Friend thinks $100,000 college loan is reasonable - help?

[K-Luv]

Originally Posted by Sonnenwende

I wouldn't get into $100k of student loan debt either. That is more evil than car loan/mortgage debt in that you can't bankrupt it. I'd look to spend less than $20k.

I find it interesting that so many people think that debt is okay because in the end they can wipe it out by declaring bankruptcy, especially since it is becoming harder to declare bankruptcy. When you can longer make mortgage payments and for what-ever reason cannot sell your home, the bank takes it back. If you can't make your car payment your car gets roped. If you buy a $15,000 television set that you cannot afford any longer, that can be repo'd, too. Point is, with every line of credit, except for for student loans, the creditor can claim the property or item purchased. You cannot take away someone's education from them. Another thing is that all defaulted loans are written off and then sold to a collection agency. So, the creditor still gets paid at the end of the day.

Now, while you may not be able to bankrupt a student loan, you can put them into deferment until a time when you are able to once again resume payment.

Originally Posted by violent cello

I hang out with 17-year-olds because I'm a creepy old witch of course

As for the fact that it's not my life - I take it you've never tried to help anybody out who was completely clueless about something that was a huge decision. Young people here do not get enough financial advice before they take out massive loans and I was trying to break that trend.

Yes, I have helped people out, of course. While I think that it is a bad idea for your young friend to take out such a massive loan, I only do so because at 17 she more than likely has an idealistic view on the issue and doesn't fully understand the situation that she may be getting herself into. But, it is her life, and if she has her heart set on attending an East Coast school her having to take out 100 grand in loans may be a reality. Although, she would have to have her parents as co-signers; no legitimate agency is going to hand of that kind of money to a teenager.

Originally Posted by jlawrence01

Maybe some of us really question whether certain degrees are actually worth the price tag.

Hey, I question this, too. Fortunately, that is a decision that can only be made by the individual gaining the degree.

Originally Posted by jlawrence01

$100 for MOST undergraduate degrees is a complete waste of money. You are putting yourself in a financial hole that will take you MOST of your career to dig out of.

I agree, a $100 degree is probably not going to be worth the paper that it is printed on

$100,000 in student loan debt can be manageable, and even paid off in a relatively quick amount of time. What it all comes down to is lifestyle. It is common for college grads, especially those that attain work after college, to buy new cars, stereo equipment, homes, and anything else that they could not afford while in college. All of this will compound on top of the student loan debt and can quickly get out of hand. Most people, particularly Westerners, are materialistic. When the money pit begins to get deeper and deeper, it is easy to blame the student loan as the culprit and not the new car sitting in the driveway. If recent grads continue to live on a modified college budget for a few more years after graduation, most of, if not all, of that hundred grand could be paid off.

It can be done. The problem is that most don't want to do it.

[InformationPlease]

Originally Posted by violent cello

I hang out with 17-year-olds because I'm a creepy old witch of course

As for the fact that it's not my life - I take it you've never tried to help anybody out who was completely clueless about something that was a huge decision. Young people here do not get enough financial advice before they take out massive loans and I was trying to break that trend.

I hope I don't come off as bitchy when I say this but I just wanted to add that there are many ways to help people in every situation.

In this one, alternative to discouraging her from pursuing the school of her "dreams," you could...

• help her brainstorm ideas to supplement her income while in school so as not to take out so much debt
• help her fill out applications for random private scholarships (urban legend in my day was that there was even one for left handed redheads)
• help her find a therapist or school counselor with whom she can explore the relationship with her parents
• ask her if there's a safety reason she needs to be so far away, and if so, do what you can to make sure she's safe right now
• help her research similar schools all over the country and offer comparative tuition rates
• explore careers of interests and relevant degree areas to that field to see if she might even change her entire area of interest for further education

I think it's worth considering that she may have very valid reasoning behind her decisions despite your assertion that her process is flawed. I come from a family with parents who literally made my life a living hell for my first 18 years and TRIED to as I continued into college, etc... For me, distance was the ONLY thing that saved my life. Literally, with no exaggeration. She could be in a very similar position and how would you feel if your "advice" discouraged her from putting a safe distance between herself and her family?

It's equally likely that she just wants to have a little fun with delayed consequences. Sometimes, immaturity allows a freedom that leads to life altering consequences... bad on occasion but GOOD sometimes too!! Why on earth would you want any responsibility for the outcome of her life decision? Sure, helping her avoid debt could teach her fiscal responsibility but it could also cancel out opportunities for her that wouldn't otherwise exist. Why not just defer that decision to the person who has to handle the consequences in the end?

It's my opinion and generally my practice that all we can do in life is provide information. As much as it might suck in the end, people deserve the right to choose... even those who consistently make poor decisions... until society as a whole determines they are no longer fit to participate within a decision making process as determined by a court of law.

I'll leave you with my fave quote ever as it might apply here; if even in a small way. Sometimes, through trying to help others, we are really just extending our personal beliefs onto them in a way that limits their growth.

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

CS Lewis, God In the Dock