Community | March 14, 2009 | 7 comments

The Case Against the Student Loan Industry

source: http://www.boston.com/ae/books/articles/2009/03/12/the_case_against_student_loan_lenders/

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DeliaTheArtist
"If a lender makes a loan and the borrower repays it with interest, the lender profits. If the borrower can't repay, the lender loses out. It's simple finance, or so you doubtless think. Silly you.

For the student loan industry, the reality is the opposite: Lenders hope their borrowers default, because they actually make more money that way. Not only can they charge usurious interest, but they also get to bury defaulted borrowers with punishing penalties and fees. Moreover, student loans are the only loans for which bankruptcy protection is prohibited. Pile on collection fees from agencies assigned to chase and harass borrowers for what they owe, and repayments can inflate to several times the original balance."


More at link, referencing a book by Alan Michael Collinge about this subject! I'm invovled in an art project all about student loan debt that goes up in April and I think it's affecting many people today especially nowadays! Do you have student loan debt? How do you feel about it?
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    Community,   Money
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    News,  Economy,  Government,  Money,  3 more
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7 comments // The Case Against the Student Loan Industry

  • Crissy8
  • cybexg
    • 0
      cybexg  

    • The best solution I have heard is to allow chapter 7 bankruptcy to discharge student debt, chapter 13 should be allowed to rewrite the debt (payment schedule).

      This way, those who can pay back would have to, those who can't could be discharged, those who can pay part, would pay part.

    • 3 years ago
  • billssqueeze
    • 0
      billssqueeze  

    • don't put all your eggs in one basket, and by that I mean so as not to think all of higher learning should be gleaned from a mere university

    • 3 years ago
  • smooth_pelican
    • 0
      smooth_pelican  

    • The way I see it is if I'm still paying for my college education after I've graduated, then I can still go to that college and use their facilities and sit in on what ever class I want. I mean after all I am still paying for it.

    • 3 years ago
  • jubal
  • anikhanj
    • 0
      anikhanj  

    • The real problem is the cost of college increasing every single year, and the government helping less and less for every increase.

      I worked at the financial aid office for some time. It's a broken, disastrous system that is putting hard workers in the poor house.

      There's nothing worse than watching a student working on a history major get $12,000 in free grants per year, while an engineering major (like myself) has to take out $10,000 in loans because his/her parents "make too much", even though they don't contribute to their child's education.

    • 3 years ago
  • jubal
    • 0
      jubal  

    • I have a large balance of Student loan debt, but I am on the income contingent repayment plan. At this time my payment is only $5 per month on $50K. Once my income goes up in the future I will probably have to pay a much higher payments, maybe as much as $500 per month.

      I think the real danger is to consolidate your student loans with a private company. Keep your loans with the Department of Education so you have the best options for repayment, rehabilitating defaulted loans, and loan forgiveness.

      Private companies are not going to offer you those options.

    • 3 years ago
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