If you want to read a great but depressing article on student loans and how difficult student loans are to discharge, read this article from the New York Times from last year.
While I certainly am not advocating that student loans should be easily discharged in bankruptcy. If so, I’m sure that there would be many deadbeats cheating the system. But when partially blind people are getting turned away, it’s depressing.
Student loans are something that is very necessary for people that don’t come from wealthy families. I worked all through University and still had to get many student loans. Not just for tuition and books but more so just for living expenses, etc.
My biggest problem is that the system they have in place is basically broken. There is almost NO RISK at all for these lenders. Even social security and disability disbursements can be withheld.
Lenders are all lined up to give tons of student loans without regard to the major that will be received, the type of job the student can expect to get along with their expected salary. After all, it’s almost a guarantee that they will get paid back and the interest rates are surprisingly high on them.
And it doesn’t matter if the student already has loans out. Students can pile loans on top of one another.
Again, I’m not saying that I’m against student loans because I’m definitely not. I wouldn’t have made it out of University without them. But some of the stories i’m hearing now from friends are pretty bad.
My best friend’s sister in law graduated a few years ago. She went to some private nothing special school that was very expensive. She got some almost worthless degree. Then she went to grad school but it didn’t sound like it was a beneficial degree either.
She has something crazy like $180,000 in student loans and it turns out she has 6 separate loans out. Some with interest rates as high as 8%. She finally had to cash in part of her 401k to pay off some of them as her and her husband couldn’t even qualify to purchase a house with all her debt.
