Student loan debt has and will continue to be a major problem for some students. Why are some students allowed to take on so much debt at such a young age? If these students are allowed to discharge their student loans then will students who did not attend ‘For Profit Schools’ be given the same consideration?
For profits may not be a problem for long. The biggest, University of Phoenix, has lost half its students. The feds are tightening regulations regarding federal FA awarded through for-profits. This won’t help these students – but it may stem the tide of absurd college debt among students in the years to come.
I’m confused. The maximum Direct Loan for an undergrad is about $35,000 for an independent student, and $27,000 for a dependent one.
Are these considered major loan problems?
Begs the question how these students racked up $80 - $100,000 in loans – without a degree, to boot.
Oh, the irony! She will face quite a number of calls from people who also work in collections. Albeit, one can find some sympathy for the people who were duped into assuming so much debt, it should also be made clear that for many youngsters attending school with a combination of loans and federal grants is a proxy to get a low paying job. Simply stated, many of those “students” lived from the funds that were seen as a windfall.
@thumper1 I wondered the same thing. Who is allowing these students to borrow so much money?
If these students are allowed to have their loans discharged because they did not get a degree or have a degree but cannot find a job, then the Pandora Box will be opened.
There are students who have degrees and are not able to find jobs or have low paying jobs and may not be able to pay their student loans. Shouldn’t they be able to have their loans discharged?
IMO, private loans should be dischargeable. (That way they will disappear since no lender would accept that risk.)
Federal loans should not be dischargeable since the tax payer should not have to bail out the borrower.
Some of those loans were taken out when some fools were allowing ug students to take them out without a cosigner. Some of them have parent or other cosigner who might be getting a credit report down grade when the loans are not getting repaid, or they will get some notification.
If these are federally funded loans, the student can do income based repayment…payments are based on the earnings of the borrower. If that person ends up in a very low paying job…their payments are low. After 20 years…I believe, any balance is forgiven…BUT there is a tax implication…taxes are paid on the amount forgiven.
No free rides.
I plan on taking out some loans throughout college and find it ridiculous that they want a pardon for their already purchased education. They were responsible for finding a reputable college and doing research, it’s entirely on them if they can’t find employers who take their degree seriously.
Borrow 110k to be just a paralegal? I have a hard time justifying 110k debt to be a lawyer.
“She said she left school with about $80,000 in federal loans and $30,000 in private loans”
I thought the limit for undergraduate federal loans was around 24K (4500 + 5500 + 6500 + 7500)?
MADad…its $5500, $6500, $7500, $7500 now for Direct Loans… But the student could,also have gotten a couple thousand a year in Perkins loans. And if the student was independent for financial aid purposes OR if the parents were denied a Parent Plus, the student could have taken an additional $4000 a year in Direct Loans.
But that all still doesn’t add up to $80,000.
thumper1, thanks for the correction…I was on the right track! But totally agree, how do federal loans get up to 80K?
I’m hoping it’s a transposition error, and the 30K is federal and 80K is private; you could get up to 30K in the way that thumper1 describes, or if you don’t make any payments for a long time and allow the interest to be added to the principal over the course of a few years. The only federal loan that I can see getting that high are the loans that graduate and professional students can take out (Plus loan).
In general, people are very eager to insist that students who need jobs should seek out practical disciplines and trades – medical billing and coding, HVAC repair, paralegal work, etc, which are usually contrasted with “useless” liberal arts or humanities education. To a large extent, that’s not necessarily bad advice; if you can really carve out a career doing that you can support yourself and your family.
The other side of that coin is that those degrees aren’t magic bullets either. If you go to what basically amounts to a fake school, you’re still going to be as unemployable and you’re likely to have the same amount of debt anyway.
Some of the unscrupulous for-profit colleges are vacuuming up students who are eager to learn something practical and trying to better their circumstances by developing marketable job skills. Personally, I think that we should shut off the spigot of aid to “Scam U” and instead use that money towards creating genuine reputable programs in the trades at community colleges instead.