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Yes, the rules governing student loan payback are harsh. Too harsh, IMHO.
But the real problem is that so many people have no concept of how loans work. We need to make financial education courses mandatory in high schools, and anyone taking out loans should be required to complete a course/training on exactly how the whole loan process works, including the consequences for failing to pay back loans, before receiving any money.
I fell into a student loan trap myself in my younger, less wise days. My parents were people of very meager means. I went to a state college, but even with me working and my parents contributing what little they could, we couldn't cover all the costs.
My parents encouraged me to take out as many loans as possible, which I stupidly did. They had no financial education, and neither did I. Interest rates were ridiculous on Stafford Loans when I took them out (somewhere near 10%), which made the loans really expensive.
After graduating college, I had trouble finding a full-time job. But it didn't matter. NJHESAA came a knockin' right on cue. I couldn't make the payments on time. I eventually got them to defer payments for an extra six months, which at least helped me from racking up any more late payments and dings on my credit report. It took me about ten years, but I finally got the loans paid off.
Now, much older and wiser, I am much more aware of the consequences of debt, student loan or otherwise. If I had known half of what I know now at 18, my view on taking out so many student loans would have been very different.
Do your homework, people. Don't be a sucker like I was.
In the short-term, that is just fine and dandy.
However, on a long-range basis, when you need to obtain a mortgage or any other type of loan, your bad credit rating will disqualify you or--at the very least--cause you to pay a higher interest rate. You may even be denied certain rentals when you carry the stigma of a bad credit rating.
When you apply for a credit card, the same problems will occur. Even when applying for certain types of insurance and for many jobs, a credit check will be done, and you can find yourself being denied insurance or employment.
The bottom line is that there is no such thing as a free lunch, and this situation WILL haunt you for the rest of your existence.
At some point, you will need to make good on your loan commitment--or suffer the consequences in many different areas of your life.
They can go f*** themselves. I will roll the dice.
I don't want either your name or your address, but--trust me--any collection agency can easily obtain both your address and your phone number. That is why a situation like this will follow you for all of your days.
I didn't think this situation was anything new worth profiling, but student loans should come with a giant disclaimer "IF YOU DON'T MAKE PAYMENTS FOR ANY REASON AT ALL WE WILL RUIN YOUR LIFE!!!!"
The entitlement generation...
why would you need a disclaimer for ANY LOANS to say that? If you dont pay a loan back your life SHOULD be ruined.
You borrowed someone else's money and you agreed to pay it back. So pay it back.... why should lender give a **** what your problems are. Unless you are dead, you pay it back. It's not their problem you are a moron and decided to take out a 80k loan for a philosophy degree and now cant find a job.
why would you need a disclaimer for ANY LOANS to say that? If you dont pay a loan back your life SHOULD be ruined.
You borrowed someone else's money and you agreed to pay it back. So pay it back.... why should lender give a **** what your problems are. Unless you are dead, you pay it back. It's not their problem you are a moron and decided to take out a 80k loan for a philosophy degree and now cant find a job.
What bothers me about student loans is not the fact that they must be paid back (there is no collateral to give up like a car repo), but the fact that they have so many protections; both government and private, and they're serving a segment of the market that is most vulnerable (parental emotion) and ignorant (inexperienced young adults).
The whole thing is exposing our society's lack of financial education.
No other debt instrument that I can think of has such ruinous consequences. Maybe if kids and parents really understood the potential life-altering possibility of default, they'd focus more attention on going to college for the education that will provide at least some kind of assurance of making a living to pay those loans back. You see parents all the time encouraging their kids to go to school, almost just for the heck of it, just to expand their horizons or whatever. Yikes.
After a certain age there's no one to save people from their own decisions but at least give young people the education they need to avoid making such drastic mistakes.
They need to go after people even more. Too many people "going to college" just to hand with their friends for 4, 5, 6 years. Make all of these stories public and more people will think twice before wasting OTHER PEOPLE'S MONEY
What bothers me about student loans is not the fact that they must be paid back (there is no collateral to give up like a car repo), but the fact that they have so many protections; both government and private, and they're serving a segment of the market that is most vulnerable (parental emotion) and ignorant (inexperienced young adults).
The whole thing is exposing our society's lack of financial education.
No other debt instrument that I can think of has such ruinous consequences. Maybe if kids and parents really understood the potential life-altering possibility of default, they'd focus more attention on going to college for the education that will provide at least some kind of assurance of making a living to pay those loans back. You see parents all the time encouraging their kids to go to school, almost just for the heck of it, just to expand their horizons or whatever. Yikes.
After a certain age there's no one to save people from their own decisions but at least give young people the education they need to avoid making such drastic mistakes.
I agree. I graduated with about $25,000 in student loan debt, which isn't particularly high compared to some of my peers. However, that number could just as easily have been $50,000, or $75,000, or even $100,000. If they told me I needed more loans, at that age, I would have just taken them without giving a second thought regardless of interest rates or repayment terms. Because after all, going to college after your graduate high school is what you're supposed to do. The cost of a college education is priceless, so yes, please sign me up for more loans! I mean, I'll be making a ton of money with my degree anyway, so it doesn't matter how much I borrow!
Most young people are very short sighted so it is important that they are educated on the true costs of going to college.
While I can sympathize and student loan in our country is a mess.
How is this any different then another loan you take out with cosigner? If my parents cosign a mortgage with me and I pass. My parents are not relieved of the mortgage responsibility whether it be car or home.
Difference of student loan is that its more opaque than loans for car or home mortgage. We definitely need clarity on that. But...as the adult who cosigned for a loan...I'd be surprised if there wasn't a clause in the paper somewhere that covered this stipulation.
If I get to were a mortgage for say 500k to purchase a home and my parents agreed to be a cosigner. You bet I'd get a life insurance so they don't have to deal with it if I pass. So if you are going to take out student loans, make sure you have plans.
edit: My view is you don't cosign for loans you didn't read details of or have plans for. You don't get things beyond your means including education.
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