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<p>These are actually the worst possible loans you can get. They are non-dischargeable in Bankruptcy (absent very, very few exceptions), thus are never written off, and they up till now have been given with abandon by companies without any regard to the ability of the student to actually pay the loan back. They have not worried because these loans are guaranteed by the Feds, and Sallie Mae will hound people to their deaths and beyond to get their pound of sand. If they are defaulted on, the government may seize tax refunds, disability payments, even up to 15% of future social security payments. There is some relief, income based repayment programs (at least for government loans not private loans), but if there is a default, the penalties, and interest can quickly double the amount due. Interest rates are also very high. </p>
<p>On the other hand, my business credit loan and credit card debt is unsecured, the rates are much lower, and can be written off in bankruptcy or at least reorganized to a great extent.</p>
<p>Student loans, being so available, have fueled the huge increase in college tuition, especially at the private level where many schools now charge 50K in Tuition alone. Its about time this bubble burst.</p>
<p>And no, people from other countries are not going to invest enough money in the US to keep our economy humming along if the younger generations do not have the money to spend on consumer goods, durable goods and houses. We will be worse off than Japan has been for the last twenty years.</p>
<p>All student loans have allowed people to do is rack up huge amounts of non-dischargeable debts that will never be paid back for oftentimes degrees that will never come close to paying off from a financial point of view.</p>
<p>I suggest you do an internet search to see how devastating these loans to people, who can barely afford to pay for them and put food on their table, let alone afford to pay for consumer goods. And these loans have been assumed by children who have only just learned how to do their own laundry. You really think they understand the consequences of assuming this type of debt?</p>