This seems to be an ignored issue and that many young adults and families are dealing with and have fallen victim to. So much attention and options were given to the subprime lending for the housing market, but not much for the private student loan subprime bubble between 2005-2008.
In our case the school was no help either, not letting my daughter withdraw without owing them after not getting a loan when the private lender tightened their credit standards and private lender not accepting a cosigner with good credit. School has held transcript for first 3 semesters even though only the last semester had a balance. So she cannot attend another college until it's paid...this while her private student loan's grace period quickly arrived, so there went the in-school deferment option! This along with job loss and medical issues in family didn't help.
This to me has taught me a lesson. My second child goes to a state college and we will appropriately stay in our "lower class" (said with sarcasm and distaste) because the "haves" will always look out for their best interests and play "legal" self-benefitting "financial win" games and ignore the "have-nots" in economic downturn.
Now that our family has learned a lot and are recently doing better financially, we are looking at ways to rebuild our credit, but daughter now has a charge-off on her credit because lender would not negotiate reasonable terms during extremely difficult times. Not sure if this is a life sentence for her even when we pay it because it's technically a school loan. Makes me wonder how many families and young people are in a similar situation and how this affects our nation's overall economy prospects including housing.
Mom of studentof PA1:45PM January 05, 2013
Looks like there is little to no hope for the existing borrowers that can't even provide a good life for their family due to private student loan debt. I feel like I've been sold into financial slavery the rest of my life.
Stephof OK12:43PM June 23, 2012
This site is helpful and most informative for students who are applying for educational loans. Through this post students can acquire some tips and advices for education grants. http://www.privatestudentsloans.net/
student grantsof LA7:00AM June 02, 2012
Ask Senators Durbib and Harkin about DoED's little
hidden "fine print" while they blast the Private Sector
and sing the praises of IBR. Once you enroll in IBR your payments are based on your AGI, annually. If you get married lateron you can exclude your new spouse's income from the annual re-calculation of
payments, right? Not really. What they don't mention up front is that you have to re-qualify for
IBR itself. That INCLUDES spouse's income and can
cost you that right to exclude it from payment calculations. They DESCRIBE how payments are calculated annually but they HIDE the annual
Re_Qualification rules.
Chuck Blankenshipof CA4:53PM May 04, 2012
This is the quiet economic killer right now in America and its potential consequences are enormous for the next 30 years! The generation of our population that should driving the economy, buying houses starting families and making their first large purchases are crippled with debt because they chose to get an education to better themselves.
Most are forced to take jobs that have reduced the wages or salaries in the fields during the last 10 years. What people don't want to talk about is the amount of college graduates who DID find jobs after college who live with their parents because they make 25K-45K and have $600-$1,000 in loan payments to make monthly. These young professionals are the ones who should be buying houses, cars, and saving.
I will for the first time in my life say the federal government has done great with this... atleast the repayment portion of the process, by helping graduates with things like Income Based Repayment programs. Everyone who borrowed money should have to pay a monthly return however it HAS to be one that they can afford to make; otherwise we are starting witnessing the beginning of another banking industry catastrophe. The private lenders need to get their program together so they can get the money they can from loan holders and try to prevent the large number of defaults they will be experiencing under their current programs.
My personal opinion is that there should be income based repayment on all loans and student loans should expire after 20 years. If providers are not willing to give loans out in that market then that will slow the easily available stream of money on the front end and help drive down the costs that universities can so easily charge every year. Currently universities raise tuition and students within ten minutes on the internet get the money they need to meet the required increase in cost, most of them are several years into college, they are not going to say "well they raised tuition this year by 7% that's it I quit 2 years in."
Sorry I got off on a rant there. Thank you for this piece! Let's keep it coming!
We need to establish something to help this generation of young professionals take back the buying power they need to help drive our economy.
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Mom of student of PA 1:45PM January 05, 2013
Steph of OK 12:43PM June 23, 2012
student grants of LA 7:00AM June 02, 2012
Chuck Blankenship of CA 4:53PM May 04, 2012
Luke of MI 10:52AM April 13, 2012
Karrie of GA 10:27AM April 04, 2012