Student Loan Debt Exceeds Credit Card Debt!
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Make no mistake about it education is a business and being a business they are in it to make money!
When the Depression hit, yes I said Depression NOT RECESSION, many people decided to ride it out by getting a degree. Rather than look for a job when there were no jobs they decided to pursue graduate degrees, law degrees, even culinary arts degrees. And just as in the past the financial aid offices opened their arms to almost everyone who had a pulse and wanted a student loan. Sure, and why not...student loans are backed by the government, sort of like Wall Street Bail Out Money! The colleges can't lose because we the taxpayers will guarantee the money if the student defaults on their debt. Because of this some schools have actually sought out and registered homeless people just to obtain student loans from the government. It's a complete scam on the American public.
The only losers in this game are the students who can't find jobs after incurring millions of dollars in debt and the taxpayers who will be tapped again to pay for the defaults.
The student loan scam is destined to be the next great credit default bubble bursting in our country!
We have been sold a bill of goods when it comes to higher education. We have had it pounded into our psyche that unless we go to college we are neanderthals, that we'll never get a decent job or amount to anything. Now, let's get something straight here, I went to college and I loved it. I had some student loan debt and paid it off. But, when I went to college my semester fees were $300.00 a semester at the California State University, a far cry from what they are now. And, I was able to get a job after graduating, something that is becoming more and more difficult. Money magazine reports that after adjusting for financial aid the amount American families pay for tuition has skyrocketed 439 percent since 1982!
According to one study done by the College Board one in five college students with bachelors degrees will not be able to pay their student loan debt. I believe the number is much higher.
Student loan debt is now much higher than credit card debt.
Moreover, student loan debt is not like credit card or unsecured debt, there is no statute of limitations on student loan debt and you cannot get it expunged in bankruptcy.
Who is benefiting from these student loans? The colleges and universities benefit as do the lenders (read banks) that are guaranteed their money. And who suffers? The taxpayers and low income students who will be saddled with enormous amounts of debt while trying to find a job that pays more than $10.00 an hour. How much more can we take as a country before we collapse from within?
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Prior to the crash of 2008 I had a friend who just finished law school, he always encouraged me to go to law school and it was something I seriously considered until I crunched the numbers. I would have to take out a minimum of $100,000 dollars in graduate student loans and that was only if I could get half of the money in free grants. At the time my friend was making around $300,000 dollars a year but worked 10 hours a day 7 days a week (and that is no exaggeration), his student loan was approximately $1,000 per month, nothing right?.easy to pay while making $300,000 a year! Well, guess what? He lost his $300,000 job and the only thing he could find was a job that still required him to work 70 to 80 hours a week but now he only receives $60,000 a year. That was what I was making as an administrative assistant in Manhattan! He still pays $1,000 dollars a month for his law degree and is poorer than most secretaries.
I have another friend who has racked up nearly a quarter of a million dollars in graduate student loans. She will never be able to find a job that will enable her to pay that debt off. I can't help but wonder how many more people are out there like my two friends.
If you think people owe a lot on personal credit cards, they are nothing when compared to student loans. And, what do you think is going to happen when all those people get their degrees and cannot obtain work?
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I know, it's just terrible and when you think of all the taxes that are coming on the young adults in the next few years, well it's a tragedy. I just can't imagine how we, as a nation, are going to come through this.
Thanks for commenting LillyGrillzit.
Brie what an eye opener. Fortunately my mom blessed us by paying for our kids to go to college. The deal was that they go to state schools where the tuition was not out of sight and that they worked on getting scholarships and grants to help out. My middle son has done just that and he graduates in May, yea! I am so grateful that Mom was able to do this (by the way she will be 99 this year) because with how the economy went there was no way we could send any of our 4 to college.
What a wonderful mother you have. Yeah, this is a big deal and a big problem I wouldn't be surprised if people committed suicide over this because there is no way out. Very very sad.
it is a very sad fact that most college graduates don't even get a job in their field of study. Buying int o the idea that a diploma is a guarantee when in reality it is a gamble. It is a hard thing for a young person to choose the direction of their life and of course as in anything, there are always predators laying in wait to take advantage. even those who are successful in their studies, and find great jobs in their field of study many times find themselves feeling empty and lost, because they chose to follow a course society or family laid out for them instead of following their dreams. An education is very important as long as it is seen as a means to acquiring the tools needed to live. great post, Brie, thank you.
I agree wholeheartedly. I really feel bad for these young adults. I mean most were not mature enough to see the ruse until it was too late. It's a sad state of affairs.
This is really a problem. My son has some issues with loans. It is good that he is making money but not as much as he used to make. Your attorney friend should get out of Dodge, I mean NYC, and get a job with a law firm elsewhere. Even if he is a public defender he could make something with lower overhead.
Well, he is pretty attached to NYC which includes his gf possibly fiance, so I don't think that will be happening soon.
I worked as a financial aid counselor and later as a loan manager for financial aid at a top university (very expensive university $45,000 a year). It is horrifying to see how many loans parents and students are willing to take out to pay for school. Even scarier is that students go to the student aid office requesting loans to pay off credit card debt, to purchase cars, etc...! Of course these should be denied but I doubt they all are. A counselor's duty is to paint a TRUE picture of what taking out a loan means and how much a loan will really cost. I was lucky to have a very ethical boss and mentor who pushed us to counsel and sway students away from debt. My boss also pushed the school to not allow credit card advertising on campus of any type. She was a bright woman and I learned a heck of a lot from her. The sad part is that I also learned that colleges benefit (INCENTIVES) from pushing loans on students. SAD SAD WORLD - STUDENTS DON'T STAND A CHANCE!!
NOTE: Most people don't know that a guarantor (the government) has the right to garnish wages without the need to sue (up to 15% of your income) if you default on a loan, they have the right to offset your tax refund, can take away your federal benefits (SS retirement benefits, Disability benefits) and can sue you indefinitely to recover the student loan debt. I hope all these people who have taken out so many loans don't ever see themselves in hardship!
As Dave Ramsey says "RUN!! WHEN YOU GET OFFERS FOR STUDENT LOANS AND CREDIT CARDS!!
Thanks for the article. WELL WRITTEN!!!
Thanks for these wonderful comments. I was really surprised at how few rights one has when it comes to student loans...it's terrible. I hope you rated it up!
I find the ballooning of university tuitions to be utterly disgusting - thanks so much for discussing this issue! Student loans are important resources for some, but people really need to think hard about whether they really must choose them over opting for less expensive educational institutions.
I agree I cannot think of any rational for the outrageous escalation in tuition and fees, certainly professor salaries haven't gone up that much. With the unemployment rate the way it is hopefully students will think twice.
Thanks for commenting Simone.
Young people are easy targets for scammers. I only achieved an associates degree in electronics. something like 4 out of 10 students never even finished THAT back in the day (1983). So if 30 or 40 percent of people never FINISH college... and 20 percent of the ones who FINISH cant get a job.. then young people would be well advised to go to a technical school and forget college degrees unless they know themselves to be OUTSTANDINGLY intelligent or gifted. Young people have not had to pay back any debt. It is VERY difficult to pay back even small amounts like $2000 dollars when your income is low. A student loan of 50K or 100K would make you a DEBT-SLAVE for most of the rest of your LIFE!!!!
I know, it's very scary.
It seems we needto be careful of everything these days, even jobs. I recently applied for a job and they wanted me to pay them, it was a scam.
Yes, when times are difficult the thieves multiply!
I don't know if you have read my latest hub on Wisdom Vs. Knowledge (The War Is On!) I touch on this very thing where the shift of emphasis is into getting an education instead of gaining wisdom. Education is now the mandate and the gov't has its hands all in it for control. It is the way of the world and all the commercials for people to go back to school and the ridiculous price to do so. People are mortaging their lives to do something that will get them a career and not just a job. You have a great hub here, sister.
Yes I agree, everything is about control...what we have to do is remove the shackles...every single last one of them. Unfortunately, the world is dancing to the tune of the pied piper!
I have been out of grad school for about a year and am working in my field. I love my job but if I was 18 I am not sure I would do it all again. I am not consistently full time and that is hard with a decently sized student loan payment (only 9.5 yrs left!)
So many adults are beginning to think that college is not the answer...but then they still tell high schoolers to go!! I don't envy them though, it's hard to get a job with a degree so I can imagine how tricky it would be without. Once you get to college, they convince you that with a degree you can do anything!! Then they convince you to go to grad school because you can't do anything with the degree they told you to get ;)
I feel for you Becky. I think that a lot of it is just a big scam (but then I have my degree).
While this hub is very informative, I wholeheartedly DISAGREE with some of the comments here. College is a requirement for any "thinking" type profession, having been in a position to hire/fire people, if an applicant did not have a degree, I simply would not hire them. It doesn't matter if their degree was in Underwater Basket Weaving, it demonstrates commitment & the ability to meet deadlines. Also, I have no problem with the rise in tuition costs. College is NOT for everyone and taxpayers should not be on the hook for furnishing a higher education. This does not even get into the problem with many, many immigrants coming to this country just for a taxpayer funded education. These are people who never paid a CENT in taxes and many are illegals. If people are so concerned with costs, reel in the OUTRAGEOUS salaries & benefits people like the UC Regents demand. Public employees should NOT be making $500k/year on the taxpayers back! Let alone the rediculous retirements/pensions.
You are entitled to you opinion, however, I think if something is not done to fix this problem we are going to have a much larger problem on our hands....the bankruptcy of America.
I myself have a student loan which I recieved in 1998 for 6,500, I have been paying on this for years. I had my taxes guarnished one year and 10% of my paycheck has been taken for years. Last time I checked I still owed over 10,000.. Paying for years and still owe more then I borred is crazy but what can I do....
There isn't much you can do...the only thing is to get the word out to help others not get into the situation you are in.
Thanks for helping me locate this hub. I know now that I got off lucky..my loan is paid off. That was a feat in itself. Wouldn't you know that I had next to no help in getting the balance paid in one lump sum. My CSU tuition was only $100 per semester when I started.
You're welcome...please post on facebook if you think it will help other.
Thanks the elected officials like Diane fienstien and her husband who was banned from wall street. She got her crock husband a job as a regent. In true wall street greed he saw a way to scam tax dollars. He bought for profit school and much of the debt you speak if from school that are really diploma mills. They target minorities and single moms. The regents in California are putting millions of UC dollars into for profit schools. Running of the cost of a UC and cutting classes to force more into for profits.
This whole deal is fraud just like the mortgage scams. Do a real report call di fi out on this call her husban out. Call the regents out get the fired for their greed.
What we will really do is nothing I bet 99% read this and don't do thing.
I'm hoping at least one person reads this and then doesn't fall into the trap. Thanks for writing.
This is an amazingly devious way to move wealth from the lower and middle classes to the wealthy. The sale of dreams. Create a marvelous picture of life by use of the media, all media, and promise participation if only people will train themselves in any area of interest by going to school. Then loan them the money to do so and step back. Create a dream, offer a way to get there. Politically, it was always, create a problem, then step forward and offer a solution; leader for life. All we really have to do is walk away from the offer. I've been doing it for 40 years. It works great.
Yes, it has been very successful unfortunately.
College is only a ripoff if you are a retard and don't get a real degree and take over 6 years to get it.
Also for those of you who though loans were a great idea instead of working while you were in school, debt added up fast didn't it.
I disagree, college is a ripoff if you've been given false information about how you can get this wonderful job with a degree and then find that isn't true.
If someone is nuts don't give them a loan.
I just had my tax refund offset for a student loan from 1991. I put in a request for hardship and the dept of education denied me because " its now paid in ful" what has that have to do with hardship?
The tax laws are not for YOUR benefit, they are for the benefit of our owners...
The Red Pill 101
Awesome hob I just finish one about my own experience and the nightmare college is.
Lester Diaz
LillyGrillzit Level 1 Commenter 16 months ago
This Hub is spot on! Once a person buys into the dream, if that dream doesn't come true, tough poop. I started with 24,000.00 in loans in 1990. I have paid some, but the inability to land that wonderful career, means working for the same wages people who have no college. Deferment and longevity has inched this debt to almost 80G. What to do, what to do?
Another point. With the mortgage meltdown, and other debts, consumers have the ability to file bankruptcy relief, for those who bought into the "dream" there is no relief. The Government guarantees they will always seek to collect and attach monies, with no way out for borrowers.