Posted on 05/31/2012 6:39:59 AM PDT by Michael.SF.
Even as total outstanding student debt rises to $1 trillion, lawmakers have yet to allow loans to be discharged in bankruptcy.
Without an escape clause, these loans can strangle a person.
Take 36-year-old Nick Keith, who remains $142,000 in debt eight years after graduating from culinary school. He's featured in a new film, "Default: The Student Loan Documentary," in which several college graduates expose the pitfalls of the private student loan industry.
"I want to educate the public about the facts," Keith said. "My life has become a daily swim in a tar pit with very little hope of ever getting out."
Keith's father only agreed to co-sign a student loan if he stuck with an engineering degree at Iowa State University, but even with decent grades, he knew it wasn't a right fit.
He dropped out sophomore year and later turned to the California Culinary Academy–without his dad as a safety net–hoping to put his love for healthy eating to use.
"The culinary academy commercials were on the Food Network every 15 minutes," he said, and only required 12 months of study with a three month externship.
He fell for their sales pitch, hook line and sinker
"I should have seen all the signs. [The campus tour guide] had a used car salesman answer for everything," Keith recalls.
(Excerpt) Read more at finance.yahoo.com ...
My son just finished his first year of college. The Universities he’s spoken with and the one he’s attending are VERY blatant about manipulating the kids.
They will openly and repeatedly tell the kids they are an ‘adult’ and their parents don’t control them any more. Exactly what kids want to hear.
Sure this guy is dumb for getting that deep into debt. However what the universities are doing is unethical and immoral.
He got a first class degree in victimhood.
Nick’s Dad must be so proud of his son who refused to take any of his advice and is now a homeless bum living out of a van and collecting “permanent disability” checks
Dad dodged a bullet by not co-signing a loan for $60K to make his son a short-order cook, but what heartache is tough love, to see a beloved son sink so low
Funny how the only advice Nick chose to take was that of some fly-by-night attorney who told him to stop paying his debt in hopes Congress would change the law...yeah
LOL, you got him confused with Elizabeth Warren.
actually there IS a way.
It is called a “hardship discharge” and can discharge student loans in VERY RARE situations. It has not be out of control of the debtor and no chance of ever ever ever bouncing back. Usually some medical or industry extinction reason. (ie buggy whip maker etc)
That said,
Student loans SHOULD be dischargable and schools force to guarantee them out of their bloated endowments.
That’s a lot of money for culinary school. There are all kinds of affordable Vo-Tech schools he could have done for less than $10,000.
Culinary school? If he thought that was a good plan with well over $100k in debt, he’s probably too stupid to succeed as an engineer. Either he needs to buckle down and get a real job or a second job (I worked three jobs 40 hr, 40 hr, and 32 hr a week for two miserable consecutive summers). He’s had eight years to whine about how unfair life is, but it’s time to grow up and deal with the choices he has made.
I imagine his solution is for “the government” to rescue him from his stupid decisions. Only a liberal would think that our children should pay for other people’s mistakes. When you borrow to get an education, that is a business decision. If one chooses well, the engineering/medical/legal education will more than repay the risk taken. When a student chooses poorly, it’s not appropriate to compel those who didn’t go on to college or those who chose useful careers that justified the cost to pay for a gender/race/women’s-studies degree, for a culinary degree, or for some other degree that prepares its graduates only for a career in the food service industry.
“lawmakers have yet to allow loans to be discharged in bankruptcy.”
If people could discharge their student loans, there would be absolutely no reason to charge tuition at colleges. Higher education would be free.
The author fails to explain why I should have to foot the bill for someone to go to culinary school.
What ever happened to working a part time job while going to school ?
I waited tables, changed tapes at an automated FM radio station, and held a couple of other gigs while chasing the elusive BA...
I would not disagree with that.
In this case though it appears he was somewhere between 26 and 27 when he made the decision to quite engineering school. He was hardly a doe eyed 19 year old.
Why not finish engineering school, then if not happy go pursue his dream?
This clown spent $142,000 learning to COOK and I’m supposed to feel sorry for him??? If he was pulling decent grades in Iowa State’s engineering program, he’s not stupid. A fool, maybe, but not stupid.
My kid is smarter than that. He was “thinking” about changing schools because the major he had entered into isn’t really in-line with what he wants to study. So I pointed out that he couldn’t afford to change schools. We had just so much put aside. He had used up 1/4 of it his first year,thus burning up that portion and loosing the significant scholarship that allowed him to go to a 4 year school in the first place. This really precluded transfer to another school if he planned on doing it without taking on debt.
Well - he found a new fit in another department at his current abode, and is even excited about it. It is a “better” fit, not perfect.
It’s amazing what reality can do!
His real goal is to “get the sheep skin” and get into the work world. He is doing several extra-curricular things to build up a resume. Next summer I expect him to have an internship in his field of study - he REALLY needs too, and he agrees. Seems that is the best way to have something waiting for you when you finish your education.
2 years community college= $6,500
2 years state university = $16,000
Total= $22,500
The government has no business making loans, or making it easy to get loans. By forcing loaners to make loans cheap and easy to default on, the government makes it more difficult for people to get loans at reasonable rates.
The people who are taking loans and paying them off are also paying for all the defaulted loans.
We need to bring back the poorhouse.
I don't believe they should. The "student" entered into an agreement for a service / education. Once they get that education its okay to just not pay the loan? How about if the "student" entered into an agreement to buy a car and then decides to not make the payments on the loan? The "student" should get to keep the car?
Point is, these folks can't "give back" or have their education repo'd. It sucks for them, truly, but they as individuals freely made that choice. Now, if the lending instituitons would place a little bit more emphasis on WHO they are lending to and weighing the feasible outcomes of getting repaid, I'm betting we would see an entirely different outcome. Sadly, that will not take place until "student loans" are no longer backed by the Government (i.e., us taxpayers).
Then get a job as a chef and pay your loan back.
If you can’t, then perhaps you should kick yourself for not listening to your dad who was helping you, you idiot.
This guy seems to have problems with his dad. His dad co-signed for a loan to a real college for a year. He WANTED his dad to co-sign for the cooking school. Sounds like he didn’t plan on paying back the loan and was expecting his dad to pay them off. And I’ll bet his dad is on the hook for the loan to the real school.
Now “things turned sour” with his dad and he had to move out of the garage.
He spent money he’d saved so he could move “back west” to find work? This whole story is bull.
Bottom line is: he made is bed in the van. Now he can sleep in it.
The banks were so cruel to force this poor guy to attend colleges. They maliciously offered him loans to cover both his tuition and his living expenses! And when he started working and made no payments for 10 years, the monsters kept adding interest.
I feel so sorry for the guy.
Absolutely! And part of the scam is telling the students how "valuable" their degrees will be. I'm not the biggest fan of federal laws, but consumer protection laws should be extended to higher education.
Colleges should be required to keep, and provide, data on just how marketable their degrees are.
Then if the student still wants to gamble on a weak degree, it's his responsibility.
Bullshit! If the kid got the degree they need to pay for it, period. The ONLY reason to discharge a student loan would be if the student died or was totally disabled.
Geez the military would have taught him for free..then again he doesn't sound smart enough to qualify.
Actually, it was a total of $60,000. The rest is accrued interest. Still way too much to be a cook. He wanted a diploma from a fancy school so he could say he graduated from The Cullinary Institute for Crepe Studies.
"Higher education" wouldn't be free; it would be priced at a level where the students could pay for it as they went along with part-time work (delivering pizza, waiting on tables, painting houses in the summer, etc).
Don’t neglect the government creating the atmosphere for the massive hikes in college tuition. The “student loan bubble” is being fueled by government telling universities that :everyone should go to college” and providing cheap financing to do so. Sound familiar? Didn’t we just see this movie with housing? The colleges are simply balancing the supply/demand equation by raising prices. What I don’t know, however, is what happens when the bubble bursts...
I have a love of boozin it up, sleeping until noon and not showering and getting dressed for days on end but I knew it wasn't a growth industry so I decided to stick with the (real) sciences.
Making student loans dischargeable in bankruptcy again will instantly defund one of the Left's most nefarious schemes, put huge downward pressure on tuition rates, and smack the banksters right in their pig snouts at the same time. Couldn't happen to two nicer groups of anti-Americans. :)
Geez, I'd have taught him for $10K. Lunch included.
One can get a Class A cdl w training for about $2,500. The minimum requirement is 23 years of age, no felony convictions. In about a week of training, you can get your cdl. After srarting w a major carrier, you will be on your own in 6 weeks.
1st year trucking pays about 35k. Team drivers can easily make 50k the first year.
One can get a Class A cdl w training for about $2,500. The minimum requirement is 23 years of age, no felony convictions. In about a week of training, you can get your cdl. After srarting w a major carrier, you will be on your own in 6 weeks.
1st year trucking pays about 35k. Team drivers can easily make 50k the first year.
I'd love to see this as a platform item but it would be a net vote killer, not getter.
The independents react to "nice". This would be spun as a war on youth and education.
It's harder to demonstrate that thousands in debt, for a relatively low paying career; is not "nice".
"Nice" always wins independents, who decide things; until we can get the self loathing left to wake up.
He dropped out of engineering school when he realized they weren't teaching him how to drive a choo-choo.
I completely agree with you. Thanks to the idiot counselors at their high school, one of my children decided to be either a rock star or an actor and another pinned her hopes on being a singer. As parents, we suggested—no, DEMANDED, that they first continue to make good grades and find a way to make a living THAT WOULD SUPPORT THE LIFESTYLE THEY WANTED. After that, they were welcome to sing, dance, or whatever was decent.
Today, both are engineers with zero student loan debt. We hated to urge them to postpone their “superstar” dreams, however impractical, but now they are free and equipped to live life as they wish.
“Colleges should be required to keep, and provide, data on just how marketable their degrees are.”
The technical schools do it as well. get a MSCE and you’re guaranteed a 70k salary. Remember those commercials?
Michael: “lawmakers have yet to allow loans to be discharged in bankruptcy.”
Psycho: If people could discharge their student loans, there would be absolutely no reason to charge tuition at colleges. Higher education would be free.
Me: If people could discharge their student loans, in the near term a lot of lenders (not the schools) would be left holding the bag.
In the longer term, assuming that the gubmint no longer uses our money to make the lenders whole for these defaults, the surviving lenders will eventually get the idea that they should make more sensible loans, and no longer conspire with the ripoff trade schools. It would probably drive down the cost of both university and tradeschool education, which (as we all know) have been the engine driving up costs and tuitions over the past generation at least.
I got a parity error on that, but I was able to hit the red reset button and finish the sentence.
≤}B^)
ps. I do knowwhatchamean.
My part time jobs helped in other ways.
The restaurant always had left over salad and sandwiches. Sometimes the wrong topping resulted in a pizza being sent back to the kitchen (oops.)
The radio station was a good quiet place to study with hourly breaks to change the big reels of tape.
I had just over $1,000 in my checking account when I graduated. It’s hard for me to believe some of these $100,000 debt stories.
What’s wrong with these people ?
***years community college= $6,500
2 years state university = $16,000***
But what if you transfer to a 4 year university after two years of community college?
After two years of community college, using the same teachers and textbooks as the state university uses, students often find that their community college courses do not count toward graduation by the state U and they have to take them over again.
My daughter fell into that trap.
Well put, Mista Jeeves. I was making, I think, the same point in my #38, but you probably said it better.
Four year State Universities encourage kids to ignore their parents and take courses to prepare for nonexistent careers. Over half of recent college graduates are not getting any benefits from their education and are either living at home and not working or working at $10 per hour type jobs with limited hours, no benefits and no career path. Everyone is lying to young people and their parents. Politicians, bureaucrats, “educators”, counselors etc.
High School has been dumbed down, college has been dumbed down. Young people are lied to and confused. They have no plans for adult responsibility. They just want to live with mom and dad and have someone else support them.
student loans were dischargable in bankruptcy.
The problem is that non-dischargability has created a “worthless degree” industry.
What is needed is a non-dischargability window. If after 5 years there is no viable job openings, THEN loans become dischargable.
Remember some states offer STUDENT LOAN forgivness programs for every year you work in the government.
This would also be a way to deal with runaway university costs. Since universities have no risk for basket weaving degrees, they can charge as much as possible based on just issuing a degree.
If he let the loans go into default, then they can easily triple the loan amount through penalities. This is probably how it got to 142K.
He may be stupid but this is Usury and immoral.
He should still have to pay the original loan off with reasonable interest.
If the guy had finished up his engineering degree at Iowa State, he could have named his own rate of pay in many locations.
The university should bear the risk for allowing worthless degrees.
The universities should not be safe in the ivory tower from ecconomic reality.
The universities are protected via non-dischargability. This makes them free to sell snake oil claims as to the value of “their” degree. (this is why students are suing universities)
universities were a place to become well rounded, then they became a place for meal tickeets, now they are a baby sitting service for the immature (and that includes the professors)
Your analogy fails because you can’t take back an education (loosly defined). A degree means a GOOD job. Just look at any college brochure. All make the “grads make more” claims.
Perhaps we should look at shutting down a few universities and pointless grad schools.
This would make sense if the debt were dischargeable to the university that awarded the worthless degree. Otherwise, it would further incentivize students to major in (and universities to offer) worthless degree programs.
I think a lot of it is the parents. My generation (and the ones before it) are somewhat gullible because we came from a time when a college degree (ANY degree that time) actually meant something. It really did mean a better job, higher wages and a better standard of living. It set you apart.
We parents are still buying into it even though we’re living in a time when EVERYONE is getting a degree of some kind. We even send them to school to learn a trade that would previously been learned on the job. When they get out, they start at the same place they would have started without trade school... the bottom. But with student loans and no experience.
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