Why Do Student Loan Borrowers Default?

On Monday, we shared the results of a two-year Senate investigation into how much federal money is going to for-profit colleges, and what kind of return students and society as a whole are getting on that investment. (Answers: $32 billion, and a pretty terrible return on that investment.) A study that the National Consumer Law Center released yesterday shows the college bubble from a different perspective: that of student loan borrowers who have gone into default. It’s not pleasant.

The NCLC gave very detailed surveys to forty student loan borrowers in default. Their sample size is much too small to draw definitive conclusions, but is still revealing. Predictably, 80% of the survey participants were unemployed. 65% received some form of public assistance. 53% of them dropped out of their programs, and 65% of students attended at least one for-profit institution. 69% of them were first-generation college enrollees.

We knew all of that, though. The revealing and scary part of the NCLC’s survey results is how little borrowers seem to know about their loans. Many weren’t aware that they were in default. (They admittd that was because they may have ignored important-looking letters and ducked more than a few phone calls.) About half said that they shouldn’t have to pay their debt back. 90% of the borrowers who said this had attended for-profit colleges. It sort of makes sense that the students of low socioeconomic status that for-profit colleges aggressively recruit might believe they don’t have to pay back loans for a degree that they’re unlikely to finish, can’t transfer credits elsewhere, and and their education won’t help them get a job even if they do complete the program.

The Student Loan Default Trap [Student Loan Borrower Assistance]

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  1. JollySith says:

    The photo says it all. Debt slavery is such a stupid term. Because having to pay back the money you chose to borrow is exactly the same as being kidnapped from your home, ripped away from everything you knew and being forced into a life of labor.
    But at least the photo jives with the tone of the article, where 50% of deadbeats who think that ignoring phone calls and letters means that they should not have to repay their loans

    • thomwithanh says:

      Debt slavery would be if you were thrown in jail for not paying up

    • JEDIDIAH says:

      The debt in question can’t be discharged. That alters the situation a bit and does make it quite a bit more like indentured servitude than your typical sorts of debts like credit cards, house, or car.

      Your entire screed could be applied to any form of indentured servitude.

      • vliam says:

        Can’t be discharged and can ruin your credit score making you ineligible for hire by many employers.

        Great system for sustaining the perpetual poverty machine.

        • bbf says:

          sarcasm on
          Yes, yes, because one should always be able to get out of paying back all the money one owes, it’s the American way. Holding people responsible for debts they VOLUNTARILY chose to take on is definitely “sustaining the perpetual poverty machine.”

          The students that WORKED their way through college are the “1%” that are keeping the lazy bastards that make up the 99% down in the ghettos. :rolleyes:
          sarcasm off

          Honestly, the bankruptcy laws that allow debt to be discharged has helped people like Donald Trump way more than your average American.

  2. akronharry says:

    It says that borrowers knowingly took the money and when it didn’t work out they said “Why bother, the goverment will have my back and forgive the loan”. More and more, people are spiraling towards stupidity and extreme self-entitlement.
    They will also be the first ones to say that they never had a chance to succeed and blame it on others.
    In addition, pass some type of law that for-profit institutions cannot charge more than the average price the public university charges a student in that state. Doubt that will happen though. Too many bribes (I mean donations) given out to our finest politicians.

    • TuxthePenguin says:

      Actually, that might cause tuition to rise faster as traditional schools increase their tuition. The distinction between for-profit and traditional colleges is almost laughable considering that many of the rules being pushed on for-profit would make the traditional schools equally as guilty.

      • longdvsn says:

        It’s laughable that you consider there to be little distinction between for-profit and non-profit/traditional colleges.

        Spending on marketing: 40% or more vs 1%, ‘sales’ department (essentially) vs admissions department, under 10% graduation vs 70% graduation rate, Huge differences in post-graduation employment rates (and even among those with a job, huge differences in salary)…all of this leading to very striking differences in loan default rates.

        I almost think of for-profit schools as a lottery. They target the less than intelligent, poor, desperate, or some combination of these…and only a tiny fraction ‘win’ and come out ahead.

        • TuxthePenguin says:

          So for sales and advertising, do you count all the football programs, alumni events, etc to be included in that number? Do you think Boise State would be as popular as it is now if not for the football team?

          Are there differences – yes. But are those differences due to the students attending (less affluent, less likely to be white) or to the structure of the school itself? How do the bottom 20% of schools in the nation compare to for-profit schools?

          • longdvsn says:

            To give you an example…NC State University (I live in Raleigh, NC – so let’s use that as an example) spent $53 million of nearly $1.2 billion in total operating expenses in 2011 on NCAA athletics (all 23 NCAA sports they participate in). That’s less than 5% of their expenses where on sports…and doesn’t account for the revenues brought in by those sporting events or alumni donations because of those sporting events.
            source: 2011 financial report

            Alumni events are designed to bring in alumni donations…I would bet that at any university, these operate safely in the black.

            …keep trying…you have a long way to go to add up to 40(plus)%. For profit institutions are using student tuition and government financial aid money to pay for marketing instead of on instruction and student benefits – very different from non-profit universities where all or nearly all tuition and government financial aid goes right back to education.

    • Chmeeee says:

      “More and more, people are spiraling towards stupidity”‘

      No they are not. Do you think you are the first person to come up with the amazing revelation that “People are getting stupid these days?” No, they are just finding more and interesting ways with the internet to convey the stupidity of human nature to you.

      • akronharry says:

        So you are saying that older generations also blew off their student loans, but with the advent of the internet, we are more aware of this issue? Not sure if this is what you mean, but if so, I disagree with you. If you meant that there were stupid paople back then, I agree. There are, were and always will be be people that are stupid and play the system which eventually (hopefully) bites them in the ass.

        • Chmeeee says:

          Actually yes. The crazy rules surrounding student loans are in place due to the high number of people that would graduate college, declare bankruptcy, and walk away from their student loans. Apparently this was a popular thing in the 70s.

          You can repossess a car, you can foreclose on a house, but you can’t take the education back.

          • altrocks says:

            It wasn’t actually all that popular, but the student loan providers said it was, and that it was a concern. Basically, they lied to get the system rigged in their favor. Now you can never discharge a student loan unless the provider decides to allow it, even upon death.

    • Mambru says:

      I think this might be taken out of context. I beleieve they mean that if I took a 50K loan for classes and only use say 10K and drop out. I should be resposnible for 10K while the other 40K is returned to the bank instead of the college keep in it for themselves

    • Blueskylaw says:

      “More and more, people are spiraling towards stupidity and extreme self-entitlement”

      I believe that people get this sense of extreme self-entitlement from corporations whose sole purpose is to take your money at any cost and when that fails to get it from the government.

      • matlock expressway says:

        This is true.

        For every time I hear about a student trying to get out of student loan debt, I probably hear of about a dozen corporations declaring bankruptcy after their pathetic business plan ran out of steam.

        The only difference is that said corporations are a far bigger drain on society.

  3. TuxthePenguin says:

    I find it kind of funny that we’re see so much anti-for-profit colleges who are willing to take those that traditional colleges will not (full disclosure – my cousin is attending Phoenix right now and I did express concerns). Its the same logic as with subprime lending and payday lenders – no one else will fill that void in that community. So if we control for lower SES and such, I wonder what the default rate is?

    More, why aren’t all these rules we’re throwing at for-profit schools also be applied to traditional colleges? I’m sure there are for-profit colleges with better outcomes than some traditional colleges. But ultimately it comes down to one thing: the costs are out of control.

    Whether or not you want to argue that student loans are fueling that increase (I think they are – why control the price when people will borrow to get it easily?) we need to sit back and look at what all colleges are spending their money on. Used to be the campus gym made apartment gyms look nice. Are we perhaps paying the tenured staff too much? Where can there be made cuts that will not harm the educational purpose of the university? Do we need students to take 2 years of “leveling” courses to create well-rounded students? Could there be another option? We’re too myopic about higher ed and we need to look at all options.

    • az123 says:

      They are looking at applying some of the rules to public universities, though not all of them and that is not the case yet. In both public and private the big issue is the cost of the loans and education to the potential income level, meaning you can spend way more than you will ever make to get a degree, but nobody wants to tell you that.

      The difference is that the for profit schools go recruit people and convince them they need to get an education and often charge them far more than the education is worth (based on the income level of job you can get with the degree). Public universities tend not to go out and take anyone who can qualify for a loan or write a check, thus providing some additional potential for the students to graduate and perhaps get a job to pay back the loan.

      I do fully agree that the ease of loans is fueling cost increases on both sides of the education system and they need to put that to a stop. I always liked limiting total loans based on the average potential income of your degree program.

      • Loias supports harsher punishments against corporations says:

        As noted in the original article yesterday, for-profit schools tend to spend a significant portion of their profits on advertising and marketing, where-as public schools spend a small amount.

        I propose capping spending the same way we cap health insurers’ spending – a specified percentage of income MUST go toward the education of the students, otherwise students receive a refund.

        • cactus jack says:

          Then I propose that they come up with a way to ensure that student loan money actually gets used for tuition, books, and housing, rather than Xboxes, drinks at the bar, Iphones, and other random crap.

        • TuxthePenguin says:

          “I propose capping spending the same way we cap health insurers’ spending – a specified percentage of income MUST go toward the education of the students, otherwise students receive a refund.”

          So what falls under “education” and what falls under marketing? Where should a school’s football program fall under? What about alumni events? Traditional colleges have a host of built-in benefits (legacies, as well) that for-profit schools don’t. But if there is a rule good enough for for-profit schools, its good enough for all schools. But instead of doing it by the entire entity, do it by major/department.

          • AtlantaCPA says:

            Personally I think all the examples you gave should be considered marketing (football and alumni stuff). The next question is what about alumni donations, since they are not federal money can they go toward football? Seems like yes. So in the end we’re back to for-profit schools spending tons of federal money on marketing vs nonprofits spending very little if any.

            • TuxthePenguin says:

              If alumni money wouldn’t be counted, then why would any tuition be counted as well? If I can attend DeVry without loans, should my payments there be excluded?

              We’re down to splitting hairs and making exceptions from exceptions. Easier to say “here are the metrics we will grade everyone on…” and include things like average student debt compared to average student five-year income, graduation rates, etc. Ignore the way the college spends its money – we measure its results. Perhaps DeVry can spend 50% of their money on marketting, but if it can make it work, all the better.

              We’d also need to break it down by location – a DeVry in Texas might have very different results than one in Idaho. (I use DeVry because its easier to type the Phoenix. Stupid o-e switch…)

            • tmbggirl says:

              The set up I’ve typically seen is when alums donate to a college, they can earmark their donation for a certain area (athletic scholarships, School of Arts and Sciences, LGBT Center, etc), or they can have their donation go to a general fund (to be used however the university sees fit).

        • frodolives35 says:

          Don’t forget that free laptop and iphone with every new new sign up
          .

    • kanenas says:

      “I find it kind of funny that we’re see so much anti-for-profit colleges who are willing to take those that traditional colleges will not …”

      Perhaps these students, or most of them, might want to look back at the reasons why traditional colleges won’t accept them and why for-profit colleges will. It just seems to me that for-profit colleges will accept any schlep with a pulse as long as they can sign on the dotted line for financial aid. They seem to simply not care.

      Unfortunately, it will be those persons who are academically disinclined, but who for some reason want a degree, who will be suckered into going to a for-profit school. The smarter students know to avoid for-profit schools and will generally work hard to get into a traditional school instead.

  4. Dagny Taggart says:

    When I was a college student in the ’80′s, I was told that the federal loan money that a college had available to distribute as government-backed loans came from the repayment of loans by previous students of that school. In other words, if loans given to that school’s students weren’t paid back, the school would have nothing to loan out to new students. Apparently that model is not being followed any more. It would make these for-profit schools work harder to make sure their students are successful.

    • AtlantaCPA says:

      I hadn’t heard that but I’ve always thought that’s how it should work. I actually came to the comments to say something like that:

      Imagine if there was no federal program and each school had to loan money to students for tuition. These “for-profit” schools wouldn’t be making any profit at all and would go out of business in a couple of semesters. I’m not in favor of making this a reality but the Fed program should be restructured to say something like “we’re not going to loan your students any more money until they improve their repayment history”.

      • huadpe says:

        I am in favor of making your pie-in-the-sky program a reality. What they should do is offer grant aid to all students, perhaps asymptotically diminishing with income, and no loan guarantees at all. If you want to borrow money, it’s at the lender’s risk, and the loan should be fully bankruptable just like any other debt. Unlimited non-bankruptable debt is fueling this bubble, and it’s a deliberate policy choice. An actual free market in education would shut these schools down in a second.

  5. Invader Zim says:

    Mailed paperwork seldom ever gets to them. Its true. I have mailed back the paperwork for a ICB loan application 14 times in the last year and a half. Even though I am clearly using the address provided to me on the forms, they seldom appear to get them. When they do, they just send me yet another one to fill out and mail and it goes just like this, over and over, again. Well, call you say. Sure and call I did (and do) and it resulted in yet more paper work asking for exactly all the same information that I had already mailed over and over again. It just goes on and on and on. So why are student having issues with their loans well maybe the question is why cant the government sponsored educational loan system receive mail, and where, oh where, is all of our mail going. It never comes back? Is the federal direct Ed located next to a black hole or is there just a lot of stamped trash laying about?

    • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

      Their mailman is hoarding mail, and when he gets fired/dies/gets sick, someone will find sacks and sacks of undelivered mail in his garage. Including your forms :)

  6. Smiling says:

    Do the borrowers not know about the new income based repayment? If your loans are high in comparison to your income, you are eligible. The payment is capped at a percentage of your income and the remainder is forgiven after 25 years, 10 if you are in public service. I understand many are unemployed, but there is forbearance/deferment for that. with IBR, people with a lot of debt should still be able to have affordable payments.

    • iblamehistory says:

      Usually I’m the only one I see in these threads talking about this! IBR is currently saving my ass. I have every intention of paying back everything I can within 25 years (should be 10, because my master’s is in social work, but I don’t expect to find any job let alone one in my field) but when I’m unemployed 14 months after graduation, I can’t be paying anything yet.

      I was always appalled at the fact that NOBODY in my graduate program knew about IBR, when it was the deciding factor in me going to school: I knew I’d have to borrow a lot and I wanted something to fall back on if I couldn’t find a job immediately. I ended up needing to educate my adviser about IBR, in addition to every student who mentioned loan anxiety to me. Literally nobody had heard of it and I still see that very few people do.

      • roguemarvel says:

        I also sing the praises of IBR, its how we can afford to pay my husbands student loans (just $180 a month rather then $1200 a month). However, only federal loans qualify, most of the people I know who are in trouble with loans have a lot of private loans as well. The federal government will only give so much especially for undergrad and many have to turn to private loans.

        I know another couple who both went to a for profit school and even tho they make about $10,000 a year more then we do right now, they can barley make their loan payments with their parents help while my husband and I live fairly comfortable. Its all just because all of ours are federal and most of theirs are private. They even owe less money then we do, its terrible. Once I put that in perspective, I ask my friends what type of loans they have before I blabber on about IBC

  7. 180CS says:

    How about this…

    STOP GIVING LOANS TO STUDENTS AT FOR PROFIT COLLEGES.

  8. Rexy does not like the new system says:

    I have some student loans. Thankfully, first payment isn’t due until 2016 and I can get an additional deferment (with interest) if I still don’t have a job by then. It’s not like I don’t want to pay them off – I want to get rid of them ASAP. But, when you don’t have a job and nobody’s hiring, that’s hard to do.

    As for people not knowing how much they owe, it’s believable. I had to jump through a lot of hoops to find out the amount I owed.

  9. Evil_Otto would rather pay taxes than make someone else rich says:

    Contemporary students are still being sold the old model of “if you go to college, work hard, get good grades, you’ll be at an advantage when you enter the work force.”

    BULL. SHIT.

    There should be a mandatory class in high school that is titled something like “Reality 101″. A possible curriculum:

    1. Hard work does not get you anything but more hard work.
    2. Your employer will use any and all methods and strategies (legal, truthful, or otherwise) to pay you as little as possible while making you do the work of three people.
    3. If you really want to make a lot of money, you will figure out a way to profit off the hard work of others.
    4. If you choose to go to college, make sure you major in something that is more marketable than other majors. This may or may not be a field that you are interested in or even one you have any talent for. This is a good lesson for life: Nobody gives a shit if you like your job or not. They like people who pay their bills and don’t cause trouble.
    5. You are a cog in the corporate machine. If you were not born to the right parents, you will stay a cog in the corporate machine.
    6. A college degree will not get you a job. What it will get you is your resume not being immediately shitcanned on receipt. It’ll just get shitcanned later when someone’s frat brother applies for the same job.
    7. Going to a big prestigious expensive college does not mean the quality of your education is any better. It does mean that you will have access to connections that those going to other colleges will not have. If your choices are to be an A student by studying hard and behaving yourself, or to be a C student while you drink with the right people, choose the drinking. After all, George W Bush said the following at a Yale commencement: “To the C students, I say, ‘You too can be president of the United States.’”
    8. A college education (a Bachelor’s degree) is worth as much now as a high school diploma was to your grandparents. You basically have to have one before anyone will give you the time of day, but it’s not really an asset past that.
    9. It’s not what you know, it’s who you know. (Or sleep with.)

    We’re not really doing future generations any favors by crushing their souls after college rather than before. The sooner that students learn that they’re NOT special, that you are only worth what your bank account contains, and that without you looking out for your own self-interest to the exclusion of EVERYTHING else, the sooner they can adjust.

    • iblamehistory says:

      I can’t believe/am very pleased to see someone else say exactly what I have been saying for about 4 years now. This is 100% correct. I am one of the schmucks who bought in to what I was told, that I’d succeed if I worked hard and did well, so that’s what I did, and now I’m on food stamps with a master’s degree.

      On top of that, things momentarily looked up for us last fall, and we conceived our first child–right before everything turned to even worse shit than before. Now this baby is due in less than a month and I am beyond happy and excited and absolutely in love with this person who is constantly kicking me and keeping me awake and making me laugh, but I am terrified, and I will never feed her the lies that her dad and I were fed. Hell, I think your list there belongs in her baby book, because it is the absolute honest truth. She’s being born to the wrong parents who were born to the wrong parents and now she has to suffer for it. I think that reality will be much easier for her to handle and accomodate if we don’t hide it from her.

      I’ve also spent this entire pregnancy being harassed by family members who still truly believe that a bachelor’s degree is an extremely special thing, and therefore, despite the fact that I’m pregnant, I have had to deal with nearly 9 months of constant harassment and berating and belittling because I “refuse” to work. Basically, I am minutes away from cutting my own dad and stepmom out of my life. I half did it already, in an email reply to more bullshit, this morning. Not that my dad is much of an issue but he’s 74 today and if I tell him everything my stepmom is putting me through, he’ll just be pissed at both of us and he doesn’t need another stroke.

      I never expected to be handed anything, but I did expect to–as a result of going to college, working hard AND doing well, staying out of trouble, and being a Decent Human Being–have the opportunity to find a job that would at least allow me to cover my basic expenses and come out even at the end of every month. But what was my #1 mistake? Going to college–”Your education is impressive, but we don’t quite look for education, we want someone with concrete paid work experience, not class time and internships.” I did work while in college. In a basic clerical position, so that’s where my work experience is. I’ve applied for those positions now and I get turned down because of my advanced education. I essentially screwed myself over immediately upon high school graduation by doing exactly what I spent 18 years being told I had to do in order to succeed.

      • Portlandia says:

        Where did you get your masters and in what field?

        • iblamehistory says:

          Social work at Loyola in Chicago. Not a program I entered thinking I’d rake in 6 figures a year when I finished, or ever, mind you. Moderately paying jobs are out there but you basically have to have done them before in order to get them. I picked my specialization–medical/hospital work–based on the fact that those workers have a considerably high demand. Everyone around me was specializing in school or mental health social work, very few people in my class were doing healthcare, and I believe another big school in the city dropped their healthcare specialization due to lack of interest, despite the fact that medical social work tends to be higher paying and more in demand.

          • CosmosHuman says:

            I am entering CWRU this month for my MSSA which is a Masters of Social Work a concentration in Aging…what I have been employed the past 20 years.

            I’ll have no choice but to choose IBR for my loans. I will not take out any private loans.

            My loans may end up outliving me..as I’m no spring chicken!

            • frodolives35 says:

              I am sorry to have to tell you you are part of the student loan problem. It sounds like you are planning how not to pay back your student load. On behalf of all us taxpayers thanks a bunch.

      • GodfreyOriole says:

        The first part does not match the second part of your argument. You state you have a masters degree but then go and berate a bachelors degree.

        Most of the time a Bachelors degree and experience trumps just a masters degree.

        • iblamehistory says:

          My negative view of “just” a bachelor’s degree does come from the fact that because I have one (and at one time it was allI had, of course), I have family members who have told me this, and I quote: “you have a college degree, you need to go find a restaurant and dress nicely, go in and tell them you did well in college and have your bachelors and you’d like to discuss becoming a manager.”

          There are people who are so far detached from reality that they believe you can waltz into a business, say “hey I went to college!” and immediately enter salary negotiations. I sincerely wish I was making this up, but I guess when you’ve been out of the job market for over 30 years, you might have some horrible misconceptions. I just wish they weren’t so comical.

          Although I did try for 7 months to find work with my bachelor’s. When it didn’t happen, I decided the time was right to pick back up with school; going to grad school was something I wanted to do in the future, but since I wasn’t doing anything and I know the longer you wait the harder it can be to go back to school, I went for it. I had to have 1200 internship hours for my program, so I didn’t spend the whole time reading books and taking tests.

          • huadpe says:

            This is in reply to all of your comments in this thread, since I’m around your age but just finished my first experience on the “other” side of the table (that is, hiring someone)

            My boss and I did some hiring relatively recently at the very small business where I work. Basically, we went from a 2 person operation to 3 person, so I was the one posting the ad and doing an initial filter of the resumes, and both of us interviewed the people we brought in to interview. So obviously this is from the perspective of a REALLY small business, not somewhere that has an HR department to do alot of filtering. Our HR dep’t is me and a copy of quickbooks. For reference, we were hiring someone to do patent drafting, which is a sort of technical drafting that has its own very obscure conventions, and requires much more artistry than normal technical drafting.

            A few random thoughts on the process:

            1.) holy crap do you get alot of resumes when you post a job ad. I spent like 3 days sorting them. Some took a few seconds, most about 2 minutes, to determine interest. Maybe 1/10 were just awful and got thrown out instantly. My most memorable of that genre was a kid who made his resume in MS Word with different bullet pointing systems for each subhead. This was for a graphic design / technical drafting position, so being able to do a well formatted page matters. Another 2/10 were unacceptable for some other reason including no experience or education in the field, or being 1000 miles away (and not answering the follow up call asking if they were planning on moving here, mr. guy from Florida applying for stuff in NY).

            I was pretty generous with the phone interviews. I called maybe 20 or 30 people. Most of them lacked the technical experience we were looking for, but it’s a pretty obscure sort of job, so we were reasonably willing to train. When I described the work (as it is quite obscure I wasn’t gonna bother to try finding someone with the EXACT skillset) maybe 10 of them said they probably couldn’t do it, which I respect. Of the remainder, I ended up setting interviews with 3. All 3 were good candidates, but we had one stand out who we ended up hiring. One tip I got from his interview which impressed me was that he was very forthright about his limited availability due to being a part time stay at home dad. He brought a sheet summarizing his available and non-available hours given his wife’s work schedule. The reason that impressed me was he was being very up front about something many applicants might try to minimize, only to have it blow up in our faces later. He does a good amount of work from home now, which is good sometimes as our office gets cramped with 3 people, but he’s in often enough that we can meet about questions and problems regularly.

            Not sure if this is any help, but I thought you might find the perspective somewhat useful, or at least entertaining.

      • HogwartsProfessor says:

        Tell your harassers to shut the fuck up.

        Your baby may do better than you, and that is what you can hope for. Just teach him/her how to handle money and he/she will hopefully have very little trouble. That’s the cool thing about kids; you never ever know what they will end up doing. Your kid might save the world.

    • frodolives35 says:

      Sad but so true. Imagine your disillusionment and cynicism in 30 more years.

  10. philside92 says:

    i defaulted because i wasn’t paying enough attention to what was going on, coupled with the fact that i was in an americorps program at the time. when you are in an americorps program, you are eligible for deferment.

    my mistake was in assuming the paperwork had been filled out properly. once i had defaulted, they wanted nothing to do with the fact that the program had blown my paperwork or the fact that i could prove i had been enrolled.

    one of the infuriating things was that none of the direct loans representatives had any idea about americorps being a deferment – don’t they have a list of eligible deferments? i guess not.

  11. GodfreyOriole says:

    Its mainly because people go too $30k to $40k a year schools thinking it will give them an edge of people who go to $5k a year state schools and thats not the case.

    I got my 4 year degree from a $5000 a year SUNY school and got an awesome paying job.

    In most fields what school you attended is not as important as actually getting the degree. (only fields like lawyers and doctors matter).

  12. rayblasdel says:

    Having a substantial student loan debt and being underemployed part time in a supermaket, I’m continually conflicted. I believe I should pay back my loan, but at what cost and personal sacrifice is acceptable.

    Sallie Mae wants with no exception or room for negotiation 65% of my monthly income. Which leaves me with two choices, default or become homeless.

    • crescentcityblues says:

      Exactly. My wife has massive loans, with no room for negotiation, taken because her PARENTS had debt and this affected her credit. The loan companies apply whatever you can pay to the interest, NOT the principal, so you NEVER get out of debt.

  13. aleck says:

    People who “…ignored important-looking letters” should not be going to college in the first place. If they are dumb about such simple things, college will be a waste of time and money for everyone.

  14. Backwoods says:

    When the primary goal is profit, the objective isn’t to attract the best students, or those most likely to succeed. It’s mainly just to get the money. So: make the entrance requirements a joke and qualify 99% of applicants. After all, the dumber they are, the less likely they are to raise questions or make trouble afterward. Also, cultivate relationships with lenders who are ready and waiting to provide loans. Between the school and the lender, the applicant can be run through the loan process so fast, he or she won’t have time to think about what they’re getting into. Next, implement sketchy policies, such as requiring student loans to be kept in the school’s bank accounts. Make tuition nonrefundable. Charge fees for everything – including for holding onto their money. When the students eventually drop out, keep their remaining funds. Tell anyone smart enough to ask for the balance of his/her loan back that they spent it all, or just give them the runaround till they give up and go away. The school keeps the money, the student is stuck with the debt.

    The worst temp job I ever had was at a big student loan lender, filing correspondence regarding overdue student loans. A goodly number of letters received were from next of kin informing the lender of the debtor’s death. Sad to see so many young people’s death certificates. Sadder yet was to read and file the semi-literate letters from drop-outs who never understood what went on back when they’d applied to the school and were run through the student loan process. Because they didn’t understand what they were getting into, they didn’t understand why they were being told they owed money. How could they owe money, when they’d quit going to school?

    That, folks, is the for-profit schools’ ideal student candidates: too ignorant or unsophisticated to have any idea of what they are getting themselves into.

  15. HogwartsProfessor says:

    I would love to pay it back, if I could get a job that paid anything. Once I pay all my bills, there’s not a fuck of a lot left, and I have to save something. Some of those places get pissy and won’t take what you CAN send–no, we have to have a full payment of $6341964610164601649601610651 a month.

    Screw you; I have to pay for housing. What good is a degree if you can’t get a job with it (no matter what it is), or the job doesn’t pay anything?

  16. Luck says:

    If you don’t pay the cable bill, they shut off your cable. If you don’t pay your car loan, your car gets repossessed. If you don’t pay your mortgage, your house gets foreclosed on.

    If you don’t pay your student loans, they can’t take away your education.

  17. XTREME TOW says:

    I contacted one of those for profit types last year. They keep sending me “Just complete this loan application/enrollment form, and we can schedule an interview with a carreer counselor.” e-mails every week. I blocked their phone number from ringing through. I got tired of all those “As soon as you complete the registration form and loan agreement, we can get you scheduled for classes…”
    However…since this problem is going to result in some type of government action in the next few years…I think I should really consider going back to school. If I time it just right, I can get away without paying anything back. “College Loan Amnesty” anyone?
    The only people who DO NOT have to pay back student loans: Politicians AND their immediate family members! God Bless America!