Student Loans: Debt for Life. (Corrects the 20th paragraph to provide a more recent total for student loans owed by people 60 and over: $43 billion rather than $36 billion.
Corrects position of the National Association of Student Financial Aid Administrators on legislation introduced by Senator Al Franken.) This much we know: College pays. You can lose your house to foreclosure, but never your education. Four-year college graduates’ pay advantage over high school grads has doubled over the past 30 years. If money for tuition is tight, the advice goes, borrow what you need. If student loans are good debt, how do you account for the reaction of Christina Mills, 30, of Minneapolis, when she found out her payment on college and law school loans would be $1,400 a month? Even if you buy into the notion that education debt is good debt, at what point does it become too much of a good thing? “The question isn’t the debt per se. That’s the value side. Better disclosure would help, too.
Recent Rise in Federal Suits to Recover Student Loans. Victory! Dept. of Ed Confirms Student Loan Default Is Not Criminal. When you saw the news reports last week of a man being SWAT teamed for not paying his student loans , you may have wondered: are they coming for me next? Well, worry no more. The team from the film Default: The Student Loan Documentary started a petition on Change.org to end this rampant confusion about whether or not students with outstanding loans could be criminally prosecuted.
And they're declaring victory today, as the Department of Education released a statement, saying that defaulting on your school loans is not a criminal offense. Sara Gast, spokesperson for the Department of Education, made the distinction. Students can be arrested for criminal activity like fraud. "Generally, defaulting on student loans is not itself a crime," said Gast. Kyle McCarthy, director of community outreach for Default, says the clarification is a victory for students.
He credits the over 300 petition signers on Change.org who asked the Department of Education to clarify their position. everyday. Student loans: Holding transcripts hostage. Students traditionally have a soft spot for their alma maters.
But as growing numbers of students run up debt in the high five and even six figures to pay for college, that may change. Especially when they discover their old school is actively blocking them from getting a job or going on to a higher degree. That's what increasing numbers of students are finding when they try to obtain an official transcript to send to potential employers or graduate admissions offices.
It turns out many colleges and universities refuse to issue these critical documents if students are in default on student loans, or in many cases, even if they just fall one or two months behind. This is happening at a time when recent grads are finding it particularly hard to find work, not just in their chosen fields, but anywhere. It's no accident that colleges are using the withholding of official transcripts to punish students behind in their loan payments. Many More Students Are Defaulting Than Official Tallies Show - Government.
By Kelly Field The share of borrowers who default on their student loans is bigger than the federal government's short-term data suggest, with thousands more facing damaged credit histories and millions more tax dollars being lost in the long run.
According to unpublished data obtained by The Chronicle, one in every five government loans that entered repayment in 1995 has gone into default. The default rate is higher for loans made to students from two-year colleges, and higher still, reaching 40 percent, for those who attended for-profit institutions. The numbers represent thousands of students like Lourdes Samedy, of Boston, who ended up defaulting on about $7,000 in student loans after completing a nine-month-long medical-assistant program at Corinthian Colleges Inc. Everest College, and now cannot get a job. For loans made to community-college students, the 15-year default rate is 31 percent. "It's really just a tragedy given the consequences of student loan default," he said. Defaulting on Student Loans. This section of FinAid provides information to students who are thinking about defaulting on their federal education loans.
It summarizes the consequences of default, gives advice on how to avoid it and, if you're already in default, how to get out of it. See also Trouble Repaying Debt. A separate page discusses how to settle defaulted federal student loans for less than what you owe. You are responsible for repaying your student loans even if you do not graduate, have trouble finding a job after graduation, or just didn't like your school. If you do not make any payments on your federal student loans for 270-360 days and do not make special arrangements with your lender to get a deferment or forbearance, your loans will be in default.
Note that student loans are now generally not dischargeable through bankruptcy. Almost three-quarters of students who default on their loans have done so after withdrawing from school and failing to complete their studies. Other helpful web sites include: Default: the Student Loan Documentary.