Better Education On Student Loans: Priceless!

24 08 2008

See the NYT.

MOST people struggling to pay off their student loans keep quiet about it. They do not want to acknowledge that, perhaps in a fit of naïve, youthful optimism, they borrowed more than they could handle. . .
Usually, people do not learn just how powerfully the law protects student loans until something goes unexpectedly wrong in their lives.

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3 responses

26 08 2008
TC

The ability for the debtor to negotiate by using the threat of declaring bankruptcy as a bargaining chip was the last thing keeping loans in general fair. It’s the only reason a bank EVER gave someone a break on a loan. With that gone, there’s no reason for a business to cut anyone a break. Going after you only costs a small fraction off the top selling your loan to collections, where cutting you a deal and making it easier to pay could cost them 20-30% of the interest they expect to collect over the life of the loan.

These sharks are sanctioned to such a degree by the government that you can hardly tell where the federal forms stop and the wells fargo forms start. You’ll find documents that actually transition from government request to private loan offer without any gap in between. Throw in the factor of being 18 years old and thinking about these things for the first time and you have the makings of our next big financial crisis.

26 08 2008
TC

If you weren’t already convinced that these organizations are among the worst grade of shark, check this out.

http://consumerist.com/5041978/wells-fargo-forces-you-to-pay-off-loans-costliest-way-possible

27 08 2008
JJ

Thanks, TC — I never really thought of bankruptcy that way but it makes perfect sense .

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