5/1/12

Came across occupystudentdebt.com. Holy sh*t there are some scary stories on that site. I pulled this one out because this is one of those cases where I think the borrower is just a total moron. What do you guys think?

Well, here it goes. This story is extremely embarrassing but this is the start of my fight to try and do something about it.

In 2000, when I was 18 years old after graduating high school, I started going to a local university to earn a 4 year degree in Elementary Education. My mother worked for the University and I had free tuition for the first 4 years. I was excited for my future, with a lot of hopes and dreams. However, growing up my parents and family always struggled with money. I had no help and was on my own with all other expenses besides tuition. I worked a part time job all throughout college and it was hard for me to keep up with both working and school full time. In 2003, I was diagnosed with pretty bad anxiety...mostly over money issues. My family doctor put me on anxiety medication, "Effexor". I experienced rather strange symptoms from this medication which seemed minor so I didn't think anything of it at first. At the same time I came across advertisement for Sallie Mae. I thought it was a perfect solution for my money troubles. I applied and was approved for a $30,000 loan at an alarming 9.5% interest rate. And I must note I was approved for that loan EVEN though at the time I did have free tuition. But being only 20 years old I had no idea what I was getting myself into. I was so happy and excited though because I felt a huge stress relief. The money would help me get through school, buy that computer I needed, pay for my gas, my car payment, etc. It relieved a ton of stress. My intention was only to take out one loan. However being young and stupid, and not knowing a thing about money and finances, that money quickly ran out. I used the money for everything, including clothes, going out to eat, EVERYTHING you name it. And oh how easy it was to just contact Sallie Mae and get one loan right after the other. They kept approving me for loans until after the course of 3 years or so, my loan debt reached a large sum of $120,00!!! As I was taking out all of those loans and spending that money foolishly on all kinds of things...it felt so good. Sallie Mae was my savior. I was able to live the high life I never had growing up because they were there for me to support it.

In 2006 my life turned upside down. I had not graduated yet. I switched majors again due to poor choices I made. But I also started feeling the pressures of having to pay back such a huge loan I wasn't exactly in a rush to graduate. The longer I stayed in school the better I thought because it would give me more time to start paying the loans back. So I decided to take my time to graduate. I even started going to school part time to purposely delay it. And then somewhere in there reality sank in. My nightmare began. Many things happened in my personal life which I won't get into but I tried committing suicide and ended up in a mental hospital for 4 days. I was diagnosed with bipolar disorder. It was discovered that the medicine I was taking for anxiety caused me to have manic episodes over the course of all those years (it is embarrassing) That is WHY I racked up all that debt and made very poor choices. I wasn't thinking clearly. My mind was foggy. But regardless of myself being manic or not at the time, it is so easy for any young kid at 18, 19, 20, 21 years old to get themselves in debt. Unless you have parents who really taught you the importance of money and saving, etc., you are naive to the devastating consequences getting yourself into debt can have on your future. It is easy for any young kid who is NOT manic to take out those loans and not understand the implications they will have on the rest of their lives. Personally, I didn't even understand the meaning of "interest". I didn't understand when I signed for those loans that after 6-7 years my initial $120,00 would turn into $250,000. It more than doubled!

Eventually in May of 2011 I finally graduated with a bachelors in criminal justice. I am now a divorced single mother (my large debt load was a major factor in my divorce) clearing $2000 a month on a $34,500 a year income. I am working in retail management because that is all I could find in this economy. I am still searching for better jobs but it's been a challenge. I have a 4 year old daughter. Right now I can barely afford to survive off of what I make. When my $2500 loan payment kicks in this November I don't know what I am going to do. Even making interest only payment my monthly payment will still be $1600 a month. And there is NOTHING I can do to get rid of it. NOTHING. I prey every day that the laws will change so I can declare bankruptcy. I would do it in a heart beat. I am scared for my life and for my daughters life If it wasn't for my daughter I'd rather be dead right now....I feel so hopeless.

I am SOOO angry. I blame Sallie Mae for everything . What they did to me was called predatory lending without a doubt. A 20 year old still in school should NEVER be approved for a $30,00 loan just because they are a student. It's insane. An adult with good established credit has a harder time getting approved for a personal loan of that size. Half of the time I was getting these large loans I was only taking ONE or TWO classes. The tuition being $4000 at most. And at the time I actually thought they were helping me. Now that I am 29 years old I know better and I am disgusted that the government supports these monsters. I know there are so many people out there like me who have similar stories. It's a shame that a grown adult can take out personal loans for $100,00 for house renovations, boats, vacations, you name it and still be able to declare bankruptcy. But people like me can't? At 20 years old you couldn't even drink alcohol but you could take out a $30,000 student loan. And are powerless to do anything about it. Its unbelievable. Makes me sick. And we are the innocent victims paying and suffering for it? Sallie Mae won't do anything to even help out...not even lower interest rates. They don't care that I won't even be able to put food on the table for my daughter.

Right now I have a fantastic lawyer that will be fighting for me if nothing happens this year with the bills trying to be passed. I am crossing my fingers the government will wise up. If not, I am ready to put up a large fight.

Comments (104)

Best Response
5/1/12

Whats up with the occupystudentdebt website? It looks like a 5th grader in the 90's created the website.

You would think with all the free time and worthless graphic design degrees these guys used $200K in loans for, they would be able to create a better website...

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5/1/12

Wow that put me on tilt just reading it. What happened to personal responsibility? Why decide you're going to bring a child into this world when you're 6 figures in debt?

The parallels to the mortgage mess are striking - companies give out huge loans and people borrow all sorts of ridiculous sums on the assumption that we'll have 5% unemployment forever and that a college degree will guarantee them a job. Until it doesn't. Same with houses: the price of them will never go down so the loan is safe! Until prices fall.

In reply to GetOnTop
5/1/12
GetOnTop:

Wow that put me on tilt just reading it. What happened to personal responsibility? Why decide you're going to bring a child into this world when you're 6 figures in debt?

The parallels to the mortgage mess are striking - companies give out huge loans and people borrow all sorts of ridiculous sums on the assumption that we'll have 5% unemployment forever and that a college degree will guarantee them a job. Until it doesn't. Same with houses: the price of them will never go down so the loan is safe! Until prices fall.

Agree to some extent. The story I pulled out is an example where the borrower is unwilling to take any accountability for her mistakes. There are, however, some genuinely disturbing stories where I sympathize a lot with the borrowers. When you have some time, read through some of the other stories on the site.

-MBP

5/1/12

i still dont get why he took out the loan--he was getting free tuition. Just because you can be approved for something doesn't mean you should.

In reply to mk0000
5/1/12
mk0000:

i still dont get why he took out the loan--he was getting free tuition. Just because you can be approved for something doesn't mean you should.

She claims it was her bipolar disorder that made her do it, and Sallie Mae enabled her. Seems like a cop-out to me.

-MBP

5/1/12

Knowing this person exists just ruined my fucking day.

In reply to manbearpig
5/1/12
manbearpig:
GetOnTop:

Wow that put me on tilt just reading it. What happened to personal responsibility? Why decide you're going to bring a child into this world when you're 6 figures in debt?

The parallels to the mortgage mess are striking - companies give out huge loans and people borrow all sorts of ridiculous sums on the assumption that we'll have 5% unemployment forever and that a college degree will guarantee them a job. Until it doesn't. Same with houses: the price of them will never go down so the loan is safe! Until prices fall.

Agree to some extent. The story I pulled out is an example where the borrower is unwilling to take any accountability for her mistakes. There are, however, some genuinely disturbing stories where I sympathize a lot with the borrowers. When you have some time, read through some of the other stories on the site.

Just browsed through the front page, there are definitely some situations that warrant relief from the govt./lenders. It's obviously not entirely individuals' fault; blame deserves to be spread to the lenders as well as the universities that have been unable to stop the inflation +2-3% a year rise in tuition rates. That said, it's a touchy issue. If you tighten the loan standards more then you could be denying someone "the American dream", whatever that is.

5/1/12

I think she does take personal responsibility for it choices, she is just saying that she wasnt mature or responsible enough at that age to understand the impact that debt can have on her future. I think some responsibility has to rest with the lender. i mean seriously who lends $120,000 to a student with no income and no credit history.

5/1/12

Using student loans to live the high-life and then complaining about paying them off later? Yeah, you definitely deserve my sympathy...

In reply to MrBroadway
5/1/12
MrBroadway:

I think she does take personal responsibility for it choices, she is just saying that she wasnt mature or responsible enough at that age to understand the impact that debt can have on her future. I think some responsibility has to rest with the lender. i mean seriously who lends $120,000 to a student with no income and no credit history.

I agree. It was definitely predatory lending. Nobody put a gun to her head to take the money, but they were counting on her immaturity and as expected, she took it and blew it on crap. But come on. The principal growing from 120K to 250K? That's insane.

-MBP

5/1/12

How far up should we move the age of adulthood? I understand her general argument, but at some point we've got to become responsible for ourselves. We, as a society, have decided that the age of majority is 18 in the United States. Fortunately, the solution is simply- no federally subsidized loans, period. I can agree with that. Colleges lower prices or suffer lower matriculation rates.

Absorbed in the sacrament of education, many have failed to perform the proper calculus as to the value of education. There is a price at which education is simply not worth it; and, what we are seeing is more and more people hitting the threshold of the return on investment becoming negative. The question is how obvious is the math. A rational 20 year-old who bothered to do some back-of-the-envelope math could figure that $120,000 over four years far exceeds the return expected from a criminal justice degree, I would think.

As for bankruptcy, I don't know. I'm extremely reluctant to support bankruptcy as a means to retire education loans. While I can feel for this lady, she is not really a victim. She got to eat out, satisfy material desires, and live the life on campus. Where exactly is the suffering? There are consequences for profligacy, but that hardly makes someone a victim. Now, I don't like this federally subsidized mess, but I am trying to think what happens next should this policy of bankruptcy be enlarged. In the past, mass bankruptcy on education debt was not observed, but one could argue the social constraints, stigmas, and taboos contributed to stemming it- which do not exist in similar strength today.

She sounds quite eager to declare bankruptcy, when she technically isn't bankrupt. She lives under difficult circumstances, true, but it is not like she has no job, no assets, and no income. The potential for abuse is obvious. If the mass delinquency observed on mortgages in the past 5 years is any indication of the expected behavior of student loan debtors, I would be very concerned if I were Sallie Mae and student loans became dischargeable via bankruptcy.

Bene qui latuit, bene vixit- Ovid

In reply to rls
5/1/12
rls:

How far up should we move the age of adulthood? I understand her general argument, but at some point we've got to become responsible for ourselves. We, as a society, have decided that the age of majority is 18 in the United States. Fortunately, the solution is simply- no federally subsidized loans, period. I can agree with that. Colleges lower prices or suffer lower matriculation rates.

Absorbed in the sacrament of education, many have failed to perform the proper calculus as to the value of education. There is a price at which education is simply not worth it; and, what we are seeing is more and more people hitting the threshold of the return on investment becoming negative. The question is how obvious is the math. A rational 20 year-old who bothered to do some back-of-the-envelope math could figure that $120,000 over four years far exceeds the return expected from a criminal justice degree, I would think.

As for bankruptcy, I don't know. I'm extremely reluctant to support bankruptcy as a means to retire education loans. While I can feel for this lady, she is not really a victim. She got to eat out, satisfy material desires, and live the life on campus. Where exactly is the suffering? There are consequences for profligacy, but that hardly makes someone a victim. Now, I don't like this federally subsidized mess, but I am trying to think what happens next should this policy of bankruptcy be enlarged. In the past, mass bankruptcy on education debt was not observed, but one could argue the social constraints, stigmas, and taboos contributed to stemming it- which do not exist in similar strength today.

She sounds quite eager to declare bankruptcy, when she technically isn't bankrupt. She lives under difficult circumstances, true, but it is not like she has no job, no assets, and no income. The potential for abuse is obvious. If the mass delinquency observed on mortgages in the past 5 years is any indication of the expected behavior of student loan debtors, I would be very concerned if I were Sallie Mae and student loans became dischargeable via bankruptcy.

I think if student debt is allowed to be discharged, the total number of loans will go way down, which will drive tuition down, which is exactly what's needed. I'm all for it. Not that any of it affects me since there's nothing like this in Canada. The best universities charge 5K a year on tuition, and student loans are interest free during studies.

-MBP

5/1/12

manbearpig,

Her principal did not grow from 120,000 to $250,000- it's the interest, penalties, and fees that tack as additional debt. And I'm not sure I accept the use of the term 'predatory lending'. If two parties are rational adults and agree to terms, that's that. Just because one party is faster, more cunning, or more ruthless doesn't excuse the counterparty for playing out of their league.

Bene qui latuit, bene vixit- Ovid

In reply to manbearpig
5/1/12

.[/quote]
I think if student debt is allowed to be discharged, the total number of loans will go way down, which will drive tuition down, which is exactly what's needed. I'm all for it. Not that any of it affects me since there's nothing like this in Canada. The best universities charge 5K a year on tuition, and student loans are interest free during studies.[/quote]

exactly, we need some reform in the student loan system. i mean this is no different from the US debt crisis, congress raises the debt limit and the govt keeps spending. expecting an 18 year old to manage debt of 30k or more responsibly is not wise. that is not responsibly lending.

In reply to rls
5/1/12
rls:

manbearpig,

Her principal did not grow from 120,000 to $250,000- it's the interest, penalties, and fees that tack as additional debt. And I'm not sure I accept the use of the term 'predatory lending'. If two parties are rational adults and agree to terms, that's that. Just because one party is faster, more cunning, or more ruthless doesn't excuse the counterparty for playing out of their league.

Principal, by definition, is the amount on which interest accrues. Since she now owes 250K, she is accruing interest on 250K.

I think you're basically relying on the caveat emptor defense, but you have to admit that taking advantage of someone you know is completely ignorant about what's coming their way is unethical.

-MBP

In reply to manbearpig
5/1/12
manbearpig:
rls:

How far up should we move the age of adulthood? I understand her general argument, but at some point we've got to become responsible for ourselves. We, as a society, have decided that the age of majority is 18 in the United States. Fortunately, the solution is simply- no federally subsidized loans, period. I can agree with that. Colleges lower prices or suffer lower matriculation rates.

Absorbed in the sacrament of education, many have failed to perform the proper calculus as to the value of education. There is a price at which education is simply not worth it; and, what we are seeing is more and more people hitting the threshold of the return on investment becoming negative. The question is how obvious is the math. A rational 20 year-old who bothered to do some back-of-the-envelope math could figure that $120,000 over four years far exceeds the return expected from a criminal justice degree, I would think.

As for bankruptcy, I don't know. I'm extremely reluctant to support bankruptcy as a means to retire education loans. While I can feel for this lady, she is not really a victim. She got to eat out, satisfy material desires, and live the life on campus. Where exactly is the suffering? There are consequences for profligacy, but that hardly makes someone a victim. Now, I don't like this federally subsidized mess, but I am trying to think what happens next should this policy of bankruptcy be enlarged. In the past, mass bankruptcy on education debt was not observed, but one could argue the social constraints, stigmas, and taboos contributed to stemming it- which do not exist in similar strength today.

She sounds quite eager to declare bankruptcy, when she technically isn't bankrupt. She lives under difficult circumstances, true, but it is not like she has no job, no assets, and no income. The potential for abuse is obvious. If the mass delinquency observed on mortgages in the past 5 years is any indication of the expected behavior of student loan debtors, I would be very concerned if I were Sallie Mae and student loans became dischargeable via bankruptcy.

I think if student debt is allowed to be discharged, the total number of loans will go way down, which will drive tuition down, which is exactly what's needed. I'm all for it. Not that any of it affects me since there's nothing like this in Canada. The best universities charge 5K a year on tuition, and student loans are interest free during studies.

Mass bankruptcy, or the risk of it, erodes the trust between borrower and lender. A better solution is simply to get rid of government-subsidized student loans. Loans should be made on the merit of the individual and the activities that the individual plans to use the money for. So, yes, the current economic realities dictate that an art history major should have a harder time getting a loan than a chemical engineer or less favorable terms, whichever the case may be. And one of the effects, I believe, will be a precipitous drop in the price of collegiate education.

Bene qui latuit, bene vixit- Ovid

5/1/12

Here's another one. In this case, I just genuinely feel bad for the guy.

___________________________________________________________________________________

I took every AP class available at my high school because I was told it would count towards college credit, and it did! I graduated a year early from college and I had a 50% scholarship and I was an RA so my housing needs were covered, but I still had to borrow about $60,000 which was for tuition only, I had a work study job to cover any personal expenses. Then I went to law school which cost about $150,000 leaving me at age 23 with a JD and $210,000 in debt earning $50,000 working for Legal Aid. Thank god my law school had a decent loan repayment assistance program for people working in public interest, but when I had to leave that job for another making only $10,000 more, the assistance disappeared. My friend owns a condo and my student loan payment is her mortgage payment, approximately $1500/month between AES, Citibank and Brazos. I have paid approximately $60,000 out of pocket in the last 3 years and still owe about $180,000. After the interest was added to my principal at the start of pre-payment, I haven't even gotten the principal down to what I actually borrowed. The loans are on 10-30 year repayment plans so at age 27, I'm looking at another 27 years of loan payments. I live with my parents to save on expenses which is embarrassing, but there's no way I can move out right now. I have never missed a payment, pay all my bills on time and have excellent credit, but I can't move forward with my life, be an adult, get married, have children, own a home, or live the american dream because the banks essentially own me until I'm 54. A financial planner in college told me that one should budget 30% of their income for living expenses, but right now 50% of my income goes to loans. I don't even think bankruptcy will help because I don't think student loans can be forgiven in bankruptcy proceedings, but I worked really hard to build my credit so I don't want to destroy it either. I am not asking for a handout, I've had a job since I was 14 years old...but if the government can spend billions of dollars bailing out banks, why not spend a few million bailing out the customers? The cost of a higher education is exorbitantly high in this country and if the government took measures to lower tuition or give aid on the front end, then maybe so many of us wouldn't be suffering at the back end.

-MBP

In reply to rls
5/1/12
rls:

manbearpig,

Her principal did not grow from 120,000 to $250,000- it's the interest, penalties, and fees that tack as additional debt. And I'm not sure I accept the use of the term 'predatory lending'. If two parties are rational adults and agree to terms, that's that. Just because one party is faster, more cunning, or more ruthless doesn't excuse the counterparty for playing out of their league.

sallie mae preys on naive hopeful students...students go through the education system thinking that there is a guaranteed job after college because thats what they've been taught from elementary all the way through high school. so it wouldnt be a stretch to think that the loan could be paid after graduation........ and unfortunately the new legislation to lower interest rate will not apply to her.

In reply to manbearpig
5/1/12
manbearpig:
rls:

manbearpig,

Her principal did not grow from 120,000 to $250,000- it's the interest, penalties, and fees that tack as additional debt. And I'm not sure I accept the use of the term 'predatory lending'. If two parties are rational adults and agree to terms, that's that. Just because one party is faster, more cunning, or more ruthless doesn't excuse the counterparty for playing out of their league.

Principal, by definition, is the amount on which interest accrues. Since she now owes 250K, she is accruing interest on 250K.

I think you're basically relying on the caveat emptor defense, but you have to admit that taking advantage of someone you know is completely ignorant about what's coming their way is unethical.

Technically, the $120,000 is still the principal. She will pay penalties, and penalties on her penalties, but that is not the money that was borrowed. If you want to call it the new principal, fine; but, I believe I am technically right. As for the "caveat emptor" response- I don't accept that an average rational 20 year-old is completely ignorant. And even if they are completely ignorant, they are capable of acknowledging their ignorance and acting accordingly. For example, someone who doesn't know any Chinese should not sign any contract written in Chinese. That is not a complex idea to understand or accept.

Bene qui latuit, bene vixit- Ovid

In reply to manbearpig
5/1/12
manbearpig:

Here's another one. In this case, I just genuinely feel bad for the guy.

___________________________________________________________________________________

I took every AP class available at my high school because I was told it would count towards college credit, and it did! I graduated a year early from college and I had a 50% scholarship and I was an RA so my housing needs were covered, but I still had to borrow about $60,000 which was for tuition only, I had a work study job to cover any personal expenses. Then I went to law school which cost about $150,000 leaving me at age 23 with a JD and $210,000 in debt earning $50,000 working for Legal Aid. Thank god my law school had a decent loan repayment assistance program for people working in public interest, but when I had to leave that job for another making only $10,000 more, the assistance disappeared. My friend owns a condo and my student loan payment is her mortgage payment, approximately $1500/month between AES, Citibank and Brazos. I have paid approximately $60,000 out of pocket in the last 3 years and still owe about $180,000. After the interest was added to my principal at the start of pre-payment, I haven't even gotten the principal down to what I actually borrowed. The loans are on 10-30 year repayment plans so at age 27, I'm looking at another 27 years of loan payments. I live with my parents to save on expenses which is embarrassing, but there's no way I can move out right now. I have never missed a payment, pay all my bills on time and have excellent credit, but I can't move forward with my life, be an adult, get married, have children, own a home, or live the american dream because the banks essentially own me until I'm 54. A financial planner in college told me that one should budget 30% of their income for living expenses, but right now 50% of my income goes to loans. I don't even think bankruptcy will help because I don't think student loans can be forgiven in bankruptcy proceedings, but I worked really hard to build my credit so I don't want to destroy it either. I am not asking for a handout, I've had a job since I was 14 years old...but if the government can spend billions of dollars bailing out banks, why not spend a few million bailing out the customers? The cost of a higher education is exorbitantly high in this country and if the government took measures to lower tuition or give aid on the front end, then maybe so many of us wouldn't be suffering at the back end.

This is rough. Guy worked hard and just needed the money to actually attend his schools. He seems intelligent and wasn't using his loans to live the "high life"

5/1/12

It's hard to have sympathy for stupid people. But I appreciate your posting this, MBP. It reinforces my decision to put my boys on a ship for a year after high school so they qualify for their captain's license at the end of it. If they want to go to college after that, fine. But at least they'll have a real trade to fall back on.

5/1/12

Man after reading some of those stories, I'm going to call my parents right now and say thank you for helping pay for college. I can't imagine being in some of those situations. Sounds terrible.

On the other hand, some of those people are just plain stupid and it's hard to feel bad for them as they put themselves into that situation...

In reply to rls
5/1/12
rls:
manbearpig:
rls:

manbearpig,

Her principal did not grow from 120,000 to $250,000- it's the interest, penalties, and fees that tack as additional debt. And I'm not sure I accept the use of the term 'predatory lending'. If two parties are rational adults and agree to terms, that's that. Just because one party is faster, more cunning, or more ruthless doesn't excuse the counterparty for playing out of their league.

Principal, by definition, is the amount on which interest accrues. Since she now owes 250K, she is accruing interest on 250K.

I think you're basically relying on the caveat emptor defense, but you have to admit that taking advantage of someone you know is completely ignorant about what's coming their way is unethical.

Technically, the $120,000 is still the principal. She will pay penalties, and penalties on her penalties, but that is not the money that was borrowed. If you want to call it the new principal, fine; but, I believe I am technically right. As for the "caveat emptor" response- I don't accept that an average rational 20 year-old is completely ignorant. And even if they are completely ignorant, they are capable of acknowledging their ignorance and acting accordingly. For example, someone who doesn't know any Chinese should not sign any contract written in Chinese. That is not a complex idea to understand or accept.

Not to split hairs, but the 120K is the original principal, and the 250K is the current principal owing. Anyway, enough of that.

I don't think the chinese example is a perfect analogy here. In that case, you know exactly what you don't know, and so you should know to avoid signing that contract. In these cases, the borrowers don't even know what they don't know. They don't even know which questions to ask.

-MBP

In reply to manbearpig
5/1/12
manbearpig:

Here's another one. In this case, I just genuinely feel bad for the guy.

___________________________________________________________________________________

I took every AP class available at my high school because I was told it would count towards college credit, and it did! I graduated a year early from college and I had a 50% scholarship and I was an RA so my housing needs were covered, but I still had to borrow about $60,000 which was for tuition only, I had a work study job to cover any personal expenses. Then I went to law school which cost about $150,000 leaving me at age 23 with a JD and $210,000 in debt earning $50,000 working for Legal Aid. Thank god my law school had a decent loan repayment assistance program for people working in public interest, but when I had to leave that job for another making only $10,000 more, the assistance disappeared. My friend owns a condo and my student loan payment is her mortgage payment, approximately $1500/month between AES, Citibank and Brazos. I have paid approximately $60,000 out of pocket in the last 3 years and still owe about $180,000. After the interest was added to my principal at the start of pre-payment, I haven't even gotten the principal down to what I actually borrowed. The loans are on 10-30 year repayment plans so at age 27, I'm looking at another 27 years of loan payments. I live with my parents to save on expenses which is embarrassing, but there's no way I can move out right now. I have never missed a payment, pay all my bills on time and have excellent credit, but I can't move forward with my life, be an adult, get married, have children, own a home, or live the american dream because the banks essentially own me until I'm 54. A financial planner in college told me that one should budget 30% of their income for living expenses, but right now 50% of my income goes to loans. I don't even think bankruptcy will help because I don't think student loans can be forgiven in bankruptcy proceedings, but I worked really hard to build my credit so I don't want to destroy it either. I am not asking for a handout, I've had a job since I was 14 years old...but if the government can spend billions of dollars bailing out banks, why not spend a few million bailing out the customers? The cost of a higher education is exorbitantly high in this country and if the government took measures to lower tuition or give aid on the front end, then maybe so many of us wouldn't be suffering at the back end.

Two years ago talked a relative of mine out of going to law school because of the cost/payout discrepancy. If I could see it before I was 20, then I think this guy should have seen it- especially since he had already been down that path. Did he ask at the end of 4 years of college, how am I going to pay down $60,000 in debt based on my current skills? Many people in these binds use the "the government did one wrong, why not another?". First, it was the deposit banks, then the investment banks, then GM/Chrysler- now it's the students. Here's an idea- no bailout. Not for banks, not for student- no one. If I cannot tell you how to live your life, then you can't have my money. More importantly, I don't want to tell you how to live you life and I don't want to give you my money.

Bene qui latuit, bene vixit- Ovid

In reply to rls
5/1/12
rls:
manbearpig:

Here's another one. In this case, I just genuinely feel bad for the guy.

___________________________________________________________________________________

I took every AP class available at my high school because I was told it would count towards college credit, and it did! I graduated a year early from college and I had a 50% scholarship and I was an RA so my housing needs were covered, but I still had to borrow about $60,000 which was for tuition only, I had a work study job to cover any personal expenses. Then I went to law school which cost about $150,000 leaving me at age 23 with a JD and $210,000 in debt earning $50,000 working for Legal Aid. Thank god my law school had a decent loan repayment assistance program for people working in public interest, but when I had to leave that job for another making only $10,000 more, the assistance disappeared. My friend owns a condo and my student loan payment is her mortgage payment, approximately $1500/month between AES, Citibank and Brazos. I have paid approximately $60,000 out of pocket in the last 3 years and still owe about $180,000. After the interest was added to my principal at the start of pre-payment, I haven't even gotten the principal down to what I actually borrowed. The loans are on 10-30 year repayment plans so at age 27, I'm looking at another 27 years of loan payments. I live with my parents to save on expenses which is embarrassing, but there's no way I can move out right now. I have never missed a payment, pay all my bills on time and have excellent credit, but I can't move forward with my life, be an adult, get married, have children, own a home, or live the american dream because the banks essentially own me until I'm 54. A financial planner in college told me that one should budget 30% of their income for living expenses, but right now 50% of my income goes to loans. I don't even think bankruptcy will help because I don't think student loans can be forgiven in bankruptcy proceedings, but I worked really hard to build my credit so I don't want to destroy it either. I am not asking for a handout, I've had a job since I was 14 years old...but if the government can spend billions of dollars bailing out banks, why not spend a few million bailing out the customers? The cost of a higher education is exorbitantly high in this country and if the government took measures to lower tuition or give aid on the front end, then maybe so many of us wouldn't be suffering at the back end.

Two years ago talked a relative of mine out of going to law school because of the cost/payout discrepancy. If I could see it before I was 20, then I think this guy should have seen it- especially since he had already been down that path. Did he ask at the end of 4 years of college, how am I going to pay down $60,000 in debt based on my current skills? Many people in these binds use the "the government did one wrong, why not another?". First, it was the deposit banks, then the investment banks, then GM/Chrysler- now it's the students. Here's an idea- no bailout. Not for banks, not for student- no one. If I cannot tell you how to live your life, then you can't have my money. More importantly, I don't want to tell you how to live you life and I don't want to give you my money.

You've got a good head on your shoulders, and it seems like you always have. A lot of that can be attributed to good parenting and a solid education in responsibility. Either you learned from the good example your parents/other family members set, or you learned from their mistakes. Either way, you had a privilege that a lot of people didn't have. I don't think they can really be held to the same standard to which you hold yourself.

-MBP

5/1/12

What exactly is wrong with the first person? She didn't understand interest? I can't really believe that. I understood the idea of compound interest around 2nd grade.

And how exactly do you end up taking out 120k for a criminal justice degree? You should go to a state school for that, maybe even start at a community college.

Then getting married/divorced and having a kid...it all just speaks to poor judgement. I cannot work up too much sympathy for this person. She made really, really bad decisions (while an adult) and has to pay for it.

--------

The second guy is a more sympathetic case. But he knew what he was getting into. Law school is known to be a poor investment. I wish him luck getting a public sector so he can qualify for loan forgiveness.

In reply to manbearpig
5/1/12
manbearpig:
rls:
manbearpig:
rls:

manbearpig,

Her principal did not grow from 120,000 to $250,000- it's the interest, penalties, and fees that tack as additional debt. And I'm not sure I accept the use of the term 'predatory lending'. If two parties are rational adults and agree to terms, that's that. Just because one party is faster, more cunning, or more ruthless doesn't excuse the counterparty for playing out of their league.

Principal, by definition, is the amount on which interest accrues. Since she now owes 250K, she is accruing interest on 250K.

I think you're basically relying on the caveat emptor defense, but you have to admit that taking advantage of someone you know is completely ignorant about what's coming their way is unethical.

Technically, the $120,000 is still the principal. She will pay penalties, and penalties on her penalties, but that is not the money that was borrowed. If you want to call it the new principal, fine; but, I believe I am technically right. As for the "caveat emptor" response- I don't accept that an average rational 20 year-old is completely ignorant. And even if they are completely ignorant, they are capable of acknowledging their ignorance and acting accordingly. For example, someone who doesn't know any Chinese should not sign any contract written in Chinese. That is not a complex idea to understand or accept.

Not to split hairs, but the 120K is the original principal, and the 250K is the current principal owing. Anyway, enough of that.

I don't think the chinese example is a perfect analogy here. In that case, you know exactly what you don't know, and so you should know to avoid signing that contract. In these cases, the borrowers don't even know what they don't know. They don't even know which questions to ask.

I would say you are cutting too much slack, but I think you are out-and-out advocating for poor decision-making practices. Knowing that you don't know much is more than enough reason not to sign. It's not like its either sign or a bullet to the brain.

Bene qui latuit, bene vixit- Ovid

5/1/12

It wasn't really 'known' until ~2005 or so that law school was shit.

Sounded like he could be fine if he stayed public interest. Fuck him, zero sympathy.

5/1/12

Wow, I don't even know what to say about this guy. This one is a must read...

p.s. the bold part is just painfully ironic.

______________________________________________________________________________________________

I went into college knowing it was going to be very expensive. I knew that if I wanted to make it happen, I would have to go BIG. I decided to gut-rehab two historic homes. The plan was to fix them up, live in one with my roommates and rent out the other, and then sell them after I graduated. I worked 60+ hours a week on the houses while going to school for 6 years. It was the hardest thing I ever did, but I was successful.

Unfortunately, when I graduated, America was officially in a recession and the housing bubble had popped. My beautifully renovated houses were worth less than we put into them. My parents, who financed the homes, were forced to foreclose on the houses and file for bankruptcy.

I currently have about $100,000 in federal loans and $200,000 in Sallie Mae loans. Even if I could find a full-time job in my field, I will not be able to afford the minimum monthly payments.

In one year from now I will no longer be eligible for forbearance. I have realized that even if I am able to scrape by and pay the payments, I will have to live a life of poverty. I will never be able to buy a car or a home or even have children. I just simply will not be able to afford it. This is not based on exaggeration or lack of research... remember I went to college! I did the math. I will never live a normal life.

I could have skipped college and become a gas station attendant instead and over the course of my life been in a better financial situation then I am now.

-MBP

5/1/12

Zero sympathy for the girl in the OP. She had FREE TUITION, then took out loans to party, eat out, buy clothes, and have a kid. All for a criminal justice degree. I mean seriously she managed to blow 120K while in school. Sorry honey your SOL.

I feel sorry for the kids who paid back their loans and worked hard in school. While this girl will in the end get some kind of relief when congress comes up with a way to "fix" the student loan mess.

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5/1/12

I feel the tiniest bit of sympathy for the girl in the OP because she ended up being bipolar and because she has a child that has to live with the consequences of her stupidity. That being said, the fact that she blames manic episodes for all of her spending is ridiculous. Talk about not taking responsibility for herself.

First of all, she said she got anxiety about the fact that she was working part-time and going to school full-time? Seriously? Thousands upon thousands of people do that every year and they turn out just fine.

Why the fuck was she taking out a $30K loan when tuition was $4K? It took her 11 YEARS to finish college with a degree in CRIMINAL JUSTICE. These are just stupid, stupid decisions.

She says she has a lawyer fighting for her - where's she getting the money to pay that lawyer?

I'm sorry, but I really don't think it takes much common sense to understand the implications of taking out loans that are that big. Anyone intelligent enough to be going to college should understand it.

As for our law school friend, a little more sympathy for him because he seemed like he was trying to do the right thing. That being said, his first mistake was going to a college that he couldn't reasonably afford. He had an RA gig, work-study, 50% tuition, graduated in 3 years, and still racked up $60K in debt? That's ridiculous.

He's 27, which means that law school wasn't as vilified when he enrolled. So a little sympathy there, but again he should have chosen a cheaper law school. Why would he leave his loan repayment gig for another job without assistance? He was probably "saving" more than $10K/year by being on loan forgiveness.

His loan payment is $1,500/month, but he makes at least $60K/year. He's living with his parents. He should have a ton of money to throw at his loans. It's ridiculous to say that he can't move forward with his life until he's 54. Our President and his wife certainly moved on with theirs, and I'd say they turned out OK.

At least this guy seems like he's trying. Retail girl just wants handouts.

As for #3... I don't even know where to start. Just a dumbass who didn't think about the implications of his actions. How does he have $300K in loans when his parents financed the homes? He probably could have put himself in less debt by not working on those houses and graduating in 4 years. Just someone that bit off more than they could chew and now wants handouts.

MM IB -> Corporate Development

5/1/12

Wow, this one takes the cake....

__________________________________________________________________________________________________

Dear People:

As I approach my 60th birthday, I find myself in a financial position that I never would have dreamed possible in the United States of America. Here are the troubling statistics that have resulted from working for over 40 years of my life. I am a teacher and am married to a wife who is part owner of a small CPA firm in southeastern Tulare County, California.

Fifteen years ago, we were able to afford for my wife to finish her Bachelor of Arts in Business Administration. She completed her CPA certification twelve years ago. At that time, we were optimistic that her salary would eclipse mine and that we would be able to afford to send our two children to a four-year university. Her salary has never caught up to mine and remains about $20,000.00 less. In spite of our children ranking 6th (my son) and 4th (my daughter) in their high school classes, we were not eligible for financial aid because of our income. That was then, this is now.

Our total net worth is -$10,000.00

Our home is worth $180,000.00 dollars and we owe $178,400.00.

We have three outstanding student loans:

Loan 1: $66,967.94

Loan 2: $88,479.18

Loan 3: $15, 178.21

Fortunately (or not), out children have taken out loans for their post baccalaureate degrees.

My son (a struggling attorney) owes $198,395.27 for law school

My daughter (a teacher) owes $35, 938.09 for her credential work.

If you total all of our education debt, my family owes $404,958.69 for student loans. This is our American Dream (night mare). Most of our loans are through Sallie Mae

Sincerely,

Michael C. Wait

-MBP

In reply to WestCoastDeveloper
5/1/12
Nobama88:

Whats up with the occupystudentdebt website? It looks like a 5th grader in the 90's created the website.

You would think with all the free time and worthless graphic design degrees these guys used $200K in loans for, they would be able to create a better website...

LOL SB!

-MBP

5/1/12

I mean.. it's worth considering that student loans are being driven by the same forces as mortgages were up to '07. Student Loan ABS are generally federally insured at rates below their actuarial risk premium - basically an off-balance sheet government subsidy. They are also ubiquitous, and pretty easy to get.

The most significant difference I can think of between MBS and SLABS is the nature of the underlying "secured asset," i.e. a house, vs a person's future earnings for as long as it takes to repay the loan. As someone who has worked with one or two shaky subprime asset class securitizations, SLABS truly scare me. Once these loans are sold into the deal, principal adjustments/other restructuring accommodations become dramatically more difficult. God forbid the senior note-holders realize a loss.

The sooner these things become somehow discharged in bankruptcy, the better. In every other case (e.g. MBS) I would say "too bad - you signed the papers." But I've met people all over the place who are still saddled with this shit. I actually met a bulge bank IBD MD who's still paying off his MBA debt. WTF?

"There are three ways to make a living in this business: be first, be smarter, or cheat."

5/1/12

lol, listen to this genius!

___________________________________________________________________________________________

Here goes again... I am running on empty. Maybe Obama could bail us out... Honestly, everyone else gets bailed out. Especially the rich. I'm just thinking... hmm, why not tax all Americans. What are there? 306,000,000 people in this country? Maybe $2/year or even .25 a month... very minimal. Do the math. No one would really miss it. We'd be out of debt then and we could contribute to our economy and live like "normal" Americans . More jobs would open from us spending in our economy...plus maybe we could stop using other countries to produce our goods, too. What is so wrong with that? I don't think its too much to ask and I don't think it is impossible. Why is this idea so rejected? My son will never go to college if things remain the same... not without a full scholarship anyway.

p.s. I don't have a picture of my debt... but I owe $160,000 mainly b/c of interest. I took out $75,000 from 2001-2007.

-MBP

5/1/12

Why go to a school you cannot afford? Go to community college for 2 years, transfer to state school, stay out of debt.

In reply to manbearpig
5/1/12
manbearpig:

lol, listen to this genius!

___________________________________________________________________________________________

Here goes again... I am running on empty. Maybe Obama could bail us out... Honestly, everyone else gets bailed out. Especially the rich. I'm just thinking... hmm, why not tax all Americans. What are there? 306,000,000 people in this country? Maybe $2/year or even .25 a month... very minimal. Do the math. No one would really miss it. We'd be out of debt then and we could contribute to our economy and live like "normal" Americans . More jobs would open from us spending in our economy...plus maybe we could stop using other countries to produce our goods, too. What is so wrong with that? I don't think its too much to ask and I don't think it is impossible. Why is this idea so rejected? My son will never go to college if things remain the same... not without a full scholarship anyway.

p.s. I don't have a picture of my debt... but I owe $160,000 mainly b/c of interest. I took out $75,000 from 2001-2007.

Goes to school for 6 years (through the best 6 economic years in a long time), supposedly takes out $75K in loans but seems to double the loan amount due to interest?

These people are fucking brilliant. The writing is so eloquent. College educated at its finest. So glad we get to call these people 'college educated Americans'. So much hope.

5/1/12

SECFinance,

As a side note, there really isn't such a thing as a 'cheaper law school'. Law school costs are surprisingly uni-modal- it's astounding really. From Tier 1 through Tier 4, one can easily expect to pay $40,000 a year in costs, depending on location. For example, a Tier 3/4 school, Albany Law School, has a cost $39,000 for tuition only. According to their website, the average graduate had $120,722 of debt.This is part of the reason I talked my relative out of it. Unless you graduate at the top of a T-14 (preferably top five) law school, you have an uphill battle for employment and paying your loans.

Bene qui latuit, bene vixit- Ovid

5/1/12

Going forward, student loans should have stricter standards and smaller caps and also be dischargeable.

The loans are just too easy to get, and a loan which is not dischargeable is simply broken.

5/1/12

I should print t-shirts that read: "I'm short your student loan" in honor of Mr. Zuckerman. Just looked at some student loan ABS on Bloomberg- oh my. If I can find the appropriate CDS contracts, I'll make out like Paulson.

Bene qui latuit, bene vixit- Ovid

5/1/12

Wow. That is all.

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

In reply to rls
5/1/12
rls:

I should print t-shirts that read: "I'm short your student loan" in honor of Mr. Zuckerman. Just looked at some student loan ABS on Bloomberg- oh my. If I can find the appropriate CDS contracts, I'll make out like Paulson.

I don't think you'll find any on the vast majority of SLABS (i.e. gov't insured ones). Not sure of the state of the CDS market on Private Label SLABS - probably depends on deal size.

Cola Coca:

Going forward, student loans should have stricter standards and smaller caps and also be dischargeable.

The loans are just too easy to get, and a loan which is not dischargeable is simply broken.

I agree that a move towards some extent of discharg-ability is necessary (and probably likely).

But that said, there is a strong rationale for its present state. Mortgages are secured with the asset they finance, same with auto loans. In a sense, student loans are the same - they are secured with the future cash flows they finance, namely (in theory) increased earnings resulting from the financed higher education degree. Mortgages are personally dischargable because in bankruptcy, the lender receives the underlying asset - Sallie Mae can't just foreclose on you and sell your organs or whatever. So, to avoid the moral hazard of a former student declaring bankruptcy (and essentially receiving a free education), the loans are structured as they are.

Not to say that I agree that this is definitively "right" or otherwise appropriate. But there is a logic to it, and a food reform should take the lenders' position into consideration too. Maybe student loans should have a structured payment schedule, or even come straight out of the borrower's paychecks. E.g. until principal + interest are repaid, debtor's paychecks will be garnished at a maximum of 20% of each paycheck payment for a maximum of 10 years. Not necessarily the right way, but there needs to be some framework that allows student loans to tackle the moral hazard problem, but not be too inhumane.

"There are three ways to make a living in this business: be first, be smarter, or cheat."

In reply to rls
5/1/12
rls:

I should print t-shirts that read: "I'm short your student loan" in honor of Mr. Zuckerman. Just looked at some student loan ABS on Bloomberg- oh my. If I can find the appropriate CDS contracts, I'll make out like Paulson.

Do universities really have the gall to invest in SLABS? If they did, that means not only would they be making money off of tuitions and fees on students, they would also be making money on Wall Street through investing in their securitized debts--i.e. they'd be getting paid 2x's for every student. In other words, this would give universities strong incentives to increase their tuitions in order to build up their endowments, all at the expense of putting our children in more and more debt. Our system couldn't be this corrupt and sickening could it?

In reply to MrBroadway
5/1/12
MrBroadway:
rls:

I should print t-shirts that read: "I'm short your student loan" in honor of Mr. Zuckerman. Just looked at some student loan ABS on Bloomberg- oh my. If I can find the appropriate CDS contracts, I'll make out like Paulson.

Do universities really have the gall to invest in SLABS? If they did, that means not only would they be making money off of tuitions and fees on students, they would also be making money on Wall Street through investing in their securitized debts--i.e. they'd be getting paid 2x's for every student. In other words, this would give universities strong incentives to increase their tuitions in order to build up their endowments, all at the expense of putting our children in more and more debt. Our system couldn't be this corrupt and sickening could it?

Don't hate the player, hate the game.

5/1/12

"My friend owns a condo and my student loan payment is her mortgage payment, approximately $1500/month between AES, Citibank and Brazos."

Thats what you get for borrowing from a company called Brazos. "OMG, I feel like Brazos is taking me to the bang bus with these student loan payments!"

lololololol brazos.

Ok I'm done.

5/1/12

I honestly wanna know what colleges these guys are taking out loans for.

5/1/12

This is basically a sequel to the housing bubble, only this time it will end much worse.

Artificially low lending rates that don't reflect underlying risk :: check
Widely accepted truth that having more people in college (like owning houses) is better :: check
Well-connected groups on both sides of the aisle who can lobby to keep the party going :: check

Now add into the stew: recalcitrant higher ed establishment, free online education rumbling on the horizon, and austerity looming.

Many of these universities are hilariously over-built and are often the largest employer in their respective cities. I give it about three more years to reach a Wagnerian climax before the bitch implodes.

The years 2008 to 2015 will be remembered as a giant macroeconomic bowel movement. I can hear the economy straining as a I type.

In reply to Short Bus All-Star
5/1/12
Short Bus All-Star:

The years 2008 to 2015 will be remembered as a giant macroeconomic bowel movement. I can hear the economy straining as a I type.

f*cking gold

Making money is art and working is art and good business is the best art - Andy Warhol

5/1/12

How do we make money off this...

We all know it is going to implode.

In reply to WestCoastDeveloper
5/1/12
Nobama88:

How do we make money off this...

We all know it is going to implode.

SWHC & ATK

"There are three ways to make a living in this business: be first, be smarter, or cheat."

5/1/12

And this is why high schools should be required to teach personal finance.

In reply to rls
5/1/12
rls:

SECFinance,

As a side note, there really isn't such a thing as a 'cheaper law school'. Law school costs are surprisingly uni-modal- it's astounding really. From Tier 1 through Tier 4, one can easily expect to pay $40,000 a year in costs, depending on location. For example, a Tier 3/4 school, Albany Law School, has a cost $39,000 for tuition only. According to their website, the average graduate had $120,722 of debt.This is part of the reason I talked my relative out of it. Unless you graduate at the top of a T-14 (preferably top five) law school, you have an uphill battle for employment and paying your loans.

I know that that person's debt load isn't too bad for law school, but let's face it - i'm sure they didn't go to the cheapest one they could have gone to, and I'm sure that they didn't go to a very good one.

MM IB -> Corporate Development

5/1/12

Cant wait till my tax dollars to go baling guys like THIS guy out:

THIS GUY:

My path lead me first to the recent history of the 20th century and the Cold War particularly which required a better understanding of Russian history than i had ever received. When viewed objectively, without the prejudices of our childhood i was shocked to discover that the leaders of the Russian Revolution, Lenin and Trotsky, were in fact the original champions of the 99%, seeking to establish a truly democratic world order and that the horrors committed in the name of Communism in the 20th century only came to pass after the reactionary coup of Stalin when the Soviet Union became "communist" in name only.

In reply to Sandhurst
5/1/12
Sandhurst:

I mean.. it's worth considering that student loans are being driven by the same forces as mortgages were up to '07. Student Loan ABS are generally federally insured at rates below their actuarial risk premium - basically an off-balance sheet government subsidy. They are also ubiquitous, and pretty easy to get.

The most significant difference I can think of between MBS and SLABS is the nature of the underlying "secured asset," i.e. a house, vs a person's future earnings for as long as it takes to repay the loan. As someone who has worked with one or two shaky subprime asset class securitizations, SLABS truly scare me. Once these loans are sold into the deal, principal adjustments/other restructuring accommodations become dramatically more difficult. God forbid the senior note-holders realize a loss.

The sooner these things become somehow discharged in bankruptcy, the better. In every other case (e.g. MBS) I would say "too bad - you signed the papers." But I've met people all over the place who are still saddled with this shit. I actually met a bulge bank IBD MD who's still paying off his MBA debt. WTF?

I've been waiting to hear a shitstorm about SLABS since I heard about the details a year or two ago. Pretty messed up.

5/1/12

Only way loans should be forgiven is if a student did well in school and due to some health reason they were impaired and not able to work.

5/1/12

Why not give the option? Give students the option to take either governement insured loans that are not forgiveable, or loans that are eligiable for bankruptcy (obviously significantly less, higher rates, and perhaps requiring cosigners/collateral). Even if it weren't an option for some students, it would be a great way to illustrate the difference between the two to teach, as well as allow smarter students in tricky situations to make smart decisions.

Capitalism is freedom.

5/1/12

If I can do it all over again,

I'd go into 100K debt to attend a prestigious target undergrad instead of going to a non-target public for about 10K.
I would've saved money in the long run by not having to go to for a MS or MBA degree.

Born in hell, forged from suffering, hardened by pain.

In reply to Sandhurst
5/2/12
Sandhurst:

Sallie Mae can't just foreclose on you and sell your organs or whatever.

You just solved the crisis, when you cant repay, you get foreclosed upon, either into labor for the government or Sallie Mae gets your organs, you decide.

5/2/12

Don't feel sorry in the slightest for any of the people in cases mentioned so far, sorry.

At the end of the day, many people live paycheck to paycheck, struggle to make ends meet and have bleak outlooks. Many of these people haven't been to college themselves, their kids will fail in school, their kids won't go to college, and the cycle will continue on with exceptions few and far between. Many people live like this without owning a car, a house, a portfolio and so on. Just because you've been to college, your not exempt.

Cry me a river.

5/2/12

I feel bad for the guy that worked on those two houses. He took what, at the time, would've seemed like a smart move by just about anyone and busted his ass. The market crashed and he got fucked. THAT is a shitty situation.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

5/2/12

How about University Endowments have to insure a portion of the loans made? That'll give them a bit of skin in the game and maybe encourage cheaper tuition costs. Also does anybody understand why people go to mediocre private schools for 30-50k a year, when there are better public schools for 12-18k a year? I lived on about 15k a year or so, and that included all my tuition, books, and everything. While I feel bad for the situations of some of these people, I know tons of people who took out student loans to buy brand new cars they didn't need, spend way more on alcohol/drugs than they needed to, buy brand new thousand dollar tv's that they didn't need, go to spring break every year, and who knows what other shit they didn't need. Meanwhile I worked hard and graduated with only taking out less than 14k in principal for a worthwhile degree.

5/2/12

this will bring the financial system(along with other factors) to its knees in the coming years

5/2/12

The arguments in favor of mortgaging your life for an education just keep melting away:
http://www.nytimes.com/2012/05/03/education/harvar...

"There are three ways to make a living in this business: be first, be smarter, or cheat."

5/2/12

having a bipolar personality disorder is actually characterized by excessive spending. It is literally a symptom of the disorder. Granted she should have known better, but for those of you who know people with mental disorders you know just how irrational they can act and they cannot help it. It is really quite sad. There should have been some sort of check to see what her situation was before she was approved for the loans. But what are you gonna do? She is going to die paying off that debt and it is definitely a mixture of her own fault and fault within the system, but mostly her fault and she is going to (literally) pay for it.

In reply to WestCoastDeveloper
5/2/12
Nobama88:

Whats up with the occupystudentdebt website? It looks like a 5th grader in the 90's created the website.

You would think with all the free time and worthless graphic design degrees these guys used $200K in loans for, they would be able to create a better website...

This is priceless. Sounds like class warfare. I'd silver banana you, but I don't know where the SB button went... Anyone know?

It is better to be vaguely right than exactly wrong - JMK

5/2/12

Recent graduate here and I have $95K in outstanding student loans. Finance major in college, graduated honors, blah blah blah....I'm here to enlighten you monkies

Many people think that the rise in student loans and predatory lending is because of rising tuition. I hate to break it to you but it's vise versa. Simple supply/demand here people! The amount of seats in an American college is essentially finite but practically an unlimited amount of potential students can be approved for student loans (the predatory part), thus schools are free to raise tuition because there will ALWAYS be someone to fill that spot.

Clearly the US government won't at least partially bail out the students because the people who run this country are fucking retards (pardon the french) and could care less about anyone who is not a corporation so I'll be realistic on how to fix this:

1. Forgive all capitalized interest and have none accrue during time in school (the Canada way i think or is that socialism?)
2. All new and outstanding interest rates should be set at around 4%. There is no reason for some public rates to be at 6.8% or above. They say it's because there is no collateral but guess what? There is, in the form of future wages, taxes, and subisides. Complete BS
3. Only qualified potential students (merit based?) should receive government loans. Decreasing demand, decreases tuition due to free market competition.

By the way, the collections agency for SLMA is a subsidiary (General Revenue Corp) of SLMA itself. So don't you think SLMA has incentive for students to default so they can tack on fees upon fees? Get rid of this to.

5/2/12

Or you could work through undergrad, go to a cheaper school and have maybe 30K in debt. Dude, I have two masters and don't even have that level of debt. What were you thinking?

In reply to ChuckyFinster
5/2/12
ChuckyFinster:

Recent graduate here and I have $95K in outstanding student loans. Finance major in college, graduated honors, blah blah blah....I'm here to enlighten you monkies

Many people think that the rise in student loans and predatory lending is because of rising tuition. I hate to break it to you but it's vise versa. Simple supply/demand here people! The amount of seats in an American college is essentially finite but practically an unlimited amount of potential students can be approved for student loans (the predatory part), thus schools are free to raise tuition because there will ALWAYS be someone to fill that spot.

Clearly the US government won't at least partially bail out the students because the people who run this country are fucking retards (pardon the french) and could care less about anyone who is not a corporation so I'll be realistic on how to fix this:

1. Forgive all capitalized interest and have none accrue during time in school (the Canada way i think or is that socialism?)
2. All new and outstanding interest rates should be set at around 4%. There is no reason for some public rates to be at 6.8% or above. They say it's because there is no collateral but guess what? There is, in the form of future wages, taxes, and subisides. Complete BS
3. Only qualified potential students (merit based?) should receive government loans. Decreasing demand, decreases tuition due to free market competition.

By the way, the collections agency for SLMA is a subsidiary (General Revenue Corp) of SLMA itself. So don't you think SLMA has incentive for students to default so they can tack on fees upon fees? Get rid of this to.

No, I agree completely. Those are all decent points. The government has to get out of the student loan business. The problem, especially with number 3, is that the public believes education is a God given right. This is the exact road our government took in regards to housing - "it is a God given right that every American owns a new home". We paid for the housing bubble and we will have to pay for the student loan bubble. Every one is taking notice and knows it is coming but no one wants to do shit about it.

Could you imagine Obama coming out and saying that the govt will be getting out of the loan business and now students will be forced to pay for it on their own (making schools such as the for profit diploma mills shut down and qualified universities lower tuition) or qualify for a loan through normal routes? It would be a cold day in hell when that happens; for profit diploma mills would be out of business and the respectable universities would have to decrease tuition substantially in order to fill demand and your art majors would be non existent.

5/2/12

I mean I am not 100% opposed to no capitalized interest and a lower interest rate, but #3 isn't going to happen.

Student loans are absolutely great. They allow people who otherwise couldn't afford college the chance to go. The problem is people think free money and go wherever they want. This pushes up prices for in demand schools. But that is a persons choice. You can take less than the max and go to a state school or smaller school.

Things to reduce your student loans.

1) Community college and transfer in
2) State University
3) Work during school
4) Add another year and work, thereby spreading out the costs
5) Live at home and commute
6) Get scholarships, student aid, grants
http://www.suny.edu/student/paying_tuition.cfm

SUNY Tuition is ~20K for a 4 year degree. Commute from home and work and you will be debt free.
http://admissions.rutgers.edu/costs/tuitionandfees...

Rutgers tuition - ~50K for a 4 year degree. Commute from home and work and you maybe have 20K in debt. This can be reduced through implementation of a few of the above techniques
http://www.registrar.illinois.edu/financial/tuitio...

University of Illinois Tution - ~40K for a 4 year degree. Commute and work and you maybe have 10K in debt.

See, there are countless options and plenty of affordable ways to do it. 20K in debt for a 4 year degree is a small price to pay for the opportunities you get. People who go 100K in debt CHOOSE to do so.

Freedom of choice, freedom of responsibility.

5/2/12

Thanks Nobama...

I wasn't saying that the gov't should get out of the SL buisness. Just limit it intelligently (key word here). It think it's about time Americans start understanding we're not the greatest nation on earth in any way. The economic "recovery" will never fully come to fruition with SL debt piled on top of future generations. I think this it is a relatively easy fix but then again it is the US government......

5/2/12

Kind of ironic a website populated with so many "non-target" kids struggling to make it is so full of "can't afford it? tough shit" attitudes.

5/2/12

It's not really ironic at all. If they can handle it, then they can tell others to deal with it as well.

In reply to freemarketeer
5/2/12
freemarketeer:

Kind of ironic a website populated with so many "non-target" kids struggling to make it is so full of "can't afford it? tough shit" attitudes.

Mmmm... how the hell is that even close to ironic?

5/2/12
In reply to freemarketeer
5/3/12
freemarketeer:

Kind of ironic a website populated with so many "non-target" kids struggling to make it is so full of "can't afford it? tough shit" attitudes.

How is it ironic?

5/3/12

I sympathize with these people. I graduated recently from a Non-Target with 90K in student loan debt. My parents were generous enough to cover 50% of my tuition, bringing the family debt total to 180K. Yes, you read that correctly, 180K for a 4-year, Non-Target, private university. Fortunately for myself, my parent's are in a healthy financial situation and were able to slightly ease the burden. As soon as I graduated, they took existing home equity on the house and completely paid off the balance. This reduced the interest rates down from 8% to 4%, extended the pay period out to 30 years, and more or less consolidated 10 different loans. Although I don't think it will be necessary, this also makes the debt dischargeable, and it can be refinanced in the future if necessary.

As a senior in high school, I was naive and immature. As a 17-year old, I chose to go to one of the nation's most expensive schools. Although my family recommended I attend community college, I had my heart set out on the full college experience. Within 6 months, I realized I made a major financial mistake. Since the damage was done, I figured I had to make the best of my situation. Over the course of 4 years, I worked my ass off, had the highest GPA in my major, and had a job lined up by November. As a finance major, I am considerably more responsible and mature now as a graduate, but I had no idea what the fuck I was thinking as a senior in high school. I could have gotten to where I am today by taking the community college to state school route, at probably a sixth of the cost. That being said, I still appreciate the additional two years I got in a real college, I met my best friends, girlfriend, had awesome experiences, and expanded my network.

I think everyone needs to keep things in perspective here. This is a forum full of potential or current investment bankers, traders, consultants, etc. You all have A-Type personalities and can amortize your debt in Excel within minutes. The average high school senior is just looking to get ahead in life. When your teachers are drilling the importance of college in your head, day in and day out, you feel like not going deems you as a failure. In turn, immature students with 2.0 GPAs end up paying 50K a year in tuition for no-name private schools. WSO types telling high school students that they should be more financially responsible is like an athlete telling an overweight person that all he has to do is eat less to lose weight. There's obviously a lot more to it than that.

5/3/12

Here are some of the ideas I would like to see implemented over the course of the next 10 to 50 years.

1. Eliminate all government funding and subsidized loans for for-profit colleges. This includes the University of Phoenix, Everest College, Heald, etc. This wouldn't include trade schools, such as Wyotech, where a physical trade is being taught. I understand that there are successful individuals who come out of these programs, but I doubt anymore than 10% of students see a positive ROI from for-profit schools.

2. High Schools need to have some form of exit-counseling when it comes to student debt. I didn't have one. At the very least, educate students about the risks they are taking by going to school. Review lessons on compound interest, roi, etc.

3. Make student loans dischargeable in bankruptcy. Although there is no physical asset held as collateral, not giving the option is essentially giving Salliemae indentured servants.

4. This might be controversial, but I think students need to understand the risks of their major. Why should student loans be capped at a flat rate? (6.8% Unsubsidized, 8.5% PLUS). When you purchase a home, your FICO score influences the interest rate you pay. In turn, a student's proposed major should impact interest rates. Engineering and finance majors should pay a lower interest rate than art history or criminal justice majors. Switching majors or taking a year abroad should increase your interest rate. I know this is radical and will never happen, but it just makes much more sense.

5/3/12

I urge everyone to read this. It's sickening. Sallie Mae is certainly a very unethical company.
http://studentloanjustice.org/argument.htm

-MBP

5/4/12

It's like that one skit from kanye's college dropout...

You keep it going man, you keep those books rolling,
You pick up those books your going to read
And not remember and you roll man.
You get that associate degree, okay,
Then you get your bachelors, then you get your masters
Then you get your master's masters,
Then you get your doctron,
You go man, then when everybody says "quit"
You show them those degree man, when
Everybody says "hey, your not working,
Your not making in money,"
You say look at my degrees and you look at my life,
Yeah i'm 52, so what, hate all you want,
But i'm smart, i'm so smart, and i'm in school,
And these guys are out here making
Money all these ways, and i'm spended mine to be smart.
You know why?
Because when i die, buddy, you know
What going to keep me warm, that right, those degrees

In reply to SlikRick
5/4/12
SlikRick:

Within 6 months, I realized I made a major financial mistake. Since the damage was done, I figured I had to make the best of my situation.

The damage was far from done at that point. You could have transferred to your state U and saved a bunch of money. Obviously it's going to end up fine for you because you're hustling but to say this is a mistake.

I think everyone needs to keep things in perspective here. This is a forum full of potential or current investment bankers, traders, consultants, etc. You all have A-Type personalities and can amortize your debt in Excel within minutes. The average high school senior is just looking to get ahead in life. When your teachers are drilling the importance of college in your head, day in and day out, you feel like not going deems you as a failure. In turn, immature students with 2.0 GPAs end up paying 50K a year in tuition for no-name private schools. WSO types telling high school students that they should be more financially responsible is like an athlete telling an overweight person that all he has to do is eat less to lose weight. There's obviously a lot more to it than that.

This is true, but these people don't deserve to get their loans forgiven because they are idiots. Just like obese people don't deserve free lipo and gastric bypass because they are fat. It's an insult to everyone who was in their position but worked their ass off and paid off their debt.

Unless the government is also going to be giving straight cash to people who had loans but paid them back, they shouldn't forgive loans period.

I'm all for maximum loan levels. Fuck what Johnny says, he doesn't need to go to the 45K/year school. He can go to CC and transfer to State Tech. I'm all for payment limits in the first 10 years - we shouldn't be bankrupting people who can't find a job ITE. But to forgive loans is ridiculous.

MM IB -> Corporate Development

In reply to SECfinance
5/4/12
SECfinance:
SlikRick:

Within 6 months, I realized I made a major financial mistake. Since the damage was done, I figured I had to make the best of my situation.

The damage was far from done at that point. You could have transferred to your state U and saved a bunch of money. Obviously it's going to end up fine for you because you're hustling but to say this is a mistake.

I think everyone needs to keep things in perspective here. This is a forum full of potential or current investment bankers, traders, consultants, etc. You all have A-Type personalities and can amortize your debt in Excel within minutes. The average high school senior is just looking to get ahead in life. When your teachers are drilling the importance of college in your head, day in and day out, you feel like not going deems you as a failure. In turn, immature students with 2.0 GPAs end up paying 50K a year in tuition for no-name private schools. WSO types telling high school students that they should be more financially responsible is like an athlete telling an overweight person that all he has to do is eat less to lose weight. There's obviously a lot more to it than that.

This is true, but these people don't deserve to get their loans forgiven because they are idiots. Just like obese people don't deserve free lipo and gastric bypass because they are fat. It's an insult to everyone who was in their position but worked their ass off and paid off their debt.

Unless the government is also going to be giving straight cash to people who had loans but paid them back, they shouldn't forgive loans period.

I'm all for maximum loan levels. Fuck what Johnny says, he doesn't need to go to the 45K/year school. He can go to CC and transfer to State Tech. I'm all for payment limits in the first 10 years - we shouldn't be bankrupting people who can't find a job ITE. But to forgive loans is ridiculous.

No one should have their debts forgiven, but all of these hidden fees and usurious rates that are causing the original principals on these loans to triple and quadruple are completely criminal. If you borrow 100K, you shouldn't owe 250K within a few years because you weren't in a position to make minimums at the time. These people should be on the hook for the principal they borrow, and a reasonable interest payment.

There are cases of people who have borrowed 30K, paid about 60K over the span of 10 years, and still owe 100K. If that's not messed up I don't know what is.

-MBP

In reply to ChuckyFinster
5/4/12
ChuckyFinster:

1. Forgive all capitalized interest and have none accrue during time in school (the Canada way i think or is that socialism?)

Everything about the US student loan systems screams mortgage crisis but at a slower rate (meaning that individual loans aren't quite as big as mortgages). Everyone is told to get an education, loans are easy to get, rising tuition leading to larger loans...bound to fall apart, better start buying CDSs on student loans or possibly private lenders (not sure if they exist since they don't in Canada).

Shout out to the Canada approach. Up here, universities are also subsidized and all the good ones are public. I think my whole undergraduate education cost $20,000 before scholarships and I paid off all my student loans with the money I made from a junior year SA role in IB.

In reply to manbearpig
5/5/12
manbearpig:
SECfinance:
SlikRick:

Within 6 months, I realized I made a major financial mistake. Since the damage was done, I figured I had to make the best of my situation.

The damage was far from done at that point. You could have transferred to your state U and saved a bunch of money. Obviously it's going to end up fine for you because you're hustling but to say this is a mistake.

I think everyone needs to keep things in perspective here. This is a forum full of potential or current investment bankers, traders, consultants, etc. You all have A-Type personalities and can amortize your debt in Excel within minutes. The average high school senior is just looking to get ahead in life. When your teachers are drilling the importance of college in your head, day in and day out, you feel like not going deems you as a failure. In turn, immature students with 2.0 GPAs end up paying 50K a year in tuition for no-name private schools. WSO types telling high school students that they should be more financially responsible is like an athlete telling an overweight person that all he has to do is eat less to lose weight. There's obviously a lot more to it than that.

This is true, but these people don't deserve to get their loans forgiven because they are idiots. Just like obese people don't deserve free lipo and gastric bypass because they are fat. It's an insult to everyone who was in their position but worked their ass off and paid off their debt.

Unless the government is also going to be giving straight cash to people who had loans but paid them back, they shouldn't forgive loans period.

I'm all for maximum loan levels. Fuck what Johnny says, he doesn't need to go to the 45K/year school. He can go to CC and transfer to State Tech. I'm all for payment limits in the first 10 years - we shouldn't be bankrupting people who can't find a job ITE. But to forgive loans is ridiculous.

No one should have their debts forgiven, but all of these hidden fees and usurious rates that are causing the original principals on these loans to triple and quadruple are completely criminal. If you borrow 100K, you shouldn't owe 250K within a few years because you weren't in a position to make minimums at the time. These people should be on the hook for the principal they borrow, and a reasonable interest payment.

There are cases of people who have borrowed 30K, paid about 60K over the span of 10 years, and still owe 100K. If that's not messed up I don't know what is.

Usurious rates? No credit ratings, no security interest and people are getting 3.4-6.8% loans? I mean C'mon.

If you cannot afford your student loans the government gives you a great options. Work for charity or non profit and in 10-15 years the remaining balance will be forgiven. You also have your monthly payments adjusted for your income level.

5/5/12

My parents didn't make a lot of money. But when I was young, like really young, they always told me they would make sure that no matter how expensive the school is, if I can get into a good school they would pay for it. My dad saved up from the time I was born to make sure I wouldn't have to take on any debt and they wouldn't have to compromise on my education. I know some people literally don't have the ability to save enough to do this, but my parents were very average in terms of total household income, and if they can do it, I'd imagine 75% of people can do it too. I never took on any debt in college despite a hefty 200k+ tuition bill (though a little bit cheaper since student aid helped pay for about 10% of this. We deserved more though, assholes), and my parents happily paid my way through college. That's what they were there to do, and I'll be forever thankful to them for it. We didn't go on many vacations, have a second home, a nice house, any of that shit. But when it came down to what was important they saved properly and were able to flip the bill for me. Now I'm able to return the favor.

Maybe this is why I've never been able to understand taking on enormous student loans. If you can't afford it, don't do it. But you should be able to afford it if it's something you value. Someone should be thinking about this shit years (decades) in advance. Thanks again mom and dad.

I hate victims who respect their executioners

In reply to TNA
5/5/12
TNA:
manbearpig:
SECfinance:
SlikRick:

Within 6 months, I realized I made a major financial mistake. Since the damage was done, I figured I had to make the best of my situation.

The damage was far from done at that point. You could have transferred to your state U and saved a bunch of money. Obviously it's going to end up fine for you because you're hustling but to say this is a mistake.

I think everyone needs to keep things in perspective here. This is a forum full of potential or current investment bankers, traders, consultants, etc. You all have A-Type personalities and can amortize your debt in Excel within minutes. The average high school senior is just looking to get ahead in life. When your teachers are drilling the importance of college in your head, day in and day out, you feel like not going deems you as a failure. In turn, immature students with 2.0 GPAs end up paying 50K a year in tuition for no-name private schools. WSO types telling high school students that they should be more financially responsible is like an athlete telling an overweight person that all he has to do is eat less to lose weight. There's obviously a lot more to it than that.

This is true, but these people don't deserve to get their loans forgiven because they are idiots. Just like obese people don't deserve free lipo and gastric bypass because they are fat. It's an insult to everyone who was in their position but worked their ass off and paid off their debt.

Unless the government is also going to be giving straight cash to people who had loans but paid them back, they shouldn't forgive loans period.

I'm all for maximum loan levels. Fuck what Johnny says, he doesn't need to go to the 45K/year school. He can go to CC and transfer to State Tech. I'm all for payment limits in the first 10 years - we shouldn't be bankrupting people who can't find a job ITE. But to forgive loans is ridiculous.

No one should have their debts forgiven, but all of these hidden fees and usurious rates that are causing the original principals on these loans to triple and quadruple are completely criminal. If you borrow 100K, you shouldn't owe 250K within a few years because you weren't in a position to make minimums at the time. These people should be on the hook for the principal they borrow, and a reasonable interest payment.

There are cases of people who have borrowed 30K, paid about 60K over the span of 10 years, and still owe 100K. If that's not messed up I don't know what is.

Usurious rates? No credit ratings, no security interest and people are getting 3.4-6.8% loans? I mean C'mon.

If you cannot afford your student loans the government gives you a great options. Work for charity or non profit and in 10-15 years the remaining balance will be forgiven. You also have your monthly payments adjusted for your income level.

Dude, those are just teaser rates. Some people get bumped up to 20 even 25%. That's not even factoring in absurd fees if you miss a payment. Yeah, you should't miss payments, but if you have to, you shouldn't be punished with several hundred dollar fines each time either.

-MBP

5/5/12

"I blame Sallie Mae for everything"

Here is the crux of the whole thing. Let's make it even more simple: "I BLAME".

No loans? No problem. Still want to go to school and get a quality education? Hmmmmm let me think about that. YES

Ok, here's what I'll do:
1. Determine to earn an education no matter what, no matter how long it takes.
2. Work as many shit part-time jobs as I need to, to put myself through school debt free.
3. Realize that blaming others for my own stupid personal crap never got anyone anywhere, least of all me.

PROBLEM SOLVED

How do I know? Because I'm applying numbers 1,2, and 3 in my own life right now. I will graduate with less than 15k in student debt because I chose to work my way through, taking as little debt as possible. And it's been worth it every step of the way.

I have no sympathy for people who screw themselves with debt obligations that they themselves CHOSE to accept. I do not believe my views are radical. On the contrary, they make the most sense if one chooses to take 100 percent responsibility for their own life.

So you wanna take debt? Student loans? Go for it! I'm not opposed to it by any means. I'm only opposed to it as it applies to me, myself, and I. Even the 15k that I have right now pisses me off for having taken them in a moment of weakness. But don't give me this crap sob story about blaming everyone and everything else in life but yourself for your own failure at life and finances.

Poor girl, hopefully she'll realize the immense freedom provided by taking responsibility for her own actions one day.
Poor girl, so messed up by the cancerous entitlement mentality of our generation.

No one deserves anything ever. You work. You earn. You win. Zero-sum game.

WreckEm Red Raiders

"Everything comes to those who hustle while they wait."
-Thomas Edison

5/6/12

I totally agree that the problem is financial education.. I came to US when I was 17 (with $40 in my pocket) .. took my SATs and was accepted to Stanford as well as a good state U. The thought of taking in 50k/year in debt to to go Stanford seemed insane to me.. so in fact i went to a community college for 2 years ($1000/year) after that transfered to a state school $6000/year, while working part time. I graduated with $7000 in debt and $5000 in CC debt.. Paid it off in the first year. Later went to get my MBA.
My wife was in almost the same situation, although she ended up going to med school, and now has $120k in debt from a grad school.. which is not a lot, with our current income.
Education is not a right, it's a privilege, there is no reason why we have so many future administrative assistants in universities.

In reply to moshennik
5/6/12
moshennik:

I totally agree that the problem is financial education.. I came to US when I was 17 (with $40 in my pocket) .. took my SATs and was accepted to Stanford as well as a good state U. The thought of taking in 50k/year in debt to to go Stanford seemed insane to me.. so in fact i went to a community college for 2 years ($1000/year) after that transfered to a state school $6000/year, while working part time. I graduated with $7000 in debt and $5000 in CC debt.. Paid it off in the first year. Later went to get my MBA.
My wife was in almost the same situation, although she ended up going to med school, and now has $120k in debt from a grad school.. which is not a lot, with our current income.
Education is not a right, it's a privilege, there is no reason why we have so many future administrative assistants in universities.

Ok. Stanford and the Ivies are free for anyone earning less than 70,000 a year. They're half-price for anyone earning around 150,000. So, with your $40, Stanford would've PAID YOU to come.

5/6/12

Seedy, huh? They offered a loan package to cover the tuitions and living expenses.. a small scholarship.. this was 1995..

In reply to moshennik
5/6/12
moshennik:

Seedy, huh? They offered a loan package to cover the tuitions and living expenses.. a small scholarship.. this was 1995..

Oh didn't catch that.
The majority of financial aid revisions happened around 2002...

5/6/12

lol, yeah.. i am old
but, i don't regret going to a state U..

In reply to moshennik
5/6/12
moshennik:

lol, yeah.. i am old
but, i don't regret going to a state U..

No one should. Great education, fewer pesky and annoying advisers, great environment. Also, if one wants to do undergrad business or engineering, few unis can beat or even compare to Berkeley, UT Austin, UVA, and Michigan, etc.

5/6/12

If you're whining about not being in the 1%, you're probably not cut out to be in the 1%.

In reply to rls
5/6/12
rls:

I should print t-shirts that read: "I'm short your student loan" in honor of Mr. Zuckerman. Just looked at some student loan ABS on Bloomberg- oh my. If I can find the appropriate CDS contracts, I'll make out like Paulson.

I laughed pretty hard at this one, and I owe 60k in student loans so it's ok.

In reply to WestCoastDeveloper
5/6/12
Nobama88:

How do we make money off this...

We all know it is going to implode.

ha ha...I was thinking the same thing.

These stories are prime examples for why the government should NOT subsidize higher education to the extent it currently does. For the most part these people would have been better off working in some industry not requiring a degree.

On another ironic note, if these people ever get their credit checked for a job I have a feeling this type of irresponsibility could easily result in an offer getting rescinded.

In reply to seedy underbelly
5/6/12
seedy underbelly:

Ok. Stanford and the Ivies are free for anyone earning less than 70,000 a year. They're half-price for anyone earning around 150,000. So, with your $40, Stanford would've PAID YOU to come.

This isn't entirely accurate. Some of the top schools that ostensibly have a cutoff below which you owe nothing actually require you to do a "work-study" for the first say 2k of your money, which means that you either work in the dining hall or take out a private student loan. Some treat divorced/separated parents differently, e.g. even if your fairly successful dad (say 200k/yr) skipped town ten years ago and is remarried with kids, the school might expect him to make a large contribution, and build that into your aid package. Some don't apply this program to international students, so even if you came to the US at six months and you don't know from anything else, you may not be eligible at all. The exceptions, nuances, etc go on and on.

This isn't to say that they aren't generous programs which are very well intended and do a lot of good. They just aren't as great as the colleges/universities themselves might advertise.

"There are three ways to make a living in this business: be first, be smarter, or cheat."

5/6/12

I personally decided not to pursue my PhD even though it would be fully funded because I didn't want to accrue an additional 4-5 years of interest on my $35k of undergraduate loans. People really need to think about the cost/reward of these education decisions. Don't write a check your post-graduation ass can't cash.

Rise early, work hard, strike oil.

5/6/12
In reply to ChEM3
5/7/12

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