The Truth About Student Loans

[keepsmiling]

I think it may end up being cheaper if I eventually allow my wages to be garnished for student loans. Has anyone seen this before or tried it?

Pretty sure treehugger is doing just that. Haven't seen him around for a while. Tree, are you out there somewhere?

[MSbklawyer]

This is so unfair. Schools encourage students to take out the maximum amount and then once they graduate they cannot find the jobs to repay them. Congress needs to allow student loans to be discharged in bk. $1 trillion in student loan debt in this country-don't you think that's a problem???

They also need to require measurable academic progress and performance in a field of study likely to enable the student to earn the money to pay the loans back.

If you go in for $200,000 to get a master of divinity at Harvard, what's the liklihood that you'll ever be able to pay it back? Why does everyone except the government bureaucrats setting the standards for making the loans, know the answer to this question?

[MSbklawyer]

But those folks will *eventually* go through probate, so if there is anything in cupboard, the creditors will get to confiscate it - and by that time, the magic of compound interest (and fees) will make the debt larger than any regular person's estate.

I wonder, though, if a 401K or IRA of a student debtor going to a beneficiary would be confiscated.

If I'm not mistaken, student loans are discharged at death. They can't go after the estate's assets.

[HHM]

If I'm not mistaken, student loans are discharged at death. They can't go after the estate's assets.

I don't know if that is true. It may be true of Federally Guaranteed Loans (that fact seems to be floating around in my head), but like other debts, it is certainly not true of private student loans.

[wikkibird]

Question... We are converting from a 13 to a 7 and we go to court on the 15th. I know we had to list all debt in our bankruptcy, including our student loans, but I'm curious about something... on the Periodic Debtor Report that lists where our payments went in payback to our credits over the last year, there are two lines for the US Department of Education, Claim #38 and Claim #50. The class on both of them are listed as Student Loan, but on one, it lists under the Scheduled or Allowed column $20,537.00. The Claim Amount is $30,136.24. Under the Amount Paid is $245.99. The other has $0 for Scheduled or Allowed, but under the Claim Amount is $20,769.85. The Amount Paid is $169.53. So.... were these included in our bankruptcy then? Are they going to be discharged when it converts? I've asked my lawyer, but no response yet, so I was curious... :-)

[JessMN]

wikkibird, you'll get a better response if you start a new thread...

[artid55]

That's right. It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in education. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy.

[joshuagraham]

If I'm not mistaken, student loans are discharged at death. They can't go after the estate's assets.

According to this article, you are mistaken.

http://blog.credit.com/2011/02/struggling-with-student-loans-even-after-death/

It wouldn't make sense that a student loan, which is harder to discharge than a regular loan, would be easier to avoid in probate.

[betsyboop]

Statistics are misleading

The percentage of discharges is low because the percentage of people that proactively file the appropriate adversary paperwork to get their loan discharged is low. The media has done a good job in making people think their loan will never get discharged so only a small miniscule percentage actually try.

[betsyboop]

Private loans follow the statute of limitations for the state you live in. Federal loan have no statute of limitations. They will follow you beyond the grave.

[bcohen]

Yes it true but if students choose a reliable lender for taking a loan then it can not be a very difficult task. Reliable lender always try to present easy terms.

What??! Please take your thinly-disguised attempt to advertise your fraudulent loan company elsewhere. It is rude to post such drivel on someone's thread.

[gml120]

Exactly bcohen - I feel like at least with a personal (non-education) loan you would actually have something tangible after taking out the loan (ie car, vacation, home repairs). With these private student loans, you really don't get anything you can see or enjoy especially since the job market is so bad you can't even look at your piece of paper on the wall of your cubicle and think, "Man, I'm sure glad I went to college so I can have this job." It's more like, I hope this thing burns when I run out of heat this winter because the job I have only pays the rent.

I also feel like colleges are bordering on fraud when their purpose of being is all about providing an avenue to a good job and then you complete whatever they say is required, money, passing tests, taking all those classes that are mandatory but unrelated to your field of study and then you get out and what you worked for doesn't exist. It's like hiring a company to educate you for the purpose of training you for something other than a job you could have got without the degree. And I just don't see that as happening in most cases any more.