3 ms·

Student loans turn into crushing burden for unwary borrowers

8 points by pg 18y ago

Tangurena 18y ago
Fortunately, none of my student loans are "private" ones as mentioned in the article. I am cutting back on expenses to pay off my federal ones early, primarly because student loans can't be discharged in bankruptcy, and I think that things are going to get really bad by the end of 2009. If you're unemployed, a chapter 7 bk is feasible, but very hard to get if employed. And the way that the "reform" was passed a couple years back, less and less chapter 13s are actually getting discharged at all.
tokenadult 18y ago
"Most students have little experience in taking out loans, yet the federal government doesn't require lenders to disclose the total cost of a student loan and other terms upfront -- before signing -- as it does for car loans and mortgages." That's unconscionable, as the examples given later in the article make clear.
gamble 18y ago
$140,000 for a BA in photography? Good luck paying that off...
quoderat 18y ago
I wonder how these people spend so much for school, especially for low-payoff degrees like photography. Sure, follow your passions and all that, but don't spend $140,000 for a photography BA. If you love photography, go out and take photos. (Said as an avid photographer.) My girlfriend recently graduated with a CS degree from a state university with only $10,000 in student loans, all already paid off. It can be done.
pmorici 18y ago
How does someone living "frugally" on Ramen rack-up 140,000 in loan debt? Thats $35,000 per year!
- gojomo 18y ago
  A 2004 forum post reported the tuition alone at Brooks Institute around $20K/year. So 35K/year means only $15K/year in non-tuition living expenses. And Santa Barbara is not an especially cheap area in which to live. But also: seems like Brooks Institute has been accused of exaggerating the post-graduation earnings its graduates can accept. See... http://ddunleavy.typepad.com/the_big_picture/2005/07/investigation_c.html http://ddunleavy.typepad.com/the_big_picture/2005/07/investi...
  - rsheridan6 18y ago
    That's typical of trade schools, at least. Watch daytime TV and you will be inundated with commercials for expensive but worthless degrees for private schools. My solution - make it easy to declare bankruptcy for student loans, but institute a student "dividend" program where, instead of getting loans, institutions get a percentage of the student's future earnings above a level which would be considered average for someone with the credentials that the student has before enrolling. Lenders then wouldn't get paid back for loans for rip-off schools, so they wouldn't make the loans, so the schools would have to change or close.
Tichy 18y ago
It enrages me a little that schools don't provide much of an education about finances, or generally on the basics of keeping a life (nutrition as another example). Maybe it is too much of a conspiracy theory, but I wonder if the reason is that schools exist for the benefits of the corporations that are looking for employees, rather than for the benefits of the pupils (a ka "learning for life" is bullshit, it is really "learning to be a good worker drone").
- apsurd 18y ago
  But that's EXACTLY why the education system was created in the first place... literally to produce workers competent enough to work in factories, during the industrial revolution. I would not call this conspiracy theory at all, it is Capitalism in action. Schools are essential to the Capitalism engine, not for enlightenment, but to produce and maintain a consistent flow of jobs, industries, and commerce. Note I am actually a fan of Capitalism. Though a prerequisite here is to learn the rules of the game (to optimize personal success in a capitalistic society), and apply them accordingly... a task that as you point out, should be, but is not taught.

8 points by pg 18y ago

Fortunately, none of my student loans are "private" ones as mentioned in the article. I am cutting back on expenses to pay off my federal ones early, primarly because student loans can't be discharged in bankruptcy, and I think that things are going to get really bad by the end of 2009. If you're unemployed, a chapter 7 bk is feasible, but very hard to get if employed. And the way that the "reform" was passed a couple years back, less and less chapter 13s are actually getting discharged at all.

tokenadult 18y ago

"Most students have little experience in taking out loans, yet the federal government doesn't require lenders to disclose the total cost of a student loan and other terms upfront -- before signing -- as it does for car loans and mortgages." That's unconscionable, as the examples given later in the article make clear.

gamble 18y ago

$140,000 for a BA in photography? Good luck paying that off...

quoderat 18y ago

I wonder how these people spend so much for school, especially for low-payoff degrees like photography. Sure, follow your passions and all that, but don't spend $140,000 for a photography BA. If you love photography, go out and take photos. (Said as an avid photographer.) My girlfriend recently graduated with a CS degree from a state university with only $10,000 in student loans, all already paid off. It can be done.

pmorici 18y ago

How does someone living "frugally" on Ramen rack-up 140,000 in loan debt? Thats $35,000 per year!

gojomo 18y ago
A 2004 forum post reported the tuition alone at Brooks Institute around $20K/year. So 35K/year means only $15K/year in non-tuition living expenses. And Santa Barbara is not an especially cheap area in which to live. But also: seems like Brooks Institute has been accused of exaggerating the post-graduation earnings its graduates can accept. See... http://ddunleavy.typepad.com/the_big_picture/2005/07/investigation_c.html http://ddunleavy.typepad.com/the_big_picture/2005/07/investi...
- rsheridan6 18y ago
  That's typical of trade schools, at least. Watch daytime TV and you will be inundated with commercials for expensive but worthless degrees for private schools. My solution - make it easy to declare bankruptcy for student loans, but institute a student "dividend" program where, instead of getting loans, institutions get a percentage of the student's future earnings above a level which would be considered average for someone with the credentials that the student has before enrolling. Lenders then wouldn't get paid back for loans for rip-off schools, so they wouldn't make the loans, so the schools would have to change or close.

Tichy 18y ago

It enrages me a little that schools don't provide much of an education about finances, or generally on the basics of keeping a life (nutrition as another example). Maybe it is too much of a conspiracy theory, but I wonder if the reason is that schools exist for the benefits of the corporations that are looking for employees, rather than for the benefits of the pupils (a ka "learning for life" is bullshit, it is really "learning to be a good worker drone").

apsurd 18y ago
But that's EXACTLY why the education system was created in the first place... literally to produce workers competent enough to work in factories, during the industrial revolution. I would not call this conspiracy theory at all, it is Capitalism in action. Schools are essential to the Capitalism engine, not for enlightenment, but to produce and maintain a consistent flow of jobs, industries, and commerce. Note I am actually a fan of Capitalism. Though a prerequisite here is to learn the rules of the game (to optimize personal success in a capitalistic society), and apply them accordingly... a task that as you point out, should be, but is not taught.