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$1 Trillion Dollars In Defaulted Student Loans, And How Are We Going To Pay Them Back??

I went to a prestigeous college for both the second half of my bachelor's program and my MBA. What started out as a $60,000 debt is now over $250 thousand because of interest and penalties. I took time off to take care of my aged, debilitated parents, who had senile dementia and Allzheimer's Disease. During that period of time, I fell behind in my student loan payments, and no matter what I did, I couldn't get the government to cooperate with me... so they sent me into default. (I even offered to go to jail to repay it!)

Mine is ot an uncommon story. What the HELL kind of educational system do we have in this country when students, who have to pay exhorbenant costs for schooling are forced into debt with outrageous terms? If any lending agency were to pull the financial stunts that the government is pulling on students, they'd be FRIED in Court and put out of business.

Not only to we have to pay for college for the REST of our lives (virtually),, but we have no rights that common, everyday people have when it comes to bankruptcy or mitigation of loans. When are we going to put a stop to this and one day say, "ENOUGH!"?

For the 'greatest nation on earth', we're doing a rotten job of educating our children,, and a punitive job of 'helping' out people who want to further their educations. What is a wealthy nation if it's populated with morons?... or people who are punished for trying to make their lives better through education?

I think that it's time for individuals with these abusive student loans to rise up, call/write/email their Congressmen and Senators, and MAKE this a political isssue. I don't begrudge celebrities, who are making millions of dollars a year doing their thing (although I think that it's ridiculous for an entertainer to make THAT much more than a teacher or a Ph.D.) , but I DO object to the lack of attention to the ONE thing that's going to keep us in the top ten nations, namely education. Personally, I'd rather drive on crappy, bumpy roads and know that there are a lot of intelligent people driving around me, than to have great highways, the best weapons and God-knows-what going on in governmental projects.

I was watching the news the other day, when a story came up about a project that the government wanted to do. They showed a pile of huge notebooks with specifications and commentaries in them, and said that the information cost $5million! I've personally written project analyses... my husband has a Ph.D. in environmental studies, and I KNOW that the consulting firm that was used just ripped off the government.

When are we going to start saying"NO!" to outrageous costs and putting our money into our future, and start rescuing those of us who actually believed in that future?







fishsweeper fishsweeper 51-55, F 17 Responses Apr 8, 2012

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It just goes to show how incredibly greedy our government and corporations are in this so-called "best nation on the planet"(more like one of the greediest nations on earth). There are so many students with high potentials that come from poor family backgrounds yet still couldn't have access to prestigious graduate schools because how highly steep it is in price. While we do have the best college universities in the world, overall education is more of a business here in the US than anything else. I can't agree with you more about how we as a society should put an end to this catastrophe.

The problem for me is that I wanted to start a business, but I had a school loan, which made it impossible for me to start a new business! The whole thing is crazy. The student loan people called me last month and offered me a deal to pay $10/mo for a year on my loan, at which point it would be out of default. It sounds too good to be true, so it probably isn't going to benefit me... After all, what happens in a year, when they want me to participate in a new program? I have no credit!

Just after looking at the current employment rates. statistics say that 53 PERCENT of college-educated Americans are either unemployed or have low paying jobs that don't require a bachelor's or even an associate's degree. It makes me wonder, is it better for me to continue going to community college to get my degree in foreign languages(Japanese or Mandarin Chinese) or just find a trade school of some sort that teaches the foreign languages that I desire for a MUCH cheaper price and MUCH less risk?

If there is such thing as a trade/technical school that teaches foreign language(The only thing that comes to my mind when trade school is mentioned are mechanic or engineering careers)?

There ARE such things as language schools that teach people to be Court or medical translators. The only problem is that getting an AA in language won't go very far, job-wise. My son got his b.s. in Spanish, and, although he DID teach for a while, he remained largely unemployable in that field because he didn't get a teacher's certificate when he graduated. He could have 'reinvented' himself and gone into a particular area of industry, but schools convince students that they'll be employable immediately after graduation, which isn't true!

@fishsweeper: So is it best that I should just go get my certification in foreign languages from a langauge school rather than a AA/BS from community/university?

@fishweeper: That way so I don't end up in debt like the majority of the unemployed college graduates?

don't do it.......the reason they want you to repay at 10 dollars a month is because the collection procedure restarts with your latest payment date. So...if you owe 100k in student debt and have not repaid any in 10 years tha chance of recovery is only .......say ......5 percent. If they sell your bad loan at 5 percent of 100k they get 5k. If you pay 10 bucks then the recovery process starts all over .........your debt value goes up, they sell the bad loan to someone else, and all the time clicks associated with debt collection starts all over.

they will make more money selling your loan to someone else than they will collecting it from you.

OOPS!

Just because the private universities might be the best, it does not mean the best students or the most ambitious attend them. A degree in Accounting is the same anywhere and so is the CPA exam. A university degree is only good for your first job, after that it is up to you ..........nothing replaces ambition and motivation.

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I was in trouble with payday loan and don't know what to do but my brother in law told me about a payday loan consolidation company called Be Free Financial, I gave them a call and talk to Will he assisted me and explained how the program works, now i'm saving 100's per month on my payments. Call 407-949-0305

WE ARE NOT GONNA TAKE THIS ANYMORE AND WE ARE GONNA SUE THESE PEOPLE - seriously this is ridiculous and should be illegal and definitely predatory lending practices - contact me if interested in joining our suit at collegesapp at g male dot com... that is college students against predatory practices - shoot me your story and a contact email address for the attorney's or I to send you the forms to join us. Doesn't matter if private or sallie/freddie loan just when it comes time you will need all your loan info. Thanks.

Education pays, the government. They are making a new form of educated slave by high interest rates and penalties. They are getting away with this and burying the educated class in debt with no perks of higher education. Education has been the worst good decision of my life. Why is graduate school interest twice as high as undergrad. it should be the same or lower for taking the initiative to gain more education and the risk involved. We should all get a group of lawyers and put forth a class lawsuit against them all.

I completely agree with you. The interest on my loan is ridiculous. One would think that the government would be interested in educating people, and not punishing them for taking the initiative to learn as much as they can!

why is college so expensive? drop the price of college n loans wont be as bad

It might have something to do with the 50M dollar athletic stadiums that don't contribute to learning and the 5M dollar salaries that football coaches get like the one at the University of Texas

Check bankruptcy laws around the country.<br />
I don't know if they differ from state to state, but I know that if you live in South Carolina that they only look back 3 years on your credit rating as a reference as opposed to some states that are 7 or 10 years.<br />
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Maybe the rules for bankruptcy are more lenient too.<br />
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Good Luck.

The laws for bankruptcy don't include federal loans. I'm screwed right now... but since Obama is touting his new policies regarding student loan debt, I'm going to try again. Since I'm in default, I doubt that I'll be considered, but it's worth a shot!

The student loan program in its current form exists for the bankers, not the students. Name me another industry where you sell a product (student loans) at a discount to the student and the govt pays the difference from the market rate. <br />
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The govt guarantees the loan to be repaid and the banks bundle the loans to be sold to investors. Heck, they even created a govt org. (Sallie Mae) to handle it. That is why tuition is so expensive because the colleges have a guaranteed income stream that goes up with inflation every year. The increase in tuition has exceeded the cost of living for 30 years.<br />
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Several studies have been done that suggest if student loans and Sallie Mae were eliminated, tuition would drop 30 percent in one year. Student loans would exist but each college would offer them from their local bank and the govt would not guarantee them.<br />
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The govt is not responsible for ensuring the success of a private business model.<br />
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It is organized crime. If it happened in any other industry it would be collusion and price fixing.

I've already looked into the possibility of eradicating my student loan debt through bankruptcy, and it's only possible under certain circumstance, none of which are applicable to me right now. There ARE attorneys out there who specialize in student-loan related bankruptcies, but finding a competent attorney in that field would be like finding a needle in a haystack. Furthermore, they all want retainers that I could possible afford right now. If I could find an attorney who would take the case and let me make reasonable payments, it'd be one thing... but just filing the paperwork is prohibitively costly, so I'm 'stuck' at this point. I hear what you're saying, and I wish that I could afford to attack this thing both both pistols blazing... But there's no one out there that I've found, as yet, who can help me.

The outrageous debt and the terms and conditions that came with it weren't forced on my... I willingly signed those documents, and not having a crystal ball, I just didn't know what the future held for me, with respect to my parents and repayment. I mouse-trapped myself. I think that the government is getting the raw end of the deal because those idiots won't negotiate with me... so they get WAY less out of me (through their own rules and regs) than they would if they settled. Thanks for your comments! - Fish

It doesn't matter if you signed willingly, aside from the terms and conditions you agreed to, federal and state statutes are still applicable even if they violate the terms of your agreement........Well the outrageous debt is what you can fight in court, there are statutes in place so no government entity or businesses(loan offices)can charge you outrageous amounts of money through debts; im not sure what state you stay in or what the local administration's ordinances say about fines and debts but what the statutes dictate is that no government entity or business can charge any individual person outrageous amounts of money in the form of debt fee or fine that is unreasonable according to the person's financial situation to what is owed...You can be asked to file bankruptcy to consolidate your debts with whatever company/government you signed agreements with; but if you decide not to, then you are required to pay your debt. However you can go to court and ask the debt be reduced due to your financial situation, and 8/10 times any lawyer with some knowledge of the law can get your debt reduced quite a bit. If the court agrees to it, then your debt will be reduced but you will have to pay the complete amount of the agreed upon fee in increments.....And the government isn't getting the raw end of the deal, they will keep track of your debt and when you finally have the financial assets to retire and live peacefully, they'll track you down and liquidate your assets. They don't want to settle with you because they know if they hold out, you'll accumulate some monetary assets that they can pull from your bank accounts; please don't let them take advantage of you, get a good lawyer and get your debt squared away. Good luck.

Thanks for the information! I made an unsigned agreement with a company that bought my debt and is allegedly going to get my loan out of default. I have a hinky feeling that I'm going to get screwed if I pay them, and my loan will be due... and I'll end up in default anyway because I'm not going to throw my husband under the bus and involve him as a cosigner in this situation. What am I actually doing by making $10/month payments, and what happens next?

You might want to talk to a lawyer who works in settling debts because even with interest and penalties, those amounts seem way too inflated; and for your student loans, the government is supposed to work with you to pay them off....It sounds like you are being taken advantage of because outrageous debts like that cant be forced on you to pay them, a debt in legal terms is defined in the same category as a fine; and outrageous debts can't be forced on to someone who has no possible way of paying them, the debts must be paid for over time when you are capable of...Talk to a lawyer to find out more, you might be able to get your debts cleaned and possibly even some money in a counter-suit for violating contractual agreements and statutes from the government and whatever bank you went through to get your loans....You have to work the system because they're just going to keep trying to screw you over if you don't show them that you know how to handle yourself.

We have one of the highest qualities of education available in America, but unfortunately, the cost of it is prohibitive. If one does a cost-benefit analysis, it's definitely worth getting a bachelor's degree, but anything beyond that is really questionable these days. Sure, we can assure ourselves of a better chance of employment with a master's degree, but the pay scale isn't necessarily going to change very much. Time is a really big factor, as well. The more time we spend being employed, the better are our chances of paying back the loans and then reaping the rewards of the degrees we get. In my case, I got my MBA when I was in my 40's and was 'derailed', as far as payments were concerned, by the care that I had to give my dying parents. Now there's no way that I can possibly pay back that loan in its entirety without some 'windfall' event occurring. The government absolutely refuses to bargain fairly with me, and is basically screwing itself over. I would say that 'I don't get it'... but knowing the government as well, as I do, I can honestly say that it's loaded with morons who follow archaic rules instead of using common sense. Thanks for your comment, and take care. - Fish

That's what I've been doing! lol

I can't but wonder how a person in an MBA program didn't recognize the seriousness of the situation before it came to this. It doesn't say much for the school either. Perhaps it is best you didn't complete your degree so you never find yourself having to plan or advise others.<br />
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By the way, there are many intelligent people who never attended any schools of higher education - yet many unintelligent ones who did.

What screwedme over was taking care of my parents and notbeing able to make those payments to the government. You're absolutely right about knowing the importance of staying 'current' in some way, and I did make $10/month payments; but we moved out of state, and the d#@mned post office didn't forward our mail in time, so I was no longer in a position to negotiate!

Only to find out your whiteboard doesn't take messages, darn!

I just read your previous whiteboard postings and some people are real cads.

$10 a month isn't going to keep you out of default on a 60k loan.

No kidding!

It'e a $60K loan that became a%300K loan because I chose to take care of my dying parents instead of working. YOU try giving up everything that you've built and start changing crapped-put diapers and bed clothing,and THEN tell me that I'm a dead beat!

Appealing to people's emotions isn't going to work in this situation. I understand you have had a misfortune but the reality is this loan WILL NEVER GO AWAY under the current laws. Also no one is going to hire someone to work with their finances if they don't have their own finances in order. They will garnish your social security if you are still in default. Get your payments in order otherwise you may end up poor for the rest of your life.

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tax free loans for students here in nz.<br />
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problem,paying it back<br />
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no work.

Lucky You!! Wish it were like that here!

my generation, all education was free.ALL

It should be straightforward to negotiate a repayment moratorium if a borrower has less than 20K of income, and no assets other than retirement plans and 5-10K in the bank. You are over 55; how did you run up 60K of student debt 30+ years ago?<br />
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If you pay tuition for graduate school, that means that the department does not really value you. Only pay for a professional degree with a clear career path.<br />
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My understanding is that good MBAs now cost 100K+. Don't get one unless you are prepared to do 10 years of hard corporate grind to earn the money to pay off the loan. I paid off all my student loans in my first year on the job. I could afford it because I was single and did not buy a house.<br />
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A defaulted student loan is a black mark on your credit record, and may mean you can't buy a house without a large downpayment. But they can't go after your house or car. I have read recently that a damaged credit history can keep you out of some jobs. Correct me if I'm wrong.

I went back to school after I was 40, and had to take care of my dying,debilitated parents instead of making a living taking care of them for 7 years. I don't know if my debt will keep me from getting a job... but as a business analyst, I wish that I had a better credit record!

I learned a few months ago that HR departments in some cases do a credit check on short listed applicants, and a damaged credit record can mean that your application is thrown out.

We dropped the ball allowing students loans to be protected from bankruptcy. Nobody squawked when that and other provisions were changed by Congress. When I went through college you still could have the debt discharged. Guess that's why they changed the rules. I, however, PAID my loans as the interest was only 3% back then. <br />
They paid ME to go to graduate school on a small stipend [it helps to study chemistry which has short supply and high demand].<br />
Lobby Congress to change the laws...why should Donald Trump PLAN his bankruptcies to become rich when honest people like you are trapped by circumstance?

Hey Freed... Guess that you didn't have to stop working to take care of you disabled, aging parents while the loans kept collecting penalties and fees. EVERYONE in this country has the right to declare bankruptcy, except for students.... People like me, who could otherwise be incredibly contributory in finance... if I didn't have a student loan default on my record!

I think it's totally stupid to put people into debt they can never repay .. With the money that governments are wasting ... Do not worry, here in France, it's the same thing !

Oh... You mean that everyone qualifies for a school loan for outrageous unniversity fees, and then the government starts punishing them for not being able to keep up with the debts, even thopugh the formers students are working their butts off trying to keep up with the whole mess? I thought that his was just a USA problem; but apparently, it isn't.

This is sometimes the same thing in Europe .. certain types of scholarships granted are difficult and often this can lead to difficult situations...

Are you talking about taxpayer funded bailouts? ...keep the work, spread the wealth? Or are you talking about holding the education system and government accountable for funds?

What I'm talking about is having an educated nation of people that can compete on an international level. Face it.. We're screwed... If we don't give loans to students, we won't have any global competetive edge... but, at the same time, we're allowing colleges and universities to charge exhorbenant amounts of fees for tuition, and then punishing college grads, who are having a difficult time just staying ALIVE today, with interest and penalties, which some of us couldn't repay in a lifetime!

Yeah, maybe I'm talking about a government bailout... How much have we spent in the Middle East trying to 'save democracy' for people who don't even know what it means? Why don't we save democracy for ourselves instead? ANYONE can file for bankruptcy except for a student; and if that loan is discharged, it's because the person is either totally incapacitated or dead. Why is war okay, but a low-cost higher education is not? That makes no sense to me.