Monthly Archives: September 2011

The Truth About Student Loans

American youth has been sold a bill of goods, get that college education, you will make more money, it will pay off in the long term, buy now, pay later, get student loans!

Lenders even market to unemployed people, borrow our student loan, get that degree that leads to employment!

Yet, more college graduates are filing for bankruptcy.

So, where was that great job?

What if you cannot afford to even make the student loan payments?

Many college grads move back home, because they cannot afford both rent and student loan payments.

What if you already live with the folks, a situation neither of you prefers, and still have no income?

How about bankruptcy?

NOT.

Unless you can prove, in court, that repayment would be an undue hardship for you, you cannot discharge student loan debt in bankruptcy.

Even in a Chapter 13 bankruptcy, a payment plan bankruptcy, most courts require that you lump student loan debt in with credit cards and the rest of your unsecured debt.

That is, you cannot provide for 100% payment, or even staying current on, student loan debt.

So, you can make all your Chapter 13 plan payments, and, at the end, owe more on the student loans than when you started, because you are likely to have late fees and default interest rates added on.

The amount of student loan debt now exceeds the amount of credit card debt in America.

Only most of it is in default or deferment.

Many people keep taking a class every semester just to stay out of collection, and keep getting deferments.

The truth is, a college education is not a right, it is not for everyone, it does not increase everyone’s lifetime income.

Your degree may help you get a job over someone with only a high school diploma, but, these days, there may well be someone more over-qualified, with a master’s degree, getting that job ahead of you.

This means, the truth about student loans is, the loans are frequently not worth it, and you should think long and hard before signing up for one.

You are better off going to the less expensive school you can afford than the big name school that you need to borrow to pay for.

The Truth About Student Loans

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Are College Diplomas Worth The Money?

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