Dealing with Unpayable Student Loans

Discussion in 'General Distance Learning Discussions' started by zanger, Aug 8, 2010.

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  1. zanger

    zanger member

    Student loans are a form of corruption and fraud. These colleges are tricking children as young as 16 into taking these loans. Rates are often best called usury. Because the banks and colleges paid off congress, it is impossible to declare bankruptcy for practical purposes. It always gives me a laugh when I come across a college grad working in a minimum wage job, whose paycheck is being garnished. It would of been better if they never went to college. College often puts people back financially, colleges have become a drag on the whole economy.

    If you get to the point where it is impossible to pay, here are some possibilities.
    1. Run the loans to the max, once they reach an unpayable size, what is the difference?
    2. Leave the country. Try tax-free United Arab Emirates.
    3. Get a huge number of credit cards, only use a little bit, pay back at the end of the month. Get huge limits, then pay off your student loans with credit cards. Then bankruptcy. See a lawyer first.

    Going to the max with the loans will make you more employable. Perhaps you have a degree in Sex Studies, you have to fund another degree some way since your first one is worthless.

    Leaving the country is an option if you have a specific job skill such as accountant. The United Arab Emirates is an option, but they will never make you a citizen, but you will get paid more than the US since the US is going downhill.

    It is totally morally justified to pay your student loans off with credit cards then go into bankruptcy, it is the same banks that are tricking 17 year olds to take the student loans out to begin with. Check out the ad below that tells teens student loans help them succeed in life.

    [​IMG]

    This is an ad from a bank. From http://www.loantolearn.com/
    [​IMG]
     
  2. rickyjo

    rickyjo New Member

    Down with the Man! *rage fist*

    Option three is probably your best bet, it's a bit objectionable, but in the end...I'm afraid it's a bit of a case of us vs. them. I can strongly sympathize with your point of view.
     
  3. JBjunior

    JBjunior Active Member

    Regardless of what happened to put someone in that position, take personal responsibility and get it taken care of. You got a product/service for the money you borrowed and now that you have that product/service (one that can't be taken back, education) you decide that you now have the option not to pay. Sounds as dishonest as those who made the loans to begin with.

    There are always options, the Army will pay off a ton of student loans as well. Regardless of your opinion on joining the military, there are always options.


    Disclaimer: I don't have any student loan debt and the military is now paying for me to get my MA.
     
  4. CalDog

    CalDog New Member

    It's true that the military has student loan repayment programs. But only for public loans up to $60,000 -- not private loans.

    The problem with private student loans is that options really are almost nonexistent. Bankruptcy is not an option. Repossession is not an option. Repayment, for many, is not an option -- they simply can't find work that pays sufficiently well to get out from under their debt, even with their expensive degrees.

    So what does that leave? Exile from the country, or suicide. The use of credit cards is a new idea to me -- swap your student loan debt (which cannot be discharged in bankruptcy) for credit card debt (which can be). Not recommending this strategy, but I can see how it might theoretically work.

    Sure, borrowers need to be more responsible. But what about the lenders? The only reason that lenders are prepared to loan 100,000+ to a fine arts major is because they know that the borrower can't default. If the lenders had to take some responsibility for the risk of default -- as the borrower is supposed to do -- then these unreasonable loans would stop overnight.
     
  5. Randell1234

    Randell1234 Moderator

    My wife took out a student loan in the early 90's. We ignored it for a long time (I know it is wrong) because we just did not have the money. When we finally got on our feet we paid back the $3,500 loan that cost us $11,000 with penalty and interest. Why - because it is the right thing to do.
     
  6. cookderosa

    cookderosa Resident Chef



    OMG I just thought of a perfect idea- someone should open a business doing risk analysis for banks/lenders based on degree sought. Oh wait, you're right! It doesn't matter, there is no risk. (ding*ding*ding) That's not an accident.

    I remember being told to "follow my passion" and "do what you love" and "happiness is the most important thing" blah blah blah. What bad advice I was given!! I'm such a buzz kill for my kids, I NEVER say that. Do you think the farmers, coal miners, and railroad workers were following their passion? No, they were earning a living. The idea of "finding happiness" as an employee escapes me.

    I think the downside of living in a country with a "do what it takes" philosophy is that when you cross it with our inflated infatuation with college - you get debt.
     
  7. JBjunior

    JBjunior Active Member

    I had quite a few things that popped up on my credit from the time I was 17-19. As soon as I had a job I took care of every one of them from $80 up to quite a few thousand. It sucks taking responsibility but is part of being an adult.
     
  8. b4cz28

    b4cz28 New Member

    The US government and the loan companies are some a** holes though. They have Zero flexibility. We keep talking about this issue and how people need to take personal responsibility, but were talking about 17 and 18 years olds right people. Kid's who can't even drink beer, and have no concept of the real world and we load them up with $100,000 in debt? Not fair at all.
     
  9. -kevin-

    -kevin- Resident Redneck

    so these same folks should be allowed to vote and affect the US at every level but shouldn't be held responsible for taking out a loan because of their age? We allow individuals at 15, 16 to operate vehicles on the roads with the responsibility for other's lives but they can't be trusted to make a decision on a loan as they get older? Individuals these same ages make life or death decisions every day in the military but we shouldn't hold them responsible for a loan? Sorry, but the argument for age doesn't hold water in this discussion, these individuals cannot have the liberties and freedom to make decisions without shouldering the consequences of those decisions.
     
  10. CalDog

    CalDog New Member

    OK, so we know how you feel about student loan borrowers.

    Now, do you think that the same standard should apply to student loan lenders? The lenders are free to make irresponsible decisions without "shouldering the consequences", because with student loans (unlike other types of credit) there is no risk of default.

    If a graduate doesn't make enough money to pay back the loan in full, then the lenders will still get it eventually. They can just wait until the graduate starts collecting Social Security, and take it out then. So the lenders can, in effect, count on the government to bail them out -- even if they offer ridiculous loans that they know are unlikely to be repaid during a graduate's working career.

    It takes two parties to make a ridiculous loan -- one to borrow, but also one to lend. The loans happen precisely because the lenders are absolved of any responsibility -- they don't have "shoulder the consequences". Even if the borrower can never pay them back, they know that they will get payback from the government.

    If the lenders faced a real risk of default from bankrupt borrowers (as was once the case), their lending policies would become very rational very quickly.
     
  11. -kevin-

    -kevin- Resident Redneck


    I agree with your sentiments regarding lenders. Really bad policy all around.
     
  12. Ian Anderson

    Ian Anderson Active Member


    A little of topic but I predict the UAE will crumble in the near future. India is expected to replace China within 25 years.
     
  13. b4cz28

    b4cz28 New Member

    I agree with that, if India can fight off Islam than they will be a super power in the near future. Islam seems to be a religion that makes ambition go away, I’m no expert just saying it seems to stifle any new thinking that does not fit the mold.
     
  14. TMW2009

    TMW2009 New Member

    Maybe fundementalist members of Islam have given you that view, but I can't agree with it... Especially if you look at things like this...
     
  15. b4cz28

    b4cz28 New Member

    Sure......I don't look at BS like that. I look at the countries where it is practiced and the views their governments hold, fundamentalist Islam is all Islam, no matter what people say. I respect no religion that treats women the way they do. Islam is an attractive religion and culture to men across the world because of the benefits it holds for them. Women on the other hand should be rioting in the streets at any threat of the region entering and taking over a country where they reside.

    Sorry for the thread jacking, I’m done.
     
  16. mcjon77

    mcjon77 Member

    Essentially, we have 2 choices:
    1) no-default student loans, and banks will give you money for ANY kind of degree.
    2) student loans that can be released through bankruptcy, and banks will be VERY careful regarding what types of degrees they will fund.

    In many ways, this is directly related to MichealOliver's thread concerning the ROI of an Aspen degree or some other PhD. I can imagine that if one could default on student loans, there would be FAR FEWER students at certain schools. Banks would run the numbers just like prospective students should and would determine that some degrees just don't make economic sense.

    I guarantee you that as soon as the law was changed there would be people on this and other forums complaining about how no bank will finance their dream of getting a PhD in candle-making, or interpretive dance.
     
  17. TMW2009

    TMW2009 New Member

    Yes... Anything you don't like is automatically BS. Recorded history, facts, all BS ... How very enlightened of you... Sure does make you better than those darn islamic people. <shakes head>

    Back to the thread at hand...

    I agree with MCJon's assessment.

    Certain degree areas would become 'approved' degrees... The lenders might be more likely to approve a loan for a degree for someone with bad/moderate credit if it has enough merit over one that they feel might not... IE a Business degree over a LA Degree in Peruvian Music and Dance, or something like that. Schools would start advertising the 'approved' degree programs as a draw.

    But on the other side of things, there are many b&m schools that provide tuition coverage and even stipends for their doctoral students from monies in their department especially for research areas that could bring in more grants.

    For-Profit schools would shrivel and possibly die from this situation. But it would solve the agressive recruiting issues that they've been having.
     
  18. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Well, they're doing a really terrible job at this. For example, three of the twelve presidents of India have been Muslims.

    Anyway, I think India's being held back more by a cultural inclination toward bureaucracy and a political tendency toward socialist economic policies than they are by their large Muslim minority. But still, slowly but surely I think they're restoring the world leadership position they held centuries ago.

    -=Steve=-
     
  19. zanger

    zanger member

    Some people here have a fanciful viewpoint on the student loan crisis. Many of these people started accumulating students loans when they were 16. If a person gets into financial problems and does not pay there is a huge penalty, then interest. Many end up with loans over $100,000 that become impossible to pay. People end up in permanent garnishment paying back double, and being even more in debt.

    To "I paid back because that was what was right" my response is, you have a strange sense of right and wrong.

    As you can see from this graph, the whole system will eventually collapse like the mortgages.
    [​IMG]

    These colleges and banks remind me of the evil fox in Pinocchio tricking children.
    [​IMG]
     
  20. zanger

    zanger member

    Colleges can take your degree back, see the thread about colleges that rescind degrees.
     

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