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Author Topic: Exposing the Student Loan Racket (Infographic)  (Read 2037 times) Average Rating: 0
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sainthieu
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« on: October 14, 2011, 01:09:44 PM »

Scroll down slightly for a crystal-clear infographic.

"Student loan debt, now at $830 billion, has surpassed credit card debt—a statement not likely to have been heard 20 years ago. Student loans, unlike any other form of debt, CANNOT be forgiven via bankruptcy—these loans MUST be repaid. Is this the next bubble to burst?"
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« Reply #1 on: October 14, 2011, 01:41:40 PM »

Scroll down slightly for a crystal-clear infographic.

"Student loan debt, now at $830 billion, has surpassed credit card debt—a statement not likely to have been heard 20 years ago. Student loans, unlike any other form of debt, CANNOT be forgiven via bankruptcy—these loans MUST be repaid. Is this the next bubble to burst?"
However, student loan debt is NOT inheritable. It is forgiven when the borrower dies.
« Last Edit: October 14, 2011, 01:44:07 PM by PeterTheAleut » Logged
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« Reply #2 on: October 14, 2011, 02:30:34 PM »

I had heard that indentured servants could get out of their servitude by dying.  Interesting.
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« Reply #3 on: October 14, 2011, 03:13:23 PM »

Scroll down slightly for a crystal-clear infographic.

"Student loan debt, now at $830 billion, has surpassed credit card debt—a statement not likely to have been heard 20 years ago. Student loans, unlike any other form of debt, CANNOT be forgiven via bankruptcy—these loans MUST be repaid. Is this the next bubble to burst?"

That is not entirely accurate. Under Chapter 7 of the Bankruptcy laws in the US student loans can be discharged if the court finds that the debt will impose an undue hardship on  you and your dependents. Often cited is the case of Brunner v. New York State Higher Education Services Corporation (831 F.2d 395). According to that case if you meet a 3 prong test, the debt can be discharged. The tests are:

1) The debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans
2) Additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and
3) The debtor has made good faith efforts to repay the loans.

Of course different courts will apply different tests, but many use the Brunner test. The interesting thing about this is that if you are discharged of your student debt, under the tax laws of the US you are required to report that debt discharge as income in the year the loan is forgiven. So you might still get caught having to pay something on the debt even if it is significantly less.

-Nick
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« Reply #4 on: October 14, 2011, 03:39:08 PM »

I had heard that indentured servants could get out of their servitude by dying.  Interesting.
Unlike a debt that you pass on to those who had no part in amassing it?
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« Reply #5 on: October 14, 2011, 04:05:40 PM »

The story here is that so many kids have taken loans and then studied something they have not a snowball's chance in hell of ever making a living at--and no one in the university administration ever tried to stop them.
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« Reply #6 on: October 14, 2011, 04:10:20 PM »

The story here is that so many kids have taken loans and then studied something they have not a snowball's chance in hell of ever making a living at--and no one in the university administration ever tried to stop them.
Yeah, I suppose this is just like any good thing. There are many who will use it wisely and responsibly, and there are many who, out of greed, naivete, or some other motive, will abuse it.
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« Reply #7 on: October 14, 2011, 04:38:00 PM »

The story here is that so many kids have taken loans and then studied something they have not a snowball's chance in hell of ever making a living at--and no one in the university administration ever tried to stop them.


Yes, but is that really anyone's fault but their own? I remember when I got into college, I was looking at what would give me a job with a decent starting salary and prospects. Unfortunately the major I originally chose was a little beyond my skill level. When I got out of that major I looked again and found that there were good prospects in the accounting field and even better ones in taxation. Having always been interested in numbers, accounting seemed like the way to go. Tax developed from studying accounting, but I feel confident that the majors positioned me for the ability to have a job in the best of times and the worst of times. This is the result of research and making a good decision, not out of luck. Yes, I have to pay back the student loans from my MS, but they are easy to pay having full-time employment and a savings. It is disheartening to see someone have $30-40K in student loans and a major like communications where a simple search would have shown poor prospects for future employment. It would've almost been better to avoid the loan and take up a trade.

-Nick
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« Reply #8 on: October 14, 2011, 04:40:51 PM »

I just maintain that anyone smart should attend a state school. I wouldn't have minded paying my in-state school loan fees, as hard as it's been to get a job in my field. But that is DOUBLED because I attended an out-of-state school.

Now, a lot of great things happened as a result, but boy, am I paying for it. And I wonder what the percentage of students attending schools in different states is, because my if I slashed my debt in half, I would finish paying that within two or three years, easy, rather than over 10 or so.
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« Reply #9 on: October 14, 2011, 05:00:30 PM »

I had heard that indentured servants could get out of their servitude by dying.  Interesting.
Unlike a debt that you pass on to those who had no part in amassing it?

Don't get me started on having to pay debts of a dead relative.  I am split on the student loans thing.  Nick pointed out a major problem in that people get into debt for college by their own choice.  If you go into something that is not going to make money then you probably should have been thinking a bit harder.  What causes the problem is all throughout the botched abortion that is an American high school they have had their heads pumped full of propaganda about how they needed to go to college to be successful.  Anyone who says "you need to go to college" and fails to give the caveats (and major in something that will make money) should be given the cat-o-nine-tails until they get some sense.  A thief only steals from one person at a time.  A peddler of crap info ruins hundreds.

I payed my way through college by working 30+ hours in fast food or retail and more hours in the summer.  On top of this I had parents who fed me, clothed me, housed me, and gave me an old Aerosta van (the 'r' had fallen off) to drive.  Relatives helped me out from time to time as well.  My parents gave me the tax refunds they got from claiming me as a dependent to put towards tuition and books.  My own tax refunds went to college and 50%+ of my income did as well.  Not everyone can be so lucky.  College is for the rich or those with a strong support group.  If you lack one of these, you should have a plan as to how to pay for it all.  Loans ain't free.
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« Reply #10 on: October 14, 2011, 09:57:46 PM »

I paid off my 'ten-year' loan in four years.

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« Reply #11 on: October 14, 2011, 10:11:18 PM »

Or you can have state sponsored free education, like all continental Europe does. Why wouldn't it work here. I went to college without paying a penny in Romania.
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« Reply #12 on: October 14, 2011, 10:40:16 PM »

Or you can have state sponsored free education, like all continental Europe does. Why wouldn't it work here. I went to college without paying a penny in Romania.
But were you required to do patriotic work?
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« Reply #13 on: October 14, 2011, 11:26:33 PM »

Or you can have state sponsored free education, like all continental Europe does. Why wouldn't it work here. I went to college without paying a penny in Romania.
But were you required to do patriotic work?
Never.
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« Reply #14 on: October 15, 2011, 10:35:37 AM »

Or you can have state sponsored free education, like all continental Europe does. Why wouldn't it work here. I went to college without paying a penny in Romania.

Germany used to have free schooling. They found it didn't work so good. Now you have to pay something to go to school.

-Nick
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« Reply #15 on: October 15, 2011, 10:42:28 AM »

Or you can have state sponsored free education, like all continental Europe does. Why wouldn't it work here. I went to college without paying a penny in Romania.

Germany used to have free schooling. They found it didn't work so good. Now you have to pay something to go to school.

-Nick

Why it didn't work?
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« Reply #16 on: October 15, 2011, 11:29:16 AM »

When I was in Germany, my friends told me the main problem was that students were not compelled to graduate and could take as long as they wanted to to complete courses.  As a result, the German government was often subsidizing 10-year periods of college education for students who often took long vacations and rarily attended lectures.  In essence, they had no ownership of their education and looked at it as something to be abused.

Having students 'under the gun' to complete education motivates students to take their education seriously.

On a related note, because the german government controls higher education, they also control the admissions process for the theological schools.  German law required (I don't know about now, but this was 20 years ago) mandatory military service for all men except those going into medicine or ministry.  So, all the anarchists and communists who did not want to serve in the military either tried to get into medicine or theology.  The problem is that, unlike the US where people often work in fields totally unrelated to their degrees, once you take a Magister in a particular subject, that's your life.

This meant that the Evangelische Kirche in Germany became loaded with atheists (most Communists in that period were still very much atheists), and led to the undermining of faith in Germany.  My friends used to laugh about how 'even the clergy' didn't believe in God.  After all, the government can't 'discriminate' against someone studying theology even if he doesn't believe in God.

Romanian seminaries are very much controlled by the Church, so I don't think they would have the same problems.


Or you can have state sponsored free education, like all continental Europe does. Why wouldn't it work here. I went to college without paying a penny in Romania.

Germany used to have free schooling. They found it didn't work so good. Now you have to pay something to go to school.

-Nick

Why it didn't work?
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« Reply #17 on: October 15, 2011, 07:19:02 PM »

I had heard that indentured servants could get out of their servitude by dying.  Interesting.
Unlike a debt that you pass on to those who had no part in amassing it?

Don't get me started on having to pay debts of a dead relative.  I am split on the student loans thing.  Nick pointed out a major problem in that people get into debt for college by their own choice.  If you go into something that is not going to make money then you probably should have been thinking a bit harder.  What causes the problem is all throughout the botched abortion that is an American high school they have had their heads pumped full of propaganda about how they needed to go to college to be successful.  Anyone who says "you need to go to college" and fails to give the caveats (and major in something that will make money) should be given the cat-o-nine-tails until they get some sense.  A thief only steals from one person at a time.  A peddler of crap info ruins hundreds.

I payed my way through college by working 30+ hours in fast food or retail and more hours in the summer.  On top of this I had parents who fed me, clothed me, housed me, and gave me an old Aerosta van (the 'r' had fallen off) to drive.  Relatives helped me out from time to time as well.  My parents gave me the tax refunds they got from claiming me as a dependent to put towards tuition and books.  My own tax refunds went to college and 50%+ of my income did as well.  Not everyone can be so lucky.  College is for the rich or those with a strong support group.  If you lack one of these, you should have a plan as to how to pay for it all.  Loans ain't free.
You shouldn't be legally responsible for a dead relatives debts. The estate is. The debts might eat up any inheritance, but you aren't personally liable for them.
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« Reply #18 on: October 15, 2011, 07:21:18 PM »

There's nothing wrong with attending a decent community college either. They aren't as costly and offer courses geared towards more marketable degrees.
A little off topic but noteworthy: the leading cause of students dropping out of college is consumer debt, mainly credit card debt.
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« Reply #19 on: October 15, 2011, 11:01:31 PM »

When I was in Germany, my friends told me the main problem was that students were not compelled to graduate and could take as long as they wanted to to complete courses.  As a result, the German government was often subsidizing 10-year periods of college education for students who often took long vacations and rarily attended lectures.  In essence, they had no ownership of their education and looked at it as something to be abused.

Free education doesn't need to lead into this. In Finland studying is basically free but students must still buy food and rent an apartment. The state supports students financially but the support is linked with progress of studies. If one can't prove your studies have proceeded, one must pay the study grants back to the state. That's a fairly good motivator.
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« Reply #20 on: October 15, 2011, 11:21:10 PM »

There's nothing wrong with attending a decent community college either. They aren't as costly and offer courses geared towards more marketable degrees.
A little off topic but noteworthy: the leading cause of students dropping out of college is consumer debt, mainly credit card debt.


You're quite right. I went back to school some time ago and started with one on-line class a semester at my local community college; that's what fit with Life being what it is.  I'm starting my seventh year, am in an honours program with scholarship (and I've rented my text books rather than buying them for the past several years) and have had some terrific classes and experiences.  With the honours classes I had to make the change to being in class with real live people instead of having all work done from home.  But they're in the evenings or Saturday mornings so it's all worked out.  The cost is much less with the CC and the professors have all been excellent.

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« Reply #21 on: October 15, 2011, 11:44:51 PM »

Or you can have state sponsored free education, like all continental Europe does. Why wouldn't it work here. I went to college without paying a penny in Romania.
But were you required to do patriotic work?
Never.
In Romania today is higher education completely free? I heard that under Ceausescu education was free but you had to do patriotic work and you had to pay for your meals, unless you had a scholarship.
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