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“They Should Have Told Me . . . ” Student Loan Costs

Student Loan Costs

1.3 trillion dollar issues do not just go away, and

student loan costs - money!!!
student loan costs

that is the amount of student loans owed to the

federal government.

A prospective client called me today, he and his wife were graduated about a year ago.

Both have private and public student loans, though she has a government job and is on income based repayment plans for the government loans, with the prospect of forgiveness of any balance if she keeps her job for ten years, per the Public Service Loan Forgiveness provisions.

“I wish they had told us how much it would really cost.”  he said.

$1,400 per month.  Enough for a nice house payment, but, like tens of thousands, if not more, they cannot afford both.

As Glenn Reynolds of Instapundit is fond of saying, something that cannot last forever, won’t.

From the Investors’ Business Daily story linked to above:

The problem is, by subsidizing college with cheap loans, the government only drives the price of tuition higher. Colleges have hooked up to the government student-loan gravy train as never before, paying lavish salaries for do-nothing administrators and incompetent professors who in earlier, more-disciplined times would have been laughed out of the academy.

Yet, student loan cost keeps escalating.

last year average federal student loan debt stood at $30,650, a 17% rise since just 2013.

These are frequent themes for this here blog, the colleges take the money, risk free, whether grads get jobs or not. The government keeps lending, and student loan cost keeps getting worse.

And lending more money results in, more defaults.

In a study released last week, the Consumer Federation of America found that millions of people were in arrears on $137 billion in federal student loans in the first nine months of 2016, an increase of 14% from 2015

What Is the Way Out?

Not simple, that is for sure.

Whatever your views on the sanctity of contract, or, that a generation of Americans has been sold a bill of goods on the value of college, that 1.3 trillion dollars of student loan debt is NOT getting repaid.

So, stopping the bleeding is usually a good idea.  The current higher education model is undergoing, and will undergo, vast changes due to online access to knowledge, and, teachers.

My friend Paul Jacob writes about one of the alternatives, Praxis.  I have a nephew who went through the program and loved it.

We should not leave behind those stuck with the student loan cost.

Bankruptcy laws need to be changed.

Student Loan Bubble Update

I long for the day when the Student Loan Bubble Update is good news. Let’s lead with the surprise: According to the survey of 500 college students by LendEDU, a private firm that connects students and their families with student loans and loan refinancing, almost half of those responded that they believe they would be… Continue Reading

Bankruptcy Discharge Of Student Loans

Folks keep telling me that Bankruptcy Discharge Of Student Loans does not/can not happen. Even a lawyer friend I was speaking to last week. “What?  You can get rid of student loans in bankruptcy?” Uh, yes.  Not automatically.  Not easily.  But, yes, you can. Chapter 7 Discharge of Student Loans When a bankruptcy case is… Continue Reading

Navient Again – Student Loan Servicers

Sallie Mae acquired such a bad reputation that it changed its name to Navient. But the service has not improved, as Navient is at the center of the Student Loan Servicers Mess. What Do Student Loan Servicers Do? Here is the Department of Education definition of Student Loan Servicer: A l(student) oan servicer is a company… Continue Reading

Navient & Student Loan News

Navient, formerly Sallie Mae, still on a  losing streak. Navient Shahien Nasiripour writes frequently for Bloomberg on student loan issues. So there is lots of material. Navient Corp. lost out on a lucrative government contract to collect on defaulted federal student loans late last week, disappointing previously optimistic investors. The company has collected on such debt for… Continue Reading

Student Loans And Politics

Bernie Sanders wanted free college for everyone. Well, somebody would be paying, just, not the students. The Obama administration does not like for profit colleges, among other for-profit entities it dislikes. New rules are supposed to make it easier to get rid of student loans incurred to attend fraudulent colleges/programs. President elect Trump, a big… Continue Reading

What Is Undue Hardship?

Most courts apply the Brunner test to determine whether student loan debts are dischargeable in bankruptcy. The bankruptcy code provides that student loan debt is NOT dischargeable in bankruptcy unless the debtor can prove it would be an undue hardship for the debtor to have to repay the student loan debt. So, it would be an undue… Continue Reading

Where Do Student Loans Get You?

Couple of student loan stories out today that caught my eye. College Cost Too Much Uh, yeah.  Lots have written about how the flood of student loans from the government the last decade plus has pushed college costs up way higher then the inflation rate. We spent 3% of our national output on, which is… Continue Reading