So, I have an honest question for you all - I'm aware it's not the most popular question, so hopefully someone can change my mind.
I graduated from graduate school in 2010 with $62,000 in student loan debt, an outrageous number that greatly exceeded my annual salary. I'm working now, making minimum payments on that loan with hopes that someday, I'll be able to afford to pay more and get it taken care of quicker. That's hard to do when you're planning a wedding and looking to buy yourself and your future wife a home in a big city.
That said, I couldn't disagree more strongly with the protests and the purpose of it all. I know student loan debt sucks, because I have some. I know there are sacrifices that have to be made to make those payments, because I have made those sacrifices. I know the impact it can have on your future, because I am seeing it impact my future every day.
When will anyone come out and say, "THIS WAS YOUR CHOICE." No one made you take out that debt. No one forced you to take out a six-figure loan to get a degree that would never give you a job that would help you pay off that loan in the future. I've got two degrees in business and I'm still making minimum payments, but I knew that going in; I would never stand outside and tell everyone that I deserve to have my loan forgiven, because in reality, I don't. I knew I had to make those payments when I signed the agreement to take out that loan.
That's my question for anyone who happens to read this (and please note, I am NOT trying to be inflammatory, or start a fight with anyone, or anything.. I'm just trying to get some different perspectives) - why did you get into all that debt trouble if you had no intention of paying it off, and why should the government bail you out? We all protest the government bailouts of the big banks, but what makes your voluntary student loan any different?
Here's hoping for some educated discussion.
I am 53 years old with 120,000 in student debt and unemployed. I lost my job in 2009 and have not been able to find another position. I am blacklisted from finding employment because the healthcare provider was committing fraud that I reported to the government getting myself fired. No one will hire me and I'm having to declare bankruptcy. I've lost my housing and had to resort to getting food stamps.
I don't think any of us got into a student loan situation with the intent of not paying it. What did happen to many of us, especially many who have had student loans for a decade or two, is that we've been plagued by unfair practices. My loans started out at around $20k, a perfectly reasonable amount to expect to pay off. Through a series of misfortunes (3 deaths in immediate family, caring for elderly parents, etc.), mine are in default. They are now in the neighborhood of $80k due to unregulated interest. They have no interest in really working with me (and many others, I'm sure); they only want to intimidate, threaten and demoralize. I've been threatened and lied to to the point where I don't even deal with them anymore. What's the point? They have threatened to garnish my entire SS when I get to that age; they threatened to take almost my entire paycheck, literally leaving me with almost nothing to live on (around $200). They seem to thrive on making a person feel as if there's no hope and no way out.
So, to answer your question, we aren't looking for a way out of paying. We are, however, looking for fair treatment, and treatment of this debt to be like any other debt. There are going to be circumstances where bankruptcy might be the only option for a few people; I have read that's under 1% and that sounds reasonable. Ironically, a person could go and charge their entire student loan debt to a credit card, and then turn around and file bankruptcy on that credit card debt; yet, bankruptcy isn't an option for student loan debt, directly. So, what we're looking for is just fair treatment...stop the unregulated interest, and put into place the protections for consumers that all other forms of debt enjoy. And stop the lies, threats and intimidation practiced against us, another protection other forms of debt enjoy, but we don't.
@ Ampersande: I think most of us HAD good intentions of paying off our debt. What we didn't expect however, was taking out loans to find NO jobs in our field (I myself am an Accounting major), or jobs that pay way less than we were promised by the school we attended. For example...in my Accounting Degree I was PROMISED that if I just completed my degree, did an internship that I would have no problem finding work and that my salary would range between $54,000-$60,000 and I would make more if I had the CPA Certification and because I was so young I believed my "guidance" counselors. That aside....I have been unemployed for over a year now and the last accounting job I had barely paid $35,000 a year. That is way low for the skills that Accounting actually requires and the degree of accuracy that is needed. On top of that my husband lost his high tech position to outsourcing and because he is over 50 no one wanted to hire him for a very long time. So because of that I had to defer my loans to pay for our living expenses, my loans went from a balance of $78K to over $104K in a little over three years. YES --- getting educated was MY choice. But.....I honestly had NO idea HOW much I was being charged, how many loans were being taken out....my financial advisor told me that my balance should end up around $60,000 and I know that $18,000 was taken out AFTER my graduation date, but because I was naive and didn't know any better, I didn't catch this until 5 years after I graduated. Sure you sign a promissory note taking responsibility for your student loans, but until recently, the amount you were actually being charged was never disclosed to many of us. Furthermore since the loans are backed by the Federal Government, this technically means that student loans are ALREADY being paid for by taxpayer dollars---student loans are simply something that are on a piece of paper and a game between the government AND the banks. Based on this fact, this means we shouldn't have any personal student loan debt. Now I live in a place I hate (Omaha, NE) where unemployment was supposedly low and haven't been able to find a job for over a year! What am I supposed to do? If I had been able to secure employment at the wages mentioned, even when my husband lost his job, I would have been able to afford my student loans. It is not up to my husband to pay for my life or my choices. If I could find a decent accounting job at the wage promised without my CPA, I would happily start making my payments in full again to get out from under this humungous burden even though I know it is simply a scam. Hopefully in 8 years my husband will be eligible for full social security and we can just leave the country, thankfully he never signed for my loans so they can't touch him! It isn't right to be thinking this way.....but unless a miracle job turns up for me....we will have no choice!!
For the last time, your loans are not prepaid. The government acts as the guarantor of your loan. When you default they come in and pay for your behalf then you pay the government back. You still borrowed the money. There is no 'gaming' involved. It was all spelled out in your promissory note -- it was there when I signed it. Ignorance is not an excuse of financial obligations.
And for the record, I'm don't get why everyone keep comparing this to bank bailout. It is obvious they are oblivious to what bailout are. Bailouts are just loans to get them through the hard time and keep them afloat. There is still the obligation to return the money, which is why some company didn't accept the bailouts because it comes with a lot of restriction of top of being obligated to return the money borrowed. If your loan is a federally backed loan and you've defaulted (meaning the federal government assumed the loan on your behalf), giving you a loan to pay back the loan you owe them don't make a lot of sense. Having it 'forgiven' is another story, which many people don't agree with, anyway (on this site yes, most other places, no -- see (http://scottystarnes.wordpress.com/2011/10/26/bad-news-for-the-occupy-wa...). Will this change? Maybe. But this movement has too many points against it to gain traction:
1) Too small of demographically targets.
2) Fairness. Self-explanatory. Past and future student who already paid the debt/didn't make the cutoff date are going to object. The panhandling won't stop. Its a slippery slope for the generations of entitlement to come.
3) Unrealistic. Asking for way too much money. What makes you think anyone is gonna agree for others to give you $1,000 to $1,000,000 in one shot is beyond me. Stimulate the economy? Anyone can use that kinda money to do stimulate the economy.
The movement should be advocating for realistically goals that has *some* chance of passing (capping of interest would be a start). Forgiving loans, honestly, good lucks with that. You'll just be writing sad stories to each other for years to come with no change.
Default? Who said anything about default? I have NEVER defaulted on a loan--at least not yet, but if I can't find work in my field (Accounting), then what I am supposed to do? I guess work three crappy minimum wage jobs where people treat you like sh*# and I never see my spouse? I disagree with you regarding our knowledge of the promissory note we signed at the beginning, many of us HAD NO idea what we were getting into--still don't think most students who take out loans are knowledgable enough. The universities suck people in with false advertising for jobs that do not exist and "financial aid" claims. When I signed my promissory note I was barely 18 and really did not understand what it meant-in spite of that I never said it was not my choice to get educated, because it absolutely was. I also did not understand how the courses I was taking were being charged. I had no one in my family who could explain it to me. My mother is a total idiot when it comes to finances and currently has over 100,000 in credit card debt and after 21 years of being divorced still blames my father for her financial mistakes. My father is a rich and wealthy politician and all he ever said was get educated, get educated, get educated.....never offered assistance or advice, told me that student loans were a "good debt" to have and that since I had no other financial means to pay for school, this was the way to go--that I would surely get a GREAT job after graduation which would allow me to pay my loans off in ten years (wow, ten years of debt payments....haha, try more like 30 if I am lucky, even at the full payment--because of interest). I have never owned a new car, purchased a home, gotten into the keeping up with the Jones', thankfully I have very little credit card debt(only due to a recent medical issue that insurance did not cover everything). However the fact that interest has increased my loans significantly makes it impossible to try and pay them down. If I could get the Accounting job I was promised,maybe I COULD do something about them. I have sacrificed everything (shopping at Kmart versus Macy's, eating Ramen vs. going out, staying home vs. taking any vacation, not having children or pets and no new cars, don't get my nails done, have never given into the have to have status thing) in my life to even keep them current.I have been paying (except the two years my husband was unemployed for and I had to defer) for 10 years now since I graduated, yet every position I have held has been either outsourced or cut from the company payroll (Accounting is supposed to be a great in demand field!). Still after paying for 8 total years the balance should be decreasing, not increasing, yet I am pretty sure in July when interest rates double, more interest will accumulate and pile up adding to the loan balance. So goodbye retirement, goodbye any type of home besides a ghetto apartment---whatever....as long as I make my student loan payments, the risk of being shot at random every day certainly livens things up. I know how student loans work now though,and I have a plan to get out of my debt, whether I can be successful at it is another story. All I can do is keep trying. Just like finding a job, all I can do is try.....
Who said you defaulted. My explanation is regarding your comment that the federal government prepaid.
While I do empathize with your situation, I do find it mind-boggling that you did not ask how much you currently owe before it balloon into an unmanageable amount. Promissory note aside, every semester I took a look at the tuition bill. It had a breakdown on how much of your loan was applied toward the total tuition cost, itemized very neatly. It wasn't hard to figure it out and I'm not even an accounting major.
While I do not support a forgiven of student loan, I do wish you luck getting out of your debt.
I understand what you are saying now, I've been told differently, but doesn't mean its accurate or truthful information......and no thankfully I've been smart enough NOT to default. Because I was so young and very naive when I initially got into student loan debt, I took for granted the response I got from guidance counselor's telling me that my loan balance wouldn't be so bad and that I would get that GREAT job. Little did I know....luckily I grew up and have figured it out now. Now I know exactly how it works and I know it won't be easy to get out of..but like I said, when you throw $750 a month at these loans for 8 years, seems the balances should have decreased not increased ...not sure how they are calculating that...since my degree is in accounting when I run my figures at 6.8% interest I get that my balance should be less than $50K, not $104K, I am working on getting someone to get me a straight answer on those calculations and will keep fighting until I have it in black & white---and I do remember when I asked about the tuition and books and all every semester the school refused to show the financials to me (should have known then, but again naivety and immaturity). And while I think forgiveness would be nice, would I ever count on it realistically --- NO!! Again, the education was my choice and because I didn't have anything to allow me special privileges or grants, I just have to work my way out of the debt....it will take time, but I am sure with the right attitude, I can get there. Some days it just gets very frustating, but I see your point and I don't want to be one of those looking for a handout, that is part of what has caused the big economic problem here in the US--too many handouts. Luckily I've been smart enough to stay out of most other debts and hope to keep it that way.
Unfortunately I would need to see how your payments are applied to see why you are paying that much interest. You definitely do have the right attitude and I hope you pay it off.
I do hope that something do change though, capping of interest rate is a realistic start. Spiral out of control interest made sense when the loans were dismissible but now that it isn't, a sensible interest rate should be enforced since the rate of risk involved isn't there to justify the interest anymore. Back then, student loans were able to be discharged in bankruptcy court so giving a kid coming out of college of no credit worthiness would make any lender skeptical to do so. Now it is a different ballgame in their favor and for that I think a change in the borrower's favor is needed since the rules changed.
The reason your balance is increasing is due to capitalized interest. Private loans and federal unsubsidized loans gain interest while you're in school. This means any unpaid interest is added to your balance and you end up paying interest on interest. That's how even small loans can grow astronomically over the years. Check your promissory note to find out how often interest is capitalized, mine are yearly.
I'd like to answer your question in a different way. Instead of an individual response, instead of telling you why I, or you, or this one or that one should have their loans forgiven, I want to suggest the enormous benefits we could earn as an aggregate of student loan forgiveness. Think of it: All the houses bought, all the cars bought, all the money going into savings rather than debt maintenance, all the small businesses started, all those businesses creating new jobs, all the people who can dive in to self-employment without (exaggerated) fear of failure. The economic stimulus that would result from the unshackling of millions of people from indentured servitude would pay for the cost of the forgiveness many times over. And we could, in the meantime, devise a better system than what we've got going right now.
You make good points and several of us did know that paying back debt would be part of the process. In terms of myself...I graduated with a Master Degree in Public Administration and went into a job that paid $30,000 a year. My debt was 80,000 total. I could not afford the large payment after consolidation so,through Sallie Mae, entered into the income based repayment plan. What the councilor did not tell me and what I didn't realize at the time is that the balance grows during the time of income based repayment. Within a few years I entered into the regular payment plan only to go onto the income based plan one more time, which was two years ago during a time of furloughs due to lack of funding at the government agency in which I work. Long story short..I now pay the $500.00 a month payment, work full time and make $58,000 a year and am eligible to retire in four years. Guess what the balance of my student loan is..$80,000. This is after 13 years of faithful payments and only 4 years having to rely on the income based plan. I have never gone into default and have never missed a payment. To add it all up...After faithfully making payments for several years I have paid 70,500 to an original $80,000 loan and still owe $80,000. And that's the part I didn't understand...but who would?
First off, I'm pretty sure anyone protesting this had every intention of paying off their loans. What they didn't expect was having to pay off 2, 3, 4, or 5 times the amount they borrowed.
I've heard the "THIS WAS YOUR CHOICE" argument before. No one made me sign for my loans for a degree where I would never make enough to pay off those loans. I was young, unaware, and wildly misled. First by my parents, then by my high school teachers and guidance counselor, then by recruiters, financial aid, and lenders. I honestly did not know what I was getting myself into when I signed my loans.
I was the youngest of three, a childhood brain tumor survivor, and the first in my family to graduate high school. My parents, teachers and guidance counselor all urged me to go to college and follow my dreams. Recruiters at the for-profit school I went to told me their job placement rate was 91%. They told me upon graduation, the average annual salary for my field was $40k-56k.
I was led to believe that I would find a job making $40-56k, which made their estimated $54k tuition rate doable. I still do not understand how I came to take out about 20k more than that. I know I had to get additional funds for housing, books and supplies, and got about $18,000 worth of scholarships and grants, but did I really never receive any financial aid? I never knew whether I had private or federal loans. Up until my last 3 months of school, I never actually knew the full amount of what I was borrowing. I never knew that their job placement statistics were skewed to make the school look good. I know now that the school bent any type of work, even part-time retail positions, to be considered working in the field. Their $40k-56k was a lie too. Most graduates end up making less than $30k a year. It is a scam. How can anyone expect people to pay off $72k in loans with exorbitant interest rates making less than $30k a year? How is it right that lenders can do this in the first place? It is predatory. They are only out for a profit.
I graduated a little over two years ago and was unemployed for over a year afterwards. It is difficult for anyone to get a job these days, but when you're a brain tumor survivor (who looks like a kid because you haven't grown since you were 9, have thin hair and a giant bald spot, plus an asymmetrical/dented head), it makes it a lot harder to find work. I was under-qualified for jobs in my field but over-qualified for regular Joe Schmo jobs at the same time competing with millions of other unemployed people. It wasn't until I removed my degree from my resume that I was able to find a part-time position working in a library (not my field of study). I'm 26 and have yet to find full-time work. Do you really think I, or anyone else for that matter, would have taken on loans because they knew they'd be under/unemployed?
I've been paying on time for two years and less than $10 has been applied to the principal. The interest continues to grow. So long as I do not have any sort of tragedy in life, I will continue to pay, and will end up paying well over $100,000 in interest alone.
Had I known then what I know now, you better believe I never would have gone that route. I wanted to be successful, to live the "American Dream." I did not willing walk into a lifetime of debt. Do you honestly think anyone has?
@ampersande: I graduated in 1995 with $30K in loans - not out of line with first year expected salary... When my loans went into repayment, I called SLM and asked how to send extra payments to the principal... I was told, point-blank, "We don't have to apply ANY of it to the principal" and when I asked WHAT it was applied to, they told me "Interest, fees, and charges - and even if you send in extra, we will still apply it however we want"... I called 4 or 5 times, trying to find out WHERE and HOW to send extra payments in to be applied to the principal, and was told the same thing, every time. I finally understood that the INTENT of the loans was NOT to have them paid off but to keep the borrower in hock as long as possible. One of my grandfathers was a coal-miner, and I UNDERSTOOD the 'company store' model...
As it turned out, our child has cystic fibrosis, and I never did wind up actually working in my field. As I looked back over my 13 years of payments and deferments, etc, less than 6% of my payments actually went to the principal, while the interest was capitalized and compounded, so now I owe over $52K... We have, in fact, paid off one starter house (shack), 4 or 5 hospitals, at least a dozen doctors, medical equipement and supplies, but cannot get ahead of the student loans because so LITTLE is ever applied to the principal.
I would rather pay this back - and have paid several thousands so far - but not enough to get ahead of the capitalizing, compounding interest. My Interest rate is a Clinton-era 9%. I cannot refinance it, I cannot reconsolidate, and unless I divorce my husband of 20 years, I cannot qualify for IBR in any significant fashion. He makes decent money, but with the ongoing medical needs of our daughter, it's difficult. In addition, I am in a rural area with 20% unemployment, and professionally, I am so 'out of the loop', I would have to go back to grad school for a year to recertify, etc.
We cannot declare bankruptcy, we do not use credit cards, we live vERY frugally and modestly, I garden, can, use it up, wear it out, make it do or do without. We are NOT in default. We are not behind in our bills. But I can't make any headway against these loans...
Student loans carry all the worst components of commercial debt (capitalized interest, fees, penalties which are then compounded), the minimum payments of credit card debt, the deferments and forbearances of student loan debt (which were INTENDED to assist new grads but have become a death-trap) PLUS **ALL CONSUMER PROTECTIONS** have been removed for the borrower's LIFETIME.
If I default, the Feds have to pay the commercially inflated balance for PRIVATE GAIN. And then they can collect AGAIN on the SAME $$ they have already been paid for..
I am 55 years old. I probably will never get out from under this behemoth, but it certainly hasn't been because I didn't "want" to pay, and frankly I resent the implication that 36 million current and former borrowers actually 'signed on the dotted line and want a bail-out'. Pardon me, but 'bullshit'. Most wanted to pay their loans back, but NO ONE told them that their payments would rarely hit the principal, and that because of the way repayments are structured, they would be paying on these damn things with their death benefits.
Dorothy, I am 54 with $68K in loans, they take $500+ out of my bank account every month on a 40 year repayment plan. It is killing me,. I am a teacher and losing income every year I teach. I hope someone can help. I have paid enough in interest over the years to pay off the loan +, but with compouding, I am sunk.
In hopes that you really are looking for educated discussion, I will respond to your ostensible straight question. I undertook student loans at age 54 in an effort to feed my young children while working on a nursing degree. Returning to school at my age sounds like madness but I thought that, after being marginally self-employed for much of my adult life (after serving 5 years in the military), it was past time to think about retirement and supporting myself in my dotage.
School was traumatic and took me 3 years to complete my degree (this after acquiring a bachelor's degree and a master's degree (used my GI bill for the master's) in my younger years) and my dream was to have a great nursing job wherever in the world I wanted to be. After my first year of nursing, I relocated my family 1000 miles away so that I could help my elderly mother and her Alzheimer's-afflicted husband. Now I'm in my 4th year of nursing, my children have graduated high school and gone to excellent colleges, courtesy of excellent financial packages that were not available to me.
I love my job most of the time and I work for an excellent community non-profit hospital. I have been here for 2.5 years now, have moved up the clinical ladder, and received a small raise for that. In next years "benefit" package, the increase in insurance cost to me will equal about twice what my raise was. And we are told that we are fortunate to have jobs because nursing is no longer a guaranteed job with cuts and hospital closings around my new state. Yes, I am fortunate to have a job, especially one that I love. They will get no argument from me about that.
The upshot of all this is that the hurrier I go the behinder I get. I have finally been able to put a small amount of each paycheck into a 401K that, all things being equal, will allow me to retire at age 75! My student loans will not be paid off by then, despite my devotion to my monthly payments. I'm not looking for total forgiveness. I have undertaken to work in one of the poorest states in a field that is typically understaffed and serves under-served populations. I believed one of my creditors when they said that I would have the loan forgiven after 2 years. Didn't happen. Still paying.
The major corporations, banks, oil, etc, have been the recipients of my largesse without my permission. I pay taxes, they get the benefit. If anyone benefits from bail-outs, reduced interest rates, or forgiveness of debt, it should be the people who will put the return back into the economy by actually investing in it, by consuming in the marketplace, and by re-creating the consumer class that has all but disappeared. It is abundantly clear that the beneficiaries of bail-outs have not invested in nor have they any intention to invest in the economy, the infrastructure, education, healthcare, or anything but their own pockets. Those of the uppercrust who are legislative lifers and/or who answer to the top 1% are also unwilling to permit the government to take care of these critical concerns simply as a vendetta against our duly elected president.
I hope that you are able to achieve whatever dream you went to school to accomplish. Chances are that, unless you are connected, you will not achieve the American dream as it is being taken from all of us by the top 1%. Unless you are connected you will also be unlikely to achieve the exalted top 1% (and with two business degrees, I'm guessing that that is part of your dream). I, too, will continue to pay my loans because I am unwilling to risk the consequences of not paying them and because I am an honorable person. I did not start out looking for a hand-out, but if forgiveness or alteration of the student debt structure takes place, I will be the first to take advantage of it. I'd be willing to bet that you will, too. I am willing to fight for you and your dream, even as I fight for mine. Best wishes to you.
Honestly, I don't know how will I pay for those loans when my income is so less.
I think you're right that the borrowers agreed to the terms of the loans but I'm not sure that they're getting what they bargained for when they entered the contract. Student loan debt is different than almost all other forms of credit because, to a large extent, it can NOT be discharged in bankruptcy. As a result, it's a tremendously secure and reliable source of long-term income to banks. Accordingly, these banks are loath to deny student loans to anyone with a cosignor, regardless of their creditworthiness.
The availability of these loans have also enabled schools to not only expand their admissions/enrollment but also increase the costs of tuition with little consideration of its relationship to income or lifetime value. This expansion of admissions has driven down the value of the education to borrowers b/c it's increased competition for employment. I don't think the education industry has done enough to explain the benefits, or lack thereof, of their product relative to its costs.
I applaud your ambition and commitment to your future evinced by your business degrees. From a business perspective, if a company was given the opportunity to diminish/forgive their debt and did not avail itself of the opportunity to do, wouldn't it seem foolish? Would you invest in the company? If you were a shareholder, wouldn't you be angry with mgmt if they didn't take advantage of it? Indeed, I'd go as far as to say that this hypothetical company and CEO had a fiduciary responsibility to have its debts forgiven under the circumstances and could be liable for mismanagement in civil court.
I think your argument is certainly honorable and you should be commended for it. I just think that education is a big business and continues to thrive b/c of regulatory schemes skewed in their favor. They've used the guarantees related to this particular debt to expand their business and increase its cost. Somehow, the product needs to hew closer supply/demand.
I can appreciate the fact that you are struggling with why there is the need for student loan reform. From what you describe you are pretty fresh out of college, just getting your adult life on track with buying your first home, getting married etc. One thing though, I more than 3x what you owe, as do several others on this site.
Now, let's fast forward say 3 or 4 years. Let's say your company lays you off, the demand for your skillset is no longer what it was when you graduated college? Little did you know how things would change when you began your college degree. So, you put your loans in forbearance. You get another job say in 6 to 8 months (if your lucky), but it is much less money. In the meantime, interest has continued to acrue on those loans. So, when you go back to work, your payments are higher, your salary is lower--- what will you do?
Let me share with you that people who went to college for jobs that were in HIGH demand at the time and even for a few years after finishing school. Then, companies started looking at all the ways they could save money by outsourcing. I'm not talking about your blue collar manufacturing work. I'm talking about jobs in technology. I worked for Sprint (#3 telecommunications company) and they laid off thousands of workers several years ago flooding the Kansas City market. I finally found a job about 10 months later at about 60% of what I was making before. It was a contract job that lasted for about 6 months. I was back on unemployment (don't think I didn't continue looking that whole time for a permanent position).
To spare you the boring details that is now water under the bridge, the Kansas City job market was very unsteady for several years in my field. Moving wasn't an option. I had 3 separate penalties applied during that timeframe between 18% and 23% each time when I was in default.
Now, about 5 years later when I am in a fairly stable job and finally earning what I was earning what I was earning when I was first laid off, my loans are now approaching $180,000. My original loan balance was $40,000 when I left school. I would be HAPPY to repay what I borrowed- but what they are expecting me to pay back now is worse than Payday or Title loans. Even THEY are regulated!
The student loan company now wants $1,300 a month. The efforts Obama is trying to make is a good start, but for all the reasons Robert Applebaum has already stated- it falls drastically short.
So, just keep in mind that if the $140,000 was "forgiven"- that was NOT money I was given- simply fees, penalties and interest tacked on after the fact. There are TENS of THOUSANDS just like me and so it's all money just on paper at that point.
I agree with you. I knew what I was doing and made my choices and have every intention of paying back my loans. I think this is the right thing to do. And I agree that simply having one's student loans forgiven isn't the right course of action. If you made a personal choice, then you have the personal responsibility to repay the loan.
However, what I find unjust is that student loans are not dischargeable through bankruptcy. Why? If you find yourself in such a financial crisis that you need to file bankruptcy, then why can't you have this debt taken away as well? Or, at a minimum, have the interest discharged and come out of bankruptcy with only the original loan amount to be repaid at a low interest rate? Why harness a person who has filed bankruptcy with both bad credit AND a loan that can be as much as a house payment with an interest rate more than double a home mortgage interest rate?
Reforming student loans is a more logical, responsible choice.
I understand what you are saying, as well.
The difficulty for me is that I was working full-time, and until I became disabled, I was able to keep up with the payments. I have one set of loan payments with interest rate more than double the interest rate on the first set of loans, with less principal. The interest is continually being added to the loan while it is in deferment for long-term unemployment.
I do think that the program definitely needs reform.
That's an excellent point, and one that I certainly don't disagree with. I was required to take a class on Business Law as part of my degree, and even then I thought, "there's just no escape." While I don't think "I took out too much debt and can't afford to pay it off" is a justified reason to start begging the government to cut you a deal, there are a number of situations - your example included - where there are reforms needed. Thanks for the reply.