Financial collapse and student loan debt burdens. How will they pay the loans back?

[bigchiller]

For the past 3 decades it has become the norm to borrow for rapidly increasing tuition costs. Currently ~ 66% of college graduates graduate with student loan debt. The average debt for one of these students being ~20k (http://www.finaid.org/loans/). This doesn't include credit card debt, which I'm sure is high considering the aggressive marketing by CC companies to students.

The numbers are higher for those graduating with masters degrees which seem to be getting more and more popular. During the last downturn (2001-2003) graduates unable to find jobs opted for graduate school and many took on extra debt to do so. This time, it seems to be happening again ( http://www.mlive.com/flintjournal/in...arity_inc.html )

But what if we ARE about to enter the second great depression? In that case, the jobs won't be back for quite some time. What if we have millions of young people graduating with crushing debt burdens and finding it difficult to get a job even at Starbucks? Even lawyers who are graduating over 100k in debt may struggle in a depression economy, and student loans can't be wiped through bankruptcy.

What's going to happen when these kids can't find jobs to pay back their loans?

[Slimprofits]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

What's going to happen when these kids can't find jobs to pay back their loans?

Unless there is a jubliee, many of them will be debt slaves for the rest of their lives.

see: Finaid.org consequences of default

Going to be heck of a lot of graduates in 2009 and 2010 and beyond moving back in with Mom and Dad and attempting to win back those old summer jobs.

Some will prolong their schooling partially in order to defer payments on their original loans.

Others will default immediately.

[BadJuju]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

I am a sophomore in college with about 7k in debt, but that is all I will ever owe since I will not need anymore. I cannot imagine becoming a debt slave because of 7k, which is a pittance. Anyway, I have another three years to go in college.

[LargoWinch]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

Unless there is a jubliee, many of them will be debt slaves for the rest of their lives.

see: Finaid.org consequences of default

Going to be heck of a lot of graduates in 2009 and 2010 and beyond moving back in with Mom and Dad and attempting to win back those old summer jobs.

Some will prolong their schooling partially in order to defer payments on their original loans.

Others will default immediately.

See in red...wow.


[If you default on your student loan:

• Your loans may be turned over to a collection agency.
• You'll be liable for the costs associated with collecting your loan, including court costs and attorney fees.
• You can be sued for the entire amount of your loan.
• Your wages may be garnished. (Federal law limits the amount that may be garnished to 15% of the borrower's take-home pay.)
• Your federal and state income tax refunds may be intercepted.
• The federal government may withhold part of your Social Security benefit payments. (The US Supreme Court upheld the government's ability to collect defaulted student loans in this manner without a statute of limitations in Lockhart v US (04-881, December 2005).)
• Your defaulted loans will appear on your credit record, making it difficult for you to obtain an auto loan, mortgage, or even credit cards. A bad credit record can also harm your ability to find a job.
• You won't receive any more federal financial aid until you repay the loan in full or make arrangements to repay what you already owe and make at least six consecutive, on-time, monthly payments. (You will also be ineligible for assistance under most federal benefit programs.)
• You'll be ineligible for deferments.
• Subsidized interest benefits will be denied.
• You may not be able to renew a professional license you hold.]

[Wild Style]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

• You may not be able to renew a professional license you hold.]

This downturn has the potential to end very badly.

[audrey_girl]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

See in red...wow.


[If you default on your student loan:

• Your loans may be turned over to a collection agency.
• You'll be liable for the costs associated with collecting your loan, including court costs and attorney fees.
• You can be sued for the entire amount of your loan.
• Your wages may be garnished. (Federal law limits the amount that may be garnished to 15% of the borrower's take-home pay.)
• Your federal and state income tax refunds may be intercepted.
• The federal government may withhold part of your Social Security benefit payments. (The US Supreme Court upheld the government's ability to collect defaulted student loans in this manner without a statute of limitations in Lockhart v US (04-881, December 2005).)
• Your defaulted loans will appear on your credit record, making it difficult for you to obtain an auto loan, mortgage, or even credit cards. A bad credit record can also harm your ability to find a job.
• You won't receive any more federal financial aid until you repay the loan in full or make arrangements to repay what you already owe and make at least six consecutive, on-time, monthly payments. (You will also be ineligible for assistance under most federal benefit programs.)
• You'll be ineligible for deferments.
• Subsidized interest benefits will be denied.
• You may not be able to renew a professional license you hold.]

the facts in this case were really ugly

http://www.usatoday.com/news/washing...nt-loans_x.htm

[metalman]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

the facts in this case were really ugly

http://www.usatoday.com/news/washing...nt-loans_x.htm

that is just sick.

[Mega]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

Little By Little.................Bit by Bit...........till it was TOO much.
Then.........Viva La Revolotion!

Mike

[stetts]

What, me worry?

You folks haven't been paying attention. Note the Ed Dept may, in some circumstances, cancel debts. Further, even in that court case, the government did nothing for a decade. Finally, imagine what happens when some appropriately correct photogenic former student with a sob story shows up on the MSM. Poof. Debts of the very deserving deadbeat are forgiven, sticking the taxpayer with yet another bill. Oh yes, and don't forget the promise of some sort of civilian corps. Wouldn't that be a nice way to pay off debts while campaigning, um, sorry, doing community organizing for your favorite political party. So it goes.
I do agree it'll be ugly. But not for the debtor.
Take care and Merry Christmas. Stetts

[metalman]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

Little By Little.................Bit by Bit...........till it was TOO much.
Then.........Viva La Revolotion!

Mike

the story sez...

The 9-0 decision backed insurance companies, which argued that they should not have to pay legal fees of a New Mexico couple in a case that was shuffled from state court to federal court, then back to state court.

how long will this go on?

[Guinnesstime]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

Little By Little.................Bit by Bit...........till it was TOO much.
Then.........Viva La Revolotion!

Mike

I am with Mike..... Viva La Lotion!!!

[Wild Style]

Re: What, me worry?

You folks haven't been paying attention. Note the Ed Dept may, in some circumstances, cancel debts. Further, even in that court case, the government did nothing for a decade. Finally, imagine what happens when some appropriately correct photogenic former student with a sob story shows up on the MSM. Poof. Debts of the very deserving deadbeat are forgiven, sticking the taxpayer with yet another bill. Oh yes, and don't forget the promise of some sort of civilian corps. Wouldn't that be a nice way to pay off debts while campaigning, um, sorry, doing community organizing for your favorite political party. So it goes.
I do agree it'll be ugly. But not for the debtor.
Take care and Merry Christmas. Stetts

excuse my ignorance but what does msm mean

[metalman]

Re: What, me worry?

You folks haven't been paying attention. Note the Ed Dept may, in some circumstances, cancel debts. Further, even in that court case, the government did nothing for a decade. Finally, imagine what happens when some appropriately correct photogenic former student with a sob story shows up on the MSM. Poof. Debts of the very deserving deadbeat are forgiven, sticking the taxpayer with yet another bill. Oh yes, and don't forget the promise of some sort of civilian corps. Wouldn't that be a nice way to pay off debts while campaigning, um, sorry, doing community organizing for your favorite political party. So it goes.
I do agree it'll be ugly. But not for the debtor.
Take care and Merry Christmas. Stetts

community organizer = makes urban real estate rehabs safe for investors.

[Rajiv]

Re: What, me worry?

excuse my ignorance but what does msm mean

In this context, I believe that it means "Main Stream Media"

[stetts]

MSM definition

That's what I meant. Thanks. Stetts