<p>I (and my family) didn’t have money when I went to college. We also didn’t believe in huge debt that wasn’t necessary for essentials (ie roof over our head, food, clothing). I could have been accepted to many private and expensive colleges. Heck, I could have been accepted to our flagship uni and lived on campus. I didn’t do any of those things because we couldn’t afford it. I went to community college for two years while living at home and working. I finished my last two years at the flagship living at home and working. Was it the best four years of my life–no. I didn’t get the “college” experience but I got a degree that allowed me to get a good job and I wasn’t in debt when I finished.</p>
<p>When did everyone decide debt was such a wonderful thing and so easily dismissed if you can’t pay it back. It’s a hard lesson learned.</p>
<p>I know some folks in this situation, and they have let it go to the point that they cannot even pay the interest on the loan. Something needs to be done to take the situation in hand for those in such straits. Yes, it is their fault, but when this starts happening on such a wide spread basis, the damage that is being done is more than what can be gained by sticking to the party line. That is why we got rid of debtor’s prisons and have regulations regarding collections. It can get to the point where society is harmed more than helped. Don’t know where it is at this time, but it can get there.</p>
<p>So what should be done when a student owes $100K and can’t find a job for more than 30 hours a week at minimum wage? If you are a case officer involved in coming up with some plan for repayment of such a loan, and forbearance has already been made for periods of time that have resulted in the amount owed and it’s now pay up time, what to do to resolve this situation? Be aware this is one student times who knows how many more. What ideas do people have here? I can tell you I am stumped, other than to come up with some required government service such as military with half the pay going to the loan until paid.</p>
<p>I think anyone in the situation where they have run out of forbearance needs to be counseled and given direction for alternatives to pay. Yes, they owe the money. Yes, they made stupid choices, most likely. But you can’t beat a dead horse to death, nor can you squeeze water from a stone. If there isn’t the money or the earnings there, you aren’t going to get them. What to do? Wait till the student qualifies for other federal aid and take the money from that? There are no tax refunds and there isn’t going to be Social Security from someone who can’t find work. That this kind of debt is on the credit report may be keeping some of these young people from getting certain jobs. Can’t be working at a bank, or other such financial services jobs without a credit score of a certain number. And defaulting on a student loan is an issue. So the very problem of owing the money is often preventing the person from finding a job to pay it. The cat is chasing its tail. So I agree, something needs to be done, but I think it is safe to say, that some of these people who owe these large amounts have no options or money to offer. They have no solutions. Something has to be taken into hand.</p>
<p>Just because he cant discharge the debt doesn’t mean he’s going to pay his loans. Most people aren’t going to sit there are make +1k payments a month for 10 years and say “I made my bed, so i’m going to lie in it.” What’s likely going to happen is that he’s going to default on his student loans. </p>
<p>I find it puzzling that many on here think his debt shouldn’t be dischargeable, but have no problem accepting the obscenely high tuition that gave this kid such a high amount of debt.</p>
<p>When the student loans bubble pops, we might see the absence of all, or many, loans for higher education. Perhaps we’ll see states trying to pump money into their public education systems.</p>
<p>We are going to have a large segment of the population that are slaves to these student loans. Many people who receive these loans do not understand the difficulty of paying these loans back.</p>
<p>The schools should know how hard it is to pay these loans back. The lenders should know. If student loans were allowed to be discharged, lenders would have to think twice about giving these loans out. There would be fewer loans if lenders were also on the hook. Right now, it is a free ride, but not for students or their families. It is a free ride for lenders.</p>
<p>“I can tell you I am stumped, other than to come up with some required government service such as military with half the pay going to the loan until paid.” </p>
<p>Americorps members can receive a stipend to help repay student loans in the amount equal to a full Pell Grant for each year of full service. It looks to me like it can be earned for a maximum of up to four years (so, using current numbers, $22,100). </p>
<p>I think The College Cost Reduction Act is a little less helpful. It provides forgiveness for outstanding student debt for people working in government-defined public service after a student has made 120 payments-- but federal student loans are usually scheduled to be paid in 120 payments. So I would think it would only be helpful to people who used income based repayment to stretch out their payments because their income was low. </p>
<p>dstark,
I know you know this, but the reason why student loans are non-dischargeable is because when they used to be dischargeable, the default rate was so high that the government/taxpayer got screwed and lenders wouldn’t lend, so fewer students could afford to go to college. Is your solution to go back to this model?</p>
<p>No one forced this kid to go to Goucher. He unwisely chose to attend an expensive private college and take on $25,000 a year of debt. It’s a bit like boo-hooing because one bought a Lexus and now can’t make the car payments.</p>
<p>If these are federally funded Stafford or Perkins loans, they are eligible for income based repayment or forbearance. If the person is unemployed or underemployed, the loan repayment is based on a %age of their income…or none. </p>
<p>But with $100,000 in loans, it is a safe bet that more than half of these loans were consigned either private or Parent Plus loans. These are not given the same repayment options…and the COSIGNERS are all on the hook for repayment.</p>
<p>I also believe it is necessary to offer refinancing of Federal Stafford and Perkins loans down to the level of currently issued stafford loans (which I believe is 3.6%)</p>
<p>my son’s loans are between 4.25-5.25%. We’ve paid the 6.8% and 5.35% interest one in full already</p>
<p>I also think the government should raise the income limit before they start to limit the student interest deduction (which itself is limited to $2500 a year). I was beyond surprised when I realized my son was not able to take his $1000 deduction because his AGI was too high (~70K). I mean, give him a break. He paid just over 20K in taxes this year (after you subtract his Fed & state refund of 3K), NY city and state are really high. So high, that his itemized deductions were > standard deduction for single person with no mortgage.</p>
<p>Bay, I don’t like the solution, but it is better than loaning students 100,000.
Students should be going to cheaper alternatives and the cheaper alternatives should be heavily subsidized by the government. Education is both a private and a social good.</p>
<p>What we do now is ridiculous. The intent to get more kids into school that could not afford it without loans was a good one. But look where we are going…</p>
<p>Cutting the interest rates to zero as you suggested is not a bad idea.</p>
<p>When businesses can’t sell their products at prices that are affordable to their customers, the businesses go out of business. </p>
<p>I have nothing against schools against Goucher, but if these schools are surviving because students are taking out humongous loans, they shouldn’t be surviving. The article mentions one student. How many students are in similar situations? I would like more facts. With a trillion dollars of loans out there, I wonder. Hopefully Goucher doesn’t need the students to take out large loans to survive.</p>
<p>"Just because he cant discharge the debt doesn’t mean he’s going to pay his loans. Most people aren’t going to sit there are make +1k payments a month for 10 years and say “I made my bed, so i’m going to lie in it.” What’s likely going to happen is that he’s going to default on his student loans. </p>
<p>I find it puzzling that many on here think his debt shouldn’t be dischargeable, but have no problem accepting the obscenely high tuition that gave this kid such a high amount of debt."</p>
<p>Beyphy, he attended a private school by choice. He didn’t have to attend Goucher; he could have attended a cheaper school.</p>
<p>I guess I’m not ‘most people.’ No, I didn’t take out $100,000 but I did take out $40-$50K back in the 90s. I was a single parent who got through a state school thanks to grants, scholarships and, yes, federal loans. (I had higher loan limits because I was independent.) I chose to go back to college when I realized that I couldn’t pay daycare and support my kids on what I could earn. Instead of taking public assistance or food stamps, I took out loans for us to live on and went to college. I earned my degree, got a job in my field and paid the loans off-- and I am thankful for that opportunity. I am sure there are many people like me.</p>
<p>The only reason people get themselves into this situation is because they can. In the real world if you want to borrow money the lender will require a certain guarantee the loan will be paid. With college loans of this magnitude that guarantee simply is not there. I think the worst culprits are Parent Plus Loans and private loans. The student will assure Mom and Dad that he will in fact graduate and go onto to an illustrative career but ends up with a Poli Sci degree and $100k in debt and little if no career prospects. Parents if you co sign anything act as if the debt is yours and yours alone. You had better be able to pay back every cent you borrowed and not expect your future lobbyist, wall street banker etc to do it for you. If they can great, just don’t expect it. If you don’t want to pay it back don’t borrow it and let junior go to junior college, state school etc… In my opinion he will learn just as much and appreciate what he/she does accomplish far more than being pandered at what can amount to a four year country club.</p>
<p>“I have nothing against schools against Goucher, but if these schools are surviving because students are taking out humongous loans, they shouldn’t be surviving.”</p>
<p>I heard an occupier talk to a conservative talkshow host on radio an year ago. She claimed one of the demands of occupiers was for all student loans to be absolved. She went to Brown, had 100k+ in debt and was an occupier leader not looking for a job.</p>
<p>I find it interesting that the federal government is borrowing money and lending it to banks at a lower rate than they are willing to lend it to a student. </p>
<p>i just ran a loan calculator at 0% interest for 100K, 10 years, and the payment is $833
that’s too much for ANYONE</p>