When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.
It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.
"Maybe half of it was my fault because I didn't look at the fine print," Dr. Bisutti says. "But this is just outrageous now."
To be sure, Dr. Bisutti's case is extreme, and lenders say student-loan terms are clear and that they try to work with borrowers who get in trouble.
But as tuitions rise, many people are borrowing heavily to pay their bills. Some no doubt view it as "good debt," because an education can lead to a higher salary. But in practice, student loans are one of the most toxic debts, requiring extreme consumer caution and, as Dr. Bisutti learned, responsibility.
Unlike other kinds of debt, student loans can be particularly hard to wriggle out of. Homeowners who can't make their mortgage payments can hand over the keys to their house to their lender. Credit-card and even gambling debts can be discharged in bankruptcy. But ditching a student loan is virtually impossible, especially once a collection agency gets involved. Although lenders may trim payments, getting fees or principals waived seldom happens.
Yet many former students are trying. There is an estimated $730 billion in outstanding federal and private student-loan debt, says Mark Kantrowitz of FinAid.org, a Web site that tracks financial-aid issues—and only 40% of that debt is actively being repaid. The rest is in default, or in deferment, which means that payments and interest are halted, or in "forbearance," which means payments are halted while interest accrues.
As the return on investment of that higher education falls, it will no longer be cost-effective to attend college, and the college bubble will pop. The intrinsic value of "higher learning" is reserved for those that have money to burn.
ReplyDeleteCollege is a scam to get people in debt.
ReplyDeleteDoubt that many former students will find the kind of high paying jobs that will allow them to pay off their debt in this environment.
In the 60's, 70's and even 80's. most college grads graduated owing no more than 10 grand which was considered a sizeable chunk of change even then. Imagine owing $500,000.
Bah humbug!
9:26 I agree college for many has turned out to be a net negative especially in the last 10 years or so when they are cranking out so many graduates with not enough college level jobs for them even in a so called good economy. This problem will get much worse as none of them are hardly getting decent jobs now as the health field is about the only field hiring. I have a feeling the media pushing college just like they pushed housing wasnt a bubble before will delay the college bubble bursting for a few years however. The defaault rates will skyrocket even worse and even more people will have their tax returns seized and wages garnished since you cant erase that debt with a bankruptcy like other debt.
ReplyDeleteA doctor who didn't read the fine print? Wow, that inspires confidence.
ReplyDeleteBrilliant of the banksters 30 years ago to make sure that student loans could not be dismissed in bankruptcy. Since the banksters have owned Congress for decades, that was not a problem for them.
ReplyDeleteA life of enslaved debt for many.
The same thing happening across the board. To be a successful chicken farmer you must go into debt for $500,000 to earn a profit of $18k. (Watch FOOD INC movie).
The banksters have cleverly devised their plans on many fronts. Those that strive for material wealth are ensnared into the debt bear trap.
If you want piece of mind reject materialism, drive an old car, live in a humble home, and stop working yourself to death. You will be MUCH happier.
Add in there take your 'money' out of the bank and hold your savings in physically held precious metals. Don't contribute to the filty banker ponzis.
ReplyDeleteIt looks like 71+ people are up to buying T-shirts! Yeah! My 2009 t-shirt is outdated.
ReplyDelete2007 collapse + printed trillions in fiat notes = much worse collapse 3-4 years delayed.
I highly recommend that people watch the Century of Self videos on Google.
ReplyDeleteLearn how corporations learned how to manipulate us by playing to our emotions and drives. We have been played like a violin.
The debt problem is reflective of the decay of the moral standards in this county. There is very little financial literacy many of the student loan were never good investments. Our culture has bought off on the crap pushed by the government that everyone should go to college regardless of the cost.
ReplyDeleteThe only way to rebuild in to teach person responsibility. When I ran out of money in college I got a job and took less credits. My family has paid back 6 figures worth of student loans. I lived in a crappy apt, drove an old car and took no vacations to get the burden off my back.
There are people that will always say, "the devil made me do it" You can not build a successful economy when that kind of weak mind crap is allowed spewed out unopposed.
as it turns out I can't spell when I am in a hurry. Well...at least a pay my bills...
ReplyDeleteWe are the Fourth Reich. In action, every bit as lethal and brutal as the third. We just have a mind numbed and deluded populace that believes we are the good guys living in a free country. By definition then we are a clandestine empire. An empire that does the bidding of its masters the Zionist/globalist elite families.
ReplyDeleteIf the economic collapse meant that we'd stop killing innocent people around the world as well as our occupations, then I am all for the collapse happening now.
ReplyDeleteThat is unlikely though. Our brutality will continue and it will be directed inward toward our own populace as the people slowly begin to awaken.
Ah poor 3:33pm.
ReplyDeleteWhat misguided thinking.
The economic collapse is being orchestrated for a very obvious reason to us students of history, especially with regard to the actions of the rich and powerful in directing world events.
Ever notice that some sort of economic collapse precedes each war? A poor citizenry is an easily controlled citizenry. Notice the 'war on terror' coincides with a number of events which should have millions marching in the streets! 20 million dollar bonuses for bankers while millions are evicted from their homes? Do you understand now? Do you finally get it?
Maybe you would rather China and/or Russia to be the Superpower, That would probably make it ok with you when THEY killed the innocents of the world.
ReplyDeleteCourse that would mean you would be skewered with
a bayonet and your wife and daugthers brutaly and repeated raped and pillaged before recieving said bayonet.
Get in the real world ! Brutality? You ain't seen nuthin' yet; we are pikers compared to what they people can do, have done and -------------
are about to do ----
Stay tuned ---------- and have a nice day.
A competing loans offer could make all the difference and let you save hundreds of dollars every month in interest payments. Among the challenging aspects of securing loans is the research process. It seems to become difficult to compare numerous offers, providers, and a complex plethora of confusing options.
ReplyDeleteFind it hard to feel sorry for people who sign a loan without reading the fine print or for people who take out a loan without being sure how they will pay it back. Went to college on pell grants and what ever I could pay out of my own pocket. Now I am the most educated person in the department where I work in a hospital. But I am also the lowest paid person in my department also. I watch people with just high school diplomas or GEDs get training and be promoted and advance while I get no raise or advancement. It is who you know not what you know. At least I didn't take out any student loans so I have no debts for eduction. Wish I had just worked and didn't go to college. I wasted my time and I could of used the time I went to college on working. College is a scam and the government would love to indoctrinate as many people as they can and put as many people as they can in debt to them.
ReplyDeleteHere is a great way to pay your student loans as inflation tightens its iron grip:
ReplyDeleteBuy precious metals. Since debts are nominal (they stay the same amount even though the price of oil, food, energy, GOLD, SILVER goes way up), you can take 10, 20, or 30 ounces of silver you bought for $20/ounce that, after hyperinflation, will be worth at least $1000/ounce, and pay off that student loan easily and cheaply.
The only stipulation is that you hold on to it (silver or gold) until the right time. Wait until everyone you know is trying to get some and wait until it is at least $1000/oz (it will go higher in my opinion) and then sell.
Secured loans have low rate of interest and allows larger amount to borrow. Generally you have to pay 7.7%APR variable. for more information about Loans for People on Benefits
ReplyDeletevisit http://www.samedayloansforpeopleonbenefits.co.uk
We are the Fourth Reich. In action, every bit as lethal and brutal as the third. We just have a mind numbed and deluded populace that believes we are the good guys living in a free country. By definition then we are a clandestine empire. An empire that does the bidding of its masters the Zionist/globalist elite families.
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