go into $100K debt for a degree in religious and women’s studies. How much are you going to earn with that degree? If religious and women’s studies were her passion, that’s fine. But she has to understand the career and income prospects. In fact, it appears she really had no idea what kind of career she wanted. She’s working as a photographer’s assistant. </p>
<p>*
100K in debt for ANYthing other than a doctor or lawyer (maybe) is INSANE.*</p>
<p>It’s not even a good idea for a future doctor or lawyer to have that kind of debt for undergrad because when you add the debt for med/law school on top, the debt is completely unmanageable even for someone who’s making decent money. And, most doctors and lawyers are not making high incomes within the first few years.</p>
<p>Actually, this may be a brilliant long term solution She would have to spend the rest of her life getting more and more educated continually deferring the payments. </p>
<p>Gardna-
Most of us have a religious objection against potentially getting indirectly stuck with someone elses debt. And Maybe your pharma example is a case of Darwinism-- stupidity shouldn’t reproduce ;)</p>
Whether by weening colleges and universities off federal student loans and grants or by metaphorically ripping off the band-aid, reduce the federal aid for tuition payment. And encourage state governments to similarly reduce student aid. Remember that my position is that excessive resources are the primary reason for spiraling costs. If you disagree with that assertion, then my solution is illogical.</p>
<p>This will be painful, and it will cause enrollments to decrease in the short term. But it will force reductions in costs because people won’t be able to pay the outrageously high prices for college educations.</p>
<p>The other suggestion I have is, if you can’t get the government out of the education financing business, at least get them out of the business of funding the tuition for institutions that produce loan defaulters. That’s just wasting money.</p>
<p>Big, big mistake on the part of mom and daughter. But as to how the daughter can dig herself out - she can find a second job. As someone pointed out above, she can already cover rent and the loan repayment on her current salary. The second job will let her build a small savings account (and have the practical effect of keeping her from spending whatever is left over after paying bills on entertainment). Waitressing/bartending can pay well; nannying, temping, and retail work are less lucrative, but the jobs are out there. I hope she’s been looking.</p>
<p>Nothing is ever going to fix the poor decision she made 10 years ago. But she can pay off that loan.</p>
<p>I totally agree with comments here, particularly those from speihel. This is ALL the student’s fault. No one made her take on loans she couldn’t afford. The fact that she went with her emotions about colleges rather than her logic shouldn’t mean we have to help her out. This is probably the exact same article, but the actual paper’s headline reads, “Placing the Blame as Students are Buried in Debt”. </p>
<p>It’s an absolute mistake to blame the banks or the schools! </p>
<p>Look at this:
The student supplied the financial information, so why is the author claiming the schools have an obligation to explain things? Yes, the FA offices could (and should) explain the process, but shouldn’t the person taking out the loan understand what she’s signing? This is exactly what happened in the housing market! People know their obligations, but they choose not to uphold their end of the bargain when it was clear the actual value declined compared to their expectations.</p>
<p>When do people actually grow up and take responsibility?</p>
<p>Now, she even wants to give back her education! Geez.
There’s a couple of houses she missed buying in CA and FL in the 2008s that taxpayers are bailing out too.</p>
<p>I’m a bit confused as to why she couldn’t make the loan payments on her salarly–$700 for loans and $750 for rent plus maybe $350 a month for utilities (probably a bit on the high side) and $300 a month for food still leaves her with a bit of takehome income left for car issues, insurance, etc. Granted, it wouldn’t be glamarous lifestyle, but she could do it, especially if she managed to get a second job of some kind.</p>
<p>I don’t see how the payments of her loans ( a mix of Stafford, Sallie Mae and private) can only be $700. I think that is either a mistake or the girl gave them bad info (maybe she really doesn’t know herself since the loans are deferred.)</p>
<p>I’m guessing that the average loan rate must be about 8.8%…and her debt amount is GROWING every month by a a few hundred dollars or more.</p>
<p>^^^
I don’t understand why you put 10 years for the loan term. Is that standard? I thought you could really stretch these things out if you wanted.</p>
<p>*She started college at age 17 and borrowed as much money as she could under the federal loan program. To make up the difference between her grants and work study money and the total cost of attending, her mother co-signed two private loans with Sallie Mae totaling about $20,000.</p>
<p>When they applied for a third loan, however, Sallie Mae rejected the application, citing Cathryn’s credit history. She had returned to college herself to finish her bachelor’s degree and was also borrowing money. N.Y.U. suggested a federal Plus loan for parents, but that would have required immediate payments, something the mother couldn’t afford. So before Cortney’s junior year, N.Y.U. recommended that she apply for a private student loan on her own with Citibank.</p>
<p>Over the course of the next two years, starting when she was still a teenager, she borrowed about $40,000 from Citibank without thinking much about how she would pay it back. **How could her mother have let her run up that debt, and why didn’t she try to make her daughter transfer to, say, the best school in the much cheaper state university system in New York? “All I could see was college, and a good college and how proud I was of her,” Cathryn said. “All we needed to do was get this education and get the good job. **This is the thing that eats away at me, the na</p>
<p>This just sounds so sad. A girl in upstate NY could so easily have gone to Geneseo or Binghamton, gotten as good an education, and would be debt free today.</p>
<p>FWIW I’ll blame the mom too, but I have to say I just feel really bad for her. Yeah, she should learn a bit more about the real world one of these days, that would be nice, and I have a feeling I’ll be bailing her out soon, or maybe I already am through my taxes.</p>
<p>A rediculous amount of debt for a degree that is useless. Where were her parents and how did they allow such a thing? I would really resent my tax dollars going to bail out someone who obviously thought this degree from NYU was worth it. </p>
<p>These kids should live at home, work two jobs, and be forced to pay down this debt. I do not have any sympathy for this type of stupidity. One of my sons works full time while attending Cornell to reduce his debt. We did not ask him to do this but he was responsible enough to understand his obligations.</p>
<p>Whoever said the ones who live responsibly are rewarded and others are made to pay for their mistakes. </p>
<p>All you need is a politician who introduces a program to provide relief and you have just made three big friends - the other million students such as her, all the NYUs across the country who can now up the tuition to get their graduates $150K in the red, and the Citis across the country who don’t have to restructure or write off some of their loans.</p>
<p>All in all, a distasteful choice - do you use taxpayer money to bail out these $100K womens and religious studies majors who were blessed with an NYU college experience, or do you present the IMF with hundreds of billions of taxpayer money so that the Greeks, the Portuguese, the Spaniards, etc. can retire years before you or I can, and their governments don’t have the moolah to fund their retirements and benefits?</p>
<p>How is that a “choice”? Who exactly is in this position to simultaneously ameliorate the alleged debt crisis in America and the debt crises in Greece, Portugal, and Spain? </p>
<p>I wonder how many students are actually in the same situation as this person? I know we hear a lot of hyperventilating over NYU, but honestly this website is the first time I’ve ever heard of the school. Most Americans do not graduate from college, and I suspect (though I have no evidence) that most people go to state schools and not to places like NYU. The media can churn out dozens of similar horror stories about NYU each year around this time; I wonder why they don’t do this in September, October, and November, when it might actually be able to help someone?</p>
She would have to spend the rest of her life getting more and more educated continually deferring the payments. </p>