Korean Job Discussion Forums

[madoka]

And you guys complain about a measly $20,000. . .

Full article at link:
http://online.wsj.com/article/SB10001424052748703389004575033063806327030.html?KEYWORDS=student+loan#articleTabs%3Darticle

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.

Although Dr. Bisutti's debt load is unusual, her experience having problems repaying isn't. Emmanuel Tellez's mother is a laid-off factory worker, and $120 from her $300 unemployment checks is garnished to pay the federal PLUS student loan she took out for her son.

By the time Mr. Tellez graduated in 2008, he had $50,000 of his own debt in loans issued by SLM Corp., known as Sallie Mae, the largest private student lender. In December, he was laid off from his $29,000-a-year job in Boston and defaulted. Mr. Tellez says that when he signed up, the loan wasn't explained to him well, though he concedes he missed the fine print.

Loan terms, including interest rates, are disclosed "multiple times and in multiple ways," says Martha Holler, a spokeswoman for Sallie Mae, who says the company can't comment on individual accounts. Repayment tools and account information are accessible on Sallie Mae's Web site as well, she says.

Many borrowers say they are experiencing difficulties working out repayment and modification terms on their loans. Ms. Holler says that Sallie Mae works with borrowers individually to revamp loans. Although the U.S. Department of Education has expanded programs like income-based repayment, which effectively caps repayments for some borrowers, others might not qualify.

Heather Ehmke of Oakland, Calif., renegotiated the terms of her subprime mortgage after her home was foreclosed. But even after filing for bankruptcy, she says she couldn't get Sallie Mae, one of her lenders, to adjust the terms on her student loan. After 14 years with patches of deferment and forbearance, the loan has increased from $28,000 to more than $90,000. Her monthly payments jumped from $230 to $816. Last month, her petition for undue hardship on the loans was dismissed.

Sallie Mae supports reforms that would allow student loans to be dischargeable in bankruptcy for those who have made a good-faith effort to repay them, says Ms. Holler.

Dr. Bisutti says she loves her work, but regrets taking out so many student loans. She admits that she made mistakes in missing payments, deferring her loans and not being completely thorough with some of the paperwork, but was surprised at how quickly the debt spiraled.

[.38 Special]

This is a sticky issue. But I have to wonder what fine print they are referring to.

Yes, you have to pay back your student loan. No, you cannot simply stop paying on them without repercussion. It is, after all, a loan and not a grant.

However, I will agree that the cost of tuition raising many hundreds of percent against inflation every year is a problem for students.

An anecdote: When I began university, tuition, housing, and all fees were just over $16,000 for the year. My fourth year cost over $23,000. That is $7,000 dollars increased in 3 years.

That's pretty ridiculous and I'm very glad to be out before my third rate university inflates to rates higher than Harvard.

[CapnSamwise]

USA USA WOOOO YEAH
*drinks a beer*

FUCKIN COMMUNIZED SOCIALISMS! WOOO

[bigtexas]

insane.......just insane

[Mr. Pink]

Insane is how greed can punish those who are trying to get a start in life. I still can't get over how a collection agency can attach a 50k fee. In Canada they just couldn't do that. The agencies get their fee as a percentage of what they recover and you can always go to court and try to get an award for a lower amount.

How much do doctors make in the US anyways? In Canada she would start at probably close to $200,000. If she went up north, it could be like double. That is enough to pay off the loan in a couple years.

She should join the military and get them to pay off her loan

[komerican]

There's no incentive for universities to reduce tuition since the higher they charge the more they get from the government.

[CapnSamwise]

Yeah pretty much. But, look at it this way: At least it's not socialism!

*eats ramen because student loan payments are 110% of his monthly income*

[HalfJapanese]

Slavery through the use of money; one will never bee free b/c they will always own money to the international banking cartels.

[mises]

[PigeonFart]

What would Suzie Orman say about all this? ...tut tut.

[Jeonmunka]

[jugbandjames]

She won't have to pay it off if she can't afford it. She can just do an income based repayment plan and after 30 years the remaining balance goes away. Or she could just work for a VA hospital or something and it will go away after 10 years.

Although, as a doctor it wouldn't take long to pay off 500k in debt. My cousin save 1m after his first 6 years out of residency--that was with a family, kids, and buying a house.