The $555,000 student loan time bomb

Parents Forum
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<p>The</a> $555,000 Student-Loan Burden - WSJ.com</p>

<p>"When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.</p>

<p>It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.</p>

<p>"Maybe half of it was my fault because I didn't look at the fine print," Dr. Bisutti says. "But this is just outrageous now." </p>

<p>"But as tuitions rise, many people are borrowing heavily to pay their bills. Some no doubt view it as "good debt," because an education can lead to a higher salary. But in practice, student loans are one of the most toxic debts, requiring extreme consumer caution and, as Dr. Bisutti learned, responsibility.</p>

<p>Unlike other kinds of debt, student loans can be particularly hard to wriggle out of. Homeowners who can't make their mortgage payments can hand over the keys to their house to their lender. Credit-card and even gambling debts can be discharged in bankruptcy. But ditching a student loan is virtually impossible, especially once a collection agency gets involved. Although lenders may trim payments, getting fees or principals waived seldom happens.</p>

<p>Yet many former students are trying. There is an estimated $730 billion in outstanding federal and private student-loan debt, says Mark Kantrowitz of FinAid.org, a Web site that tracks financial-aid issues—and only 40% of that debt is actively being repaid. The rest is in default, or in deferment, which means that payments and interest are halted, or in "forbearance," which means payments are halted while interest accrues.</p>

<p>Although Dr. Bisutti's debt load is unusual, her experience having problems repaying isn't. Emmanuel Tellez's mother is a laid-off factory worker, and $120 from her $300 unemployment checks is garnished to pay the federal PLUS student loan she took out for her son."</p>

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<p>What an eye opener. This article should be required reading for everyone who is in love with a school they can’t afford.</p>

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<p>There is already a thread discussing this if you want to see it, here’s the link:</p>

<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/865352-555-000-student-loan-burden.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/865352-555-000-student-loan-burden.html&lt;/a&gt;&lt;/p&gt;

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<p>"What an eye opener. This article should be required reading for everyone who is in love with a school they can’t afford. "</p>

<p>So how does somebody pay for medical school? - even state schools are expensive. You’re not going to pay for it while in school and on 40 - 50k as a resident , it would seem quite difficult.</p>

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<p>At our state med & law schools, in-state tuition is relatively affordable & many of the students live at home to save expenses as well. It is a crazy world! Too many families are going into major debt for undergrad and even more beyond that. There is plenty of blame to go around, including lenders who are very free about extending credit and students who really don’t think about long-term implications of the tremendous debt they’re assuming.</p>

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<p>If we were to compare her balance sheet and income statements with the Fed’s, including SS, Medicare, Iraq/Af’tan, etc. I wonder how the ratios come out.</p>

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<p>

Many hospitals and other institutions take care of the loans in return for x years of service at their facility.</p>

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<p>S2 goes to a state u. that has a medical school. It’s located in a rural area of our state.
I believe that if any of the med. students commit to family/rural health care medicine in the area for X number of years after graduation, a significant amt. of debt is forgiven.</p>

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<p>At our state medical school, the estimated in state tuition, room and board is 53K a year which is way more that the same state school undergraduate cost. Medical school is much more expensive in general for virtually any school than their undergraduate programs.</p>