Posted on 06/01/2010 4:44:02 PM PDT by jerry557
Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.
Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she's been enrolled in night school, which allows her to defer loan payments.
This is not a long-term solution, because the interest on the loans continues to pile up. So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning. They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up.
Meanwhile, universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday — just like the mortgage lenders who didn't ask borrowers to verify their incomes.
Ms. Munna does not want to walk away from her loans in the same way many mortgage holders are. It would be difficult in any event because federal bankruptcy law makes it nearly impossible to discharge student loan debts. But unless she manages to improve her income quickly, she doesn't have a lot of good options for digging out.
(Excerpt) Read more at finance.yahoo.com ...
I worked in debt collections a couple of years ago. A big company, I worked on some of the big student loan accounts. I can't tell you the whole picture from that, because by the time we got an account it was in outside collections. That's a later stage of the being behind in payments cycle. But I can tell you there are a LOT of young kids just a few years out of college in collections. And way too many get garnisheed. They literally live on a few hundred dollars above the table a month, after the garnishment. You try that.
USAToday article from 2006:
Nearly half of twentysomethings have stopped paying a debt, forcing lenders to "charge off" the debt and sell it to a collection agency, or had cars repossessed or sought bankruptcy protection.I suspect that you are wrong, WAY wrong when you say that "Most students have used good judgment when taking out student loans and most pay back what they owe." I know a lot of kids in there twentysomethings, and that is NOT the case.
NONE of them understood fully, or close to fully the weight of the loans they were taking on. Just as your model of the actual condition is, imo, way off and even delusional because of abject ignorance -- not knowing what you do not know -- so too was theirs when they signed up for the loans.
Most of the ones I know are making a good faith and earnest effort to repay the loans. But I already know that in a few years a significant number will have encountered some economic upset -- sickness, injury, loss of job -- that they will not be able to recover an honest hope of paying back what are for some ridiculously high debt burdens for the field they are in.
It's just the kind of thing my very old school Scottish Bank Examiner, and trainer of examiners, left the trade because of. That the lenders had abandoned any semblance of due diligence in making loans. He died seven years ago in his late nineties, he had worked long into his seventies.
Old school bank loans were HARD to get. But that difficulty meant nearly all were repaid, and the borrowers and the bank both were enriched and happy. He'd NEVER had lent 50,000 to train a woman to be a Kindergarten teacher, or such similar follies of modern 'higher ed'.
And those claims of that kind of lifetime difference in earnings are bogus, and rapidly becoming more bogus every day as the economy hollows out.
It’s really really hard not to come off as condescending with some people.
Look, my rule with Freepers is that every last one of us is a person far more intelligent and savvy than just about anyone else in this crazy world and that includes you, of course.
Still, as you can tell, I object strongly to your stated views in this matter. The reasons are given in the posts I have made on this thread.
You got that right. But this young woman and the other saps like her are still stuck with that debt while the well paid professors,school administrators and money lenders continue to rake in the dough for selling an inferior product with their bogus claims.
I repeat that most of the borrowers are making their required student loan payments but, just like a minority of homeowners, there are some who have knowlingly borrowed way too much for an education that is of little real value. In that case, you work two fulltime jobs if necessary and live at the parents home, if possible, to pay down the debt so that it is manageable to the point you can leave one of the fulltime jobs. These excuses as to who is responsible does not pay the bills.
So, we agree to disagree. The University Industrial Complex is a big ripoff these days for many, that I agree.
>>Still, as you can tell, I object strongly to your stated views in this matter. The reasons are given in the posts I have made on this thread.<<
Sorry, FRiend — you have yet to explain how abdication of personal responsibility is the fault of anyone except the individual.
You just provided some boilerplate blaming “the man” for other people’s choices.
Like I said, it isn’t condescending to me — it is condescending to an entire generation who need someone like you to think for them.
>>Her BA was not a ticket to higher lifetime earnings, it was a ticket to lifetime debt slavery.<<
It is called choosing. We all do it. Sometimes it comes out well, sometimes not.
The government, and both public and private colleges are brainwashing kids and parents from an early age to believe that it makes sense to invest heavily in “college”. The government gives special tax treatment to student loans, regardless of what sort of studies they’re used for — just has to be on the government’s list of “eligible” schools, and that includes all sorts of worthless schools and worthless programs of study. Poorly educated people have no clue what sort of college is worthwhile and what sort isn’t, and both high school and college counselors are always happy to point to examples of people who majored in some fluff humanities field and went on to have great careers — leaving out the part about the Ivy League college, the subsequent top 5 law school or business school, and the well-connected parents.
If you add government policies of 'diarrhea-easy' money, the general Sodom-like social tolerance for sheperds willing to throwing the prey to the wolves and the horrendous basic skills math education in public schools -- we can agree.
And those ARE the things that must be fixed, go forward.
Yet, the big voting bloc of the young overburdened with student debt allows every Marxist and pansy-waisted politician to make a political promise to reduce or eliminate student debt and garner mega votes. For the young, it is a well known issue, an easy and sure vote getter.
The lenders and schools have become rapacious thieves by fraud — that is NOT ‘blaming the man’ — that is one the men — ME — speaking to the ‘way it be’ bro’.
THAT massive theft of the innocent and young by systemic fraud is a far great irresponsible act than any a greenhorn tenderfoot of the road of life makes at 18.01 years of age to sign on for mega debt.
Yes, she chose to buy the product with borrowed money. But the product is not as advertised and sold to her using fraudulent advertising. Unfortunately, there is no way for her to return the fraudulent product to the University and get her money back.
I’m not saying she isn’t responsible and shouldn’t pay her debt. I’m saying the educational establishment is engaged in fraud and that fact needs to be publicized far and wide so that fewer young people get taken to the cleaners.
The collusion between colleges and lenders has created an “education” bubble of worthless degrees and a mountain of debt. What’s going to happen when that bubble bursts and they starting walking away from their student loans like people are walking away from their upside down mortgages?
Not that I wish to defend the morons who are willing marks for the financing hustlers,,,, but..... What he said!
who is “we” Tonto? This girl-woman sounds like an overindulged spoiled princess and her mother was at fault, not “we”
Her father died when she was 13, so she probably got a social security check every month for 5 years or more. That could have paid her way though college, handily. But I’m gonna bet it bought Mom’s B&B (talk about a hobby income)
My dad died when I was 5, I was the oldest of 3, my mother was 29 and pregnant. She put 3 kids throgh college with no student debt. Period. She used saved social security checks to pay for our education and worked night shift and private duty nursing jobs to put food on the table..
Oh and she also got a college degree when the baby started kindergarten, took her 8 years of night school but she then taught school long enough to retire with a pension.
Don’t tell me about the greedy older generation and how plush they had it, and how “we” duped this whining loser into spending $100K on a fluffer nutter degree.
Listen to Dave Ramsey show for a while, you will hear what people are able to do about their debts when they are willing.
>>Yes, she chose to buy the product with borrowed money. But the product is not as advertised and sold to her using fraudulent advertising. <<
She paid for a college education — she got a college education. I still don’t understand what you are saying.
As far as returning it, try returning a meal you ate and then decided you didn’t like.
>>The collusion between colleges and lenders has created an “education” bubble of worthless degrees and a mountain of debt. <<
Plenty of college degrees have great value. “Womyn’s studies” isn’t one of them.
>>And way too many get garnisheed. They literally live on a few hundred dollars above the table a month, after the garnishment. You try that.<<
I see what is going on here. Sort of a combination of Survivor’s Guilt and kind of a reverse Stockholm Syndrome.
I love Dave Ramsey, and his advice is truly martial arts top sensei level debt-wise.
But these few of these kids are fighters, instead the system is turning them into meek sheep on the plantation a new Statist but State-less Elite. That’s what the burden of debt usually does to people. Crushes them into ‘islam’ — that arabic word meaning ‘submission’. Marxism and the religion of hard Islam are becoming more prevalent among the young.
Unfortunately the young that can be rescued by a Dave Ramsey are few. That’s what human history tells us.
I also considered that, and hopefully have discounted it.
It’s government giving money to government with students exploited as the medium. College can be a lot cheaper - offer fewer more employable degrees, don’t admit idiots, and make a degree actually signify substantial academic achievement.
Right now, higher ed is just a money mill with the end result being a piece of paper almost as worthless as one of Obama’s greenbacks.
>>I also considered that, and hopefully have discounted it.<<
I would suggest a 1/2 off sale.
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