Woman wracked up $311K in debt for 3 degrees — and she’s now stuck

https://www.yahoo.com/finance/news/collecting-degrees-thermometer-atlanta-woman-110000419.html

I think IT Degree, usually if employed in the field, provides opportunities to have good earning and ROI.
It requires staying current and be employed in the field. Law degree and practice, depends, like others, on the field, area of practice and type of employer among others. As an associate, attorney
my son really found him self at his third employer in a very different field of practice.

 

I wonder why she's deep deep deep in debt!

 

Helen didn't suddenly wake up one day saddled with $311,000 in debt. It took her years to dig that hole. Another intelligent person, well able to deal with numbers - completely blinded, by her emotions and psychological makeup - and worst of all, an easy-credit loan system, that operates in the same predatory fashion as, but with much higher numbers, than the rent-to-own stores and payday loan shops that infest poor neighbourhoods.

I don't know what to tell her, that she would actually do - or would really do her much good. I'd have some choice words for the people that lent her $311,000, though.

 

"Ramsey recognizes this but argues that “it’s less depressing dealing with litigation than it is dealing with $311,000 in student loan debt.”

How the hell would HE know?

 

The thing that baffles me is the high amounts of these loans that are advanced for living expenses. When I worked in consumer lending - it was axiomatic that loan people did NOT lend anyone money for living expenses. Common sense: if someone can't pay their basic living expenses as they occur -- how are they going to pay credit obligations?

I'd be open to lifting that, for medical school. But that's about it.

 

Yes - it IS common, to get into debt. But this is different. $311,000? That's not common - it's UNREAL! This is not a simple case of "fudging" or "fuhgeddingabout" the budget. An outlier event like this has the potentially serious overtones of an underlying mental illness.

A psychosis is defined as "a serious break with reality." I think $311,000 of borrowing in this case qualifies as a "serious break with reality.." This person did NOT slip and fall. She methodically and diligently dug a wide hole, many feet deep, descended a rope ladder to the bottom, and deliberately pulled it down after her. She could have, and should have, been protected against her own downfall.

That is very possibly not the act of a mentally well person. I see the people who helped her dig, the lenders. as enablers here.
They knew what would happen - and lent the money anyway, because THEY were safe - the debt could never be forgiven - by law. She could get into the hole and never get out, without paying $311,000. They knowingly HANDED her the shovel. Not one of the lenders said "No. It doesn't add up. This is not a good idea." Not one. No ethics whatsoever.

 

$311,000 does sound like a lot. She must have been using loans for at least some living expenses. For my living expenses, I worked part time at a restaurant and received a total of $1000 from my parents. I had a scholarship that covered tuition for my first year at Berkeley. I only used a loan for one year of tuition, about $3000. I had to pay $34.83 per month to pay it off.

 

Based on those figures, if your loan had been $311,000, your payments would have been about $3,610.71 a month. That would have stopped you, right, Bill? It should have stopped anyone! Even spread over a couple of generations, for a lower monthly nut (and insanely high total interest.)

 

Do you think, if they told her the monthly payments needed for the $300K+ loan would be just shy of $4000 per month, that she would have stopped and reassessed?

 

IF they told her that --- yes. News like that would have made me dead! But -- did they? We will never know.

 

Doesn't really matter. About $1,814 a month would be required just to pay interest, at 7% p.a. without EVER paying a cent on the principal. I could have figured that in Grade 8. With 3 degrees, I assume Helen is a high IQ person. She could have worked that out quicker than I can.

What she did defies rational explanation. I'm not a psychiatrist. I only have 18 units in undergrad psychology. So I can't even offer an irrational explanation, for either:

(1) Why the loan people ever made the offer. Doing so is unethical.
(2) Why Helen would accept it.

It's a crazy world, out there! First, people are made poor. Then they are eaten, by the unscrupulous.

 

I would be surprised if anyone told her what the payment would be ahead of time, unless she asked. I don't think I found out my payment would be $34.83 until I had to start paying back the loan.

I have to assume that she was using the money for living expenses as well as well as for tuition. She must have not given it much thought. Just thinking that once she graduates and gets a high paying job then she would be able to afford to pay it off. It isn't having your cake and eating it too. It's more like eating your cake before you've even gotten your cake.

 

Right. Mental image of cake = loss of all reason. Gotta have that cake! At any cost! Yeah, people do that - in a variety of ways.
It's often their downfall. Just another garden-variety addiction I guess. Thanks. I should have spotted that,
Just addict-and-dealer, at that stage. The dealer should be sent down. 7-10 years would be about right, I think.

 

Not unknown for law graduates to top 300 large. Interest piles up during deferral periods.

I know a JD/MD/MBA who does law instead of medicine. Don't know why though. I never thought I'd like to be a doctor so I never attempted med school. Apparently some don't find out they hate it until too late.

 

This is a really bad example of someone who is overeducated but underemployed. It's also a really bad example of college not "giving you a leg up." This is an individual with seriously bad judgement. Almost every story I read about someone who is WAY in over their head with student loan debt made a LOT of poor choices in their pursuit of a college degree. Everything from not finishing the degree they started, to borrowing money and gambling it away, to choosing schools that were ridiculously expensive. Yes, the system is messed up, but come on.

 

One serious mistake many law students make is to go to the the highest ranked school (by USNWR) they get into instead of going to the cheapest. Prestige counts in only a very few situations such as wanting to teach, looking for a Big Law job, or hoping for a higher level position in the federal service.

The problem is that ranking generally is irrelevant even for these goals unless you manage to get into one of five or six schools. Few do.

 

You never know the dynamics of what goes on between two people in this, or many other situations, but I'm wondering, where was Helen's husband in all of this? At first I thought "Gee, the guy must be a saint, to put up with all of this." Then I re-thought. Maybe no saint. There was no intervention back when one was first needed. Maybe Helen had help - a built-in enabler? Then I thought again.

Doesn't matter - it is what it is. I've seen addict / enabler before. It's never pretty. NO relationship of any kind with an addict is. Not finger-pointing. People in such a relationship sometimes just throw up their hands. They have to, or go crazy. They're not doing anything wrong. Seen it all before.

 

I still think the (loan) dealer should go down for 7 to 10, though. Or at least something. Maybe some punishment patterned after Allen Weisselberg's, He is the Trump Organization's ex-finance chief. Maybe Helen's dealer should get five months in Riker's Island, as Mr. W. did - and be banned from any position, ANYWHERE, involving the granting of loans - for life. Sounds about right.

 

Well, the creditors aren't necessarily expecting them to pay... the government guarantees the loans. If nothing else, the students could spend ten years working in public service and get loan forgiveness.