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Student loan question for Americans.
- Thread starter HansNZ
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A
ajtomasi
Guest
Federal loans and most loans in general will only give you what the school says you can have. But if you go to BankOne.com you can get a loan for anything as long as your in school.
HansNZ
New member
The reason I ask is because in my country students can borrow money for living expenses. This was introduced about 10 years ago and it's been a disaster. You have 18 year olds taking out huge loans and now they're saddled with debt that they can't pay. People pointed to the USA as a country where people take out huge loans but pay them off, but I was wondering whether this was only for fees, rather than dead-end consumption.
HansNZ
New member
*** said:
I think you can wipe them off if you are declared bankrupt. They are also forgiven if you die.
The government is doing things such as not charging interest on them while people are studying. At some point in the future they will probably match repayments dollar for dollar for any sum paid off over the minimum amount.
Basically there's this huge pile of bad debt and now they are trying to get rid of it somehow.
A
ajtomasi
Guest
*** said:
which is probably why they're so easy to get.
and even if you file bankruptcy they take it out of your wages!
AT one time in the U.S. student loans were written off when bankruptcy was filed.
Those times are long gone.
The biggest offenders were high end loans. (Dr,lawyers ect)
Hence the richer get richer and the poorer get poorer.
In many cases it wasn't that they could not make payments it was easier for them to have it Written off.
Those times are long gone.
The biggest offenders were high end loans. (Dr,lawyers ect)
Hence the richer get richer and the poorer get poorer.
In many cases it wasn't that they could not make payments it was easier for them to have it Written off.
A
ajtomasi
Guest
Highest Suicide rates are from Dentists. High student loans drive them nuts.
HansNZ
New member
*** said:
There are very few people declaring bankrupcy. Our laws are different from the USA. If you file for bankrupcy, but you still have an ability to pay, i.e. you have a job or you will have a job in the future, then you're going to have to pay something. You can only wipe off what you cannot pay.
***
New member
ANVIL276 said:
exactly. i can easily make the montly payments, but it's gonna take another 7 years. if bankruptcy could have wiped off $112k i would have filed for bankruptcy 3 years ago and sucked it up for 7 years of shitty credit. shit, i should have thought about that earlier and gone to a country where i could do that. damn!
HansNZ
New member
*** said:
yes. If you have this earning potential then your debts are going to be rescheduled accordingly. If your debt was wiped out because you don't earn a certain amount, and then it appears you mislead people because now you have a highly paid job when you said otherwise, then you'd find yourself in court.
HansNZ
New member
*** said:
Your records are usually wiped after 5 years. Five years is a long time to stay voluntarily unemployed. I doubt you'd be expected to contribute more than a third of your income long-term to repaying bad debt. Any debts above that which can't be serviced would probably be wiped. So it is worth your while to get yourself a job again.
Baby Gorilla
New member
Allow me to rant....
US Financial Aid for college....in a nutshell.
It's nothing but a scam to keep a bloated academic establishment in the black at the expense of future Americans.
You can pay for most anything on student loans related to school, including living expenses. Your financial aid office is supposed to detail these amounts. If they don't tailor them to your actual expenses, you don't get enough. Fortunately (sic), most colleges will do the paperwork to make the amount borrowed match your actual economic need.
Subsidized Federal loans have the interest paid by the government. Unsubsidized Federal loans do not. You can either pay the interest as it accumulates or let it recapitalize every quarter.
On repayment, you have 4 general repayment plans....Standard, Extended, Graduated, Income-Contingent.
On relief. Federal Student loans (and consolidation loans) are insured by the US Government against total and permanent disability or death. So, somebody does a jig when a debtor kicks the can. :rolleyes
For bankruptcy....because so many assholes just filed bankruptcy to get out of student loans after finishing school, they changed the law to require 7 years of repayment before student loans were eligible for bankruptcy discharge. Since 99.9% of consolidation lenders are private companies, they lobbied yet another change to the bankruptcy laws to eliminate bankruptcy relief in all cases save for "extreme hardship." The courts have defined this as something like having a long-term health problem that pretty much ends your ability to ever make a decent living or will cost you so much you'll never be able to pay on your loans after paying medical expenses.
It's not such a dead end option, though. A good bankruptcy attorney knows the lean of their local bankruptcy court judge. Some hold to the spirit of bankruptcy law and are much more liberal in declaring someone in an "extreme hardship" situation than others. However, you need to be very hard off to qualify.
Even though income-contingent is the best way to ensure people always make payments, ONLY THE US GOVERNMENT offers this option on consolidation loans. If you can't pay the interest payments each month, private lenders won't touch you. I went through this consolidating my debt last year. The first lender said NOTHING about not offering ICR, and they even deceptively said they had "Income Sensitive" plans which (when you read the exact descriptions) were nothing but a couple variations of the graduated repayment plan.
ICR is a necessity because when you go into repayment, you only get 3 years worth of forbearances and deferrmets. After that, if you can't pay, you are in default and they can choose to come after you with anything they want to collect the money in full. I owe over $80K. If I was on level payments for 30 years, I'd owe just over $400/mth.
The whole thing is a scam to keep people economically enslaved. In 25 years, I doubt I'll have my loans paid off. If I own a house by then, what do I do? Refinance to pay the balance? Refinance to pay the tax liability? I'm going to be 60 by then. I'll likely be at the end of my productive work years....certainly the high-paying ones. Somehow, living to the "golden years" isn't that attractive unless I start making BIG money.
Hope this is informative on how it works in the USA.
US Financial Aid for college....in a nutshell.
It's nothing but a scam to keep a bloated academic establishment in the black at the expense of future Americans.
You can pay for most anything on student loans related to school, including living expenses. Your financial aid office is supposed to detail these amounts. If they don't tailor them to your actual expenses, you don't get enough. Fortunately (sic), most colleges will do the paperwork to make the amount borrowed match your actual economic need.
Subsidized Federal loans have the interest paid by the government. Unsubsidized Federal loans do not. You can either pay the interest as it accumulates or let it recapitalize every quarter.
On repayment, you have 4 general repayment plans....Standard, Extended, Graduated, Income-Contingent.
- Standard .... Flat payments over X years depending on the total amount owed.
- Extended .... Lower payments over longer term (often 30 year maximum). You get lower payments but pay more interest long-term. (If you owe a large amount, this won't differ from standard as you'll already have the maximum repayment term of 30 years.)
- Graduated .... Lower payments at first. Going up after 5 years when they figure you SHOULD be making much more money.
- Income-Contingent .... They can only take 20% of your discretionary income each month. Determined by taking your annual income (before taxes
), subtracting the poverty level for your size family, then determining 20% of that. The repayment term is 25 years. Anything not paid off at the end of 25 years is forgiven and treated as taxable income.
On relief. Federal Student loans (and consolidation loans) are insured by the US Government against total and permanent disability or death. So, somebody does a jig when a debtor kicks the can. :rolleyes
For bankruptcy....because so many assholes just filed bankruptcy to get out of student loans after finishing school, they changed the law to require 7 years of repayment before student loans were eligible for bankruptcy discharge. Since 99.9% of consolidation lenders are private companies, they lobbied yet another change to the bankruptcy laws to eliminate bankruptcy relief in all cases save for "extreme hardship." The courts have defined this as something like having a long-term health problem that pretty much ends your ability to ever make a decent living or will cost you so much you'll never be able to pay on your loans after paying medical expenses.
It's not such a dead end option, though. A good bankruptcy attorney knows the lean of their local bankruptcy court judge. Some hold to the spirit of bankruptcy law and are much more liberal in declaring someone in an "extreme hardship" situation than others. However, you need to be very hard off to qualify.
Even though income-contingent is the best way to ensure people always make payments, ONLY THE US GOVERNMENT offers this option on consolidation loans. If you can't pay the interest payments each month, private lenders won't touch you. I went through this consolidating my debt last year. The first lender said NOTHING about not offering ICR, and they even deceptively said they had "Income Sensitive" plans which (when you read the exact descriptions) were nothing but a couple variations of the graduated repayment plan.
ICR is a necessity because when you go into repayment, you only get 3 years worth of forbearances and deferrmets. After that, if you can't pay, you are in default and they can choose to come after you with anything they want to collect the money in full. I owe over $80K. If I was on level payments for 30 years, I'd owe just over $400/mth.
The whole thing is a scam to keep people economically enslaved. In 25 years, I doubt I'll have my loans paid off. If I own a house by then, what do I do? Refinance to pay the balance? Refinance to pay the tax liability? I'm going to be 60 by then. I'll likely be at the end of my productive work years....certainly the high-paying ones. Somehow, living to the "golden years" isn't that attractive unless I start making BIG money.
Hope this is informative on how it works in the USA.
HansNZ
New member
Re: Allow me to rant....
In New Zealand university is basically free. You do have to pay a token fee of US$1,600 per year though. Borrowing money to live is where the problem is. If you are married, over 25 or come from a low income family you can get a student allowance of about $187 a week. Most student don't fit this criteria so they borrow instead. This student allowance will eventually be extended to cover all full-time students. This will cost a lot though.
When my father went through university he had these priviledges, but back then only about 2% of the population went to university. NZ now has the highest rate of university graduates per capita, after Ireland, so it's pretty expensive for the government to do this, especially with an aging population to finance as well.
Basically there are people here ending up in your situation which is not something a society like ours which has traditionally supplied social services free to the consumer is used to. Dealing with this is a big political issue here these days.
Baby Gorilla said:The whole thing is a scam to keep people economically enslaved. In 25 years, I doubt I'll have my loans paid off. If I own a house by then, what do I do? Refinance to pay the balance? Refinance to pay the tax liability? I'm going to be 60 by then. I'll likely be at the end of my productive work years....certainly the high-paying ones. Somehow, living to the "golden years" isn't that attractive unless I start making BIG money.
Hope this is informative on how it works in the USA.
In New Zealand university is basically free. You do have to pay a token fee of US$1,600 per year though. Borrowing money to live is where the problem is. If you are married, over 25 or come from a low income family you can get a student allowance of about $187 a week. Most student don't fit this criteria so they borrow instead. This student allowance will eventually be extended to cover all full-time students. This will cost a lot though.
When my father went through university he had these priviledges, but back then only about 2% of the population went to university. NZ now has the highest rate of university graduates per capita, after Ireland, so it's pretty expensive for the government to do this, especially with an aging population to finance as well.
Basically there are people here ending up in your situation which is not something a society like ours which has traditionally supplied social services free to the consumer is used to. Dealing with this is a big political issue here these days.
Last edited:
musclebrains
New member
There is a movement afoot -- an actuall bill in Congress, I think -- to increase the amount that undergrads can borrow since current loan ceilings haven't kept pace with the increasing costs of education. However, there is a counter-movement, led by former students, to keep that from happening, since the loans are such a burden after graduation.
Of course, Dubya's crowd has made noises that it wants to end the federal loan program altogether. Big surprise.
Of course, Dubya's crowd has made noises that it wants to end the federal loan program altogether. Big surprise.
Baby Gorilla
New member
Uh....
Fact, a college education is not worth the money you pay for it. Academia does not cut costs like other businesses. Now, the market is oversaturated with educated people and jobs that never required a degree are now requireing them because of how commonplace they are.
Fact, technical schools can't compete because preference is given to a college degree (which basically means you spent $$$ on a bunch of BS classes you could live without).
Students (and the job market) can't subsidize the amount of student loan debt people are graduating with. I owe over $80K. I don't think my education was worth half of that. Something has to change.
Kill the cash cow, and you starve the overinflated price of schools. In people go to private lenders, bankruptcies will skyrocket unless the job market starts paying better.
Something has to happen.
Not to make myself a target, but maybe they should.musclebrains said:
Fact, a college education is not worth the money you pay for it. Academia does not cut costs like other businesses. Now, the market is oversaturated with educated people and jobs that never required a degree are now requireing them because of how commonplace they are.
Fact, technical schools can't compete because preference is given to a college degree (which basically means you spent $$$ on a bunch of BS classes you could live without).
Students (and the job market) can't subsidize the amount of student loan debt people are graduating with. I owe over $80K. I don't think my education was worth half of that. Something has to change.
Kill the cash cow, and you starve the overinflated price of schools. In people go to private lenders, bankruptcies will skyrocket unless the job market starts paying better.
Something has to happen.
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