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Hmmm...a credit card that won't be bankruptable (as federal student loans are not now) issued by a lender who can garnish my wages if I don't pay? No thanks.
@rugman11:
I agree that this would be one of the worst ideas because of that reason. Credit cards are bad but at least you can get rid of the debt via bankruptcy but the government you will be in debt for the rest of your life. You thought credit card companies were bad wait until they know the only way out is death.
@rugman11: This would be my only concern with it. The unbankruptable issue with student loans does not work in the current state. In the situation of student loans there should be a few situations where they are dischargable. They should absolutely be vacationed for people in a severe financial difficulty until they are back on their feet. Having that same heavy handed situation on a credit card could be a problem. It isn't a matter of people refusing to pay but more likely medical disasters or other major life events that impact people's earning ability. Student loan is collecting on people on soc. sec. disability. I find that wrong.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-930037-100x100.png\")
@bohemian:
Perhaps people shouldn't take on more student loans than they can afford to pay back. I don't feel bad at all for people that take on tens of thousands of dollars in student loan debt, without evening thinking about what it will take to pay it back later. Granted, some fault lies with the educational institutions (including High Schools) for failing to properly teach basic finance, but most of the blame falls on the borrower/student for failing to make a reasonable inquiry as to how much it's going to cost to pay back the loans. For the record, I do have student loans, very heavy ones ($150k), but I knew exactly what I was getting into when I signed on the dotted line (or, actually typed in my DOE PIN).
@Esquire99: My problem is that my goals changed once I entered a PUBLIC grad school where more than half my debt is from (113K with interest). I got a private education @ 25% the real cost...just didn't take into account the housing costs for grad school bc NYC housing costs are so incredibly low...
Oh well I'm looking forward to that 1st steak in about 10 or 15 years. It will be the best tasting steak in the world!
@Esquire99: Oh, hey, good luck with the legal market! I don't think its that people go about taking out sums as large as yours without some idea of what they want to do. The problem is that college takes at least 4 years and in that time the economy can change a lot.
@HRHKingFridayXX:
I agree that the economy change during college, but the problem is people don't even take into account how much the payments will be, and what kind of salary they will need to make those payments.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-117249-100x100.png\")
@Esquire99: Some people, though, do take all of that into account. A friend of mine is an attorney - graduated law school in 2006. In 2007 she finished a clerkship and left to go to a rather nice law firm. In mid-2007, the law firm broke apart, downsized, and now she's out of a job. Then, the economy imploded.
In 2003 I knew a guy who got into a car accident and his insurance, essentially, bailed on him. Between being sued and suing the insurance company, he went six-figures into debt. Because of the physical injuries, he was out of work for several months and ended up losing his job. To get health insurance, he started working as a store manager at a store in the mall. He also had to file for bankruptcy -- which discharged his credit cards, but not the student loans he was paying on.
Sometimes, just sometimes, shit happens to people. Because we're human, we're not perfect, and when we act imperfectly, bad things tend to happen.
@joellevand:
I agree that, occasionally, people just get shit on. Student Loans are indeed dischargeable in very, very limited circumstances; you have to essentially show that you will never be able to pay them back because you simply don't have the earning capacity. However, the majority of people that are \"saddled\" by student loans haven't been \"shit on\", they made poor (or uninformed) decisions and are simply unhappy with the results. There is always an exception to the rule, and I can accept that. However, the exception should, and does, only apply in very limited circumstances.
Personally, I don't believe in personal bankruptcy, except in incredibly limited and exceptional circumstances. I don't think people should be able to so easily walk away from their obligations. Granted, there are some very, very narrow circumstances in which I understand that bankruptcy is needed, but I feel like the current laws are way, way to loose and allow people to run up debt, live the good life for awhile, then walk away when they finally roll snake eyes. I realize that's a bit over-simplistic, but it gets my point across.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-6173-100x100.png\")
@Esquire99: My entire law school graduating class came into the just-post-9/11 legal market: Suddenly and horrifically crappy. Coming out of a top-10 school with top-10 loans. People who should have been able to get six-figure jobs struggling to find anything.
They're not defaulting, but I have plenty of classmates who will be paying off student loans until they're literally 60 or 70 years old. That's simply unreasonable. If you don't go right to that top-firm job after graduation, it's a difficult transition to make later on, and there simply wasn't the top-firm work right after 9/11. They didn't make poor decisions -- they got hit with a horrific economic event. But their top-firm earning potential is gone unless they went right to that top firm ... and they still have top-level loans to pay off.
@Eyebrows McGee (on Twitter: LPetelle): Tough. People took out the loans and have to pay them back. I have 100k plus in student loans and I'm not about to say I was too stupid or the system tricked me into them. Seriously, man up and take some personal responsibility.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-86968-100x100.png\")
@taney71: The problem is that they cannot be paid back in many cases, due the accruing interest and fees. If you took on student debt in 2005 to go to Harvard Law and graduated today, you would probably not be able to find a job that could make the loan payments and still allow you to do things like eat food and sleep indoors. Even if the median graduating salary is high enough to pay them back, fully half of the people graduating make less than that. Everyone likes to think they're above average. Only a 50/50 shot though.
@huadpe: And that is a risk they take. The federal government shouldn't provide them with a safety net for making stupid or risky decisions.
@huadpe:
While that's true for some Law Schools, if you go to Harvard, Yale or Standford, so long as you're not at the absolute bottom of your class and you're not a social retard, you'll be able to get a great job. If you want to work at a large law firm, which pays $160k, out of Harvard you'll get it so long as you meet the above criteria. Even though some firms are delaying new associate start dates, the ones that are pushing them way out are giving those associates $75k to go work at a non-profit for a year. The ones that aren't getting pushed back will start in the Fall, or at the latest January, pulling in $160k. Graduates from lower-ranked law schools, particularly those outside the top 30 or so, will have a hard time.
I have even less sympathy for law students who bitch about the debt, as they already had 3+ years of undergrad done before they decided to go to law school, so they should have had the sense to look into the statistics. Unfortunately, everyone thinks they're going to be in the top 10% of their class, so that tends to throw off any common sense.
@Esquire99: Simply not true, and the law schools cheat the numbers. Particularly not true graduating into a crappy economy ... but the law school still cheat the numbers. \"Go to our T10 and 50% of you will go to Big Law\" ... when it's more like 25% and half of THEM get pushed \"up or out\" within five years.
One of the biggest ways they cheat the numbers is to not count women who stay home (temporarily or permanently) with children. Those women often end up in lower-paying jobs or part-time work, so it behooves the law schools not to count them.
You can also look at the percentage of their graduates they claim are doing \"public service\" law, versus the much lower percentage who qualify for LARP.
@Eyebrows McGee (on Twitter: LPetelle):
At a school in the Top 14, at least 50% of the class will get BigLaw if they want it. This year, at the lower T-14, it might have been closer to top 40%, but at Harvard, Yale, Stanford, NYU, Chicago, Columbia, firms go really, really deep into their classes.
As you should know, the students at the top schools usually have their offers of employment in hand a full year before they graduate, so there is no \"Search\" after they graduate, unless they screwed they second summer and got no-offered. I'm not going off the numbers the law school gives out, but off a number of independent sources that compile their own data (NLJ250, Vault, etc.).
You're definitely right on the up-or-out, but a little research on a prospective students part will reveal that, so it shouldn't be a shock. Perhaps the market has changed since you graduated in 2001, but the way it is now (though that may change this coming fall) anyone in the top 50% at a T14 will get BigLaw (or a clerkship, followed by BigLaw) if they want it and can interview reasonably well.
Take at look at this chart put out by the NLJ:
[www.law.com]
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@Esquire99: so your solution is don't go to college unless you can afford it strait out kind of like how the system worked back when only the rich went to school and the poor worked coal mines?
yea cause that's a good idea.
I think a better Idea is for state schools to become cheaper and better funded. You really can't go that much into debt at a state school. I will walk away with (if you combine my art school loans) 50k, but almost half is from a private art school in which my mother has the 60k extra.
Back on topic government should not issue credit.
@Skankingmike:
That's absolutely not my solution. However, I do think people need to sit down and do a true cost-benefit analysis regarding the cost of their education. I don't think that someone who wants to go to college, and believes it to be the best decision for them, should be prevented from doing so because of the cost. However, it's important for people to know what they are getting into, and most don't. Some people want careers that don't require a degree, yet the rack up a bunch of debt anyway at expensive private schools. Some go to private schools for the \"prestige\" when a public school would get them just as far for 1/4 the cost.
What I DO have a problem with is those who go to school, rack up a bunch of debt, then graduate and bitch nonstop about how big of a burden their loan payments are, or that they're shocked they are so high. It's no longer a reality that you go to college and come out rich. Lots of college grads struggle for a long time, but there's nothing wrong with that. Yeah, it would be great not to have the student loan burden, but that's just not reality. I think there needs to be more disclosure by the educational institutions of how much it's going to cost to pay back the loans before the student enrolls and takes on the burden.
I'm actually one of the lucky ones that didn't bother with college, have no student loans, and made 180k last year, 120k this year. I chose an industry where people who didn't get higher education thrive and can make more than people with a degree.
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I think you have a point, but could the payments be adjusted to accommodate the fact that recent grads are NOT making the kind of money they used to, in an economy that is going belly-up? Is it necessary to kick people in the slats when they are trying to utilize that degree, and are just starting out?
A program about this for high school students would be awesome.
@HogwartsAlum:
Most lenders have income-based repayment options, though you end up paying through the nose in interest. My ultimate opinion is still that college (undergrad, graduate, medical, law) is nothing but a gamble. You're essentially betting the houses money (loans), and if you graduate and get a good job, you \"win\" and are easily (relatively) able to pay back the loans. If things don't work out as planned, due to your own fault (frequent, direct or indirect) or no fault of your own, you \"lose\" and have to pay the house back however you can. I don't think that those who \"lose\" should get any sort of break, save for making sure the payment doesn't actually exceed their income (lenders have programs for this in place, with caveats). They gambled, and they have to live with the results. Personal responsibility for the win.
I don't mind paying it back; I just can't pay exorbitant payments. At least not until I start making more money.
I can barely pay anything. But when I'm able to, I want to PAY IT OFF.
@taney71:
Law students at top schools tend to have a sense of entitlement to top firm (and top paying) jobs, and they act like the world has totally screwed them when if they don't land one of those positions. While the odds are overwhelmingly in their favor that you'll land one of those jobs(those at Top 14 schools, at least), it's still not a 100% lock. However, they go in assuming that it is, ignoring reality. While it's a good gamble, it's still a gamble and you run the risk of crapping out.
@Eyebrows McGee (on Twitter: LPetelle):
I totally understand that, but that's a risk they took by taking on $150k in loans. Even from a Top-10 school, a BigLaw gig isn't guaranteed. However, with a Top-10 Law degree, they should still be able to out-earn most people, and thus will have the economic capability to pay back the loans. Sure, it may be a burden, but it's not an insurmountable one. It's not like they didn't get anything out of the deal; they got an education from one of the best law schools in the country, why should they be able to get away without paying for it just because it's a burden to pay back?
Unfortunately, a lot of the current law students are going through the same thing right now. Many firms are laying off, cutting summer programs and deferring start dates. Some students who have summer gigs lined up will come out with offers and have no trouble paying back their loans. Some will get no-offered and will have a hard time making their loan payments, but they will still, over their lifetime, most likely substantially out-earn the average american. Trust me, I'm intimately familiar with the concept that it's basically a one-shot deal for BigLaw, but I certainly don't feel like I shouldn't have to pay back my loans if it doesn't work out.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-926607-100x100.png\")
@Esquire99: @Esquire99: Fat student loan debt isn't just a problem for people with expensive law degrees, but for a huge and growing segment of the undergraduate population - and it has little to nothing to do with personal irresponsibility.
Saying that people \"shouldn't take out student loans they can't afford to pay back\" is asking students entering school to look 4, 5, 6, 20 years into the future of the life of their loans and know exactly what the economy and their career paths are going to look like. It's not just \"oh a few people get shit on,\" but most people can't avoid taking out loans that then put them into a kind of lifetime debtor's prison.
It's myopic to put all the blame on students when the system forces them to take out loan upon loan just to get the base level of education needed to get and remain employed.
Exactly!
And you get hit with all this \"Oh a college degree will help you get a better job, blah blah\" bullshit and what are you going to do? Even something simple and not specialized like law school can cost a lot, even if you apply for programs and work study and grants, etc. etc.
I have two degrees and I'm answering the goddamn phone. I'm about to get hit with paying it back (I dropped out of grad school recently because I just didn't want to waste any more money) and they are just going to have to take what I can give them. This is not what I thought would happen.
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@veg-o-matic: word.
you may have a house or a family or an education. IF your lucky enough to be employed enough to afford one.
yes - ONE. not 2 or 3. ONE.
@veg-o-matic:
I 100% agree that education is way too expensive, but that doesn't justify going to college blind to your future earning potential versus your debt load. Most students don't even bother to find out what the payment after graduation is going to be when they take out loans for school. That's irresponsible.
I agree that trying to predict your career, the economy, etc. is tough, but that's no excuse to not at least know what you're getting into. My sister is about to graduate from a private college in TX with an Arts degree, and until recently had NO idea how much her loan payments were going to be.
I also simply can't accept that just because things don't work out after college (your \"Bet\" doesn't pay out in your favor) that you should be able to walk away from your obligation to pay back the loans just because paying them back is a burden.
I do think a large part of this problem comes from poor parenting, a lower education system that doesn't teach any sort of personal finance (most schools, at least) and a culture that has taught students that it's IMPOSSIBLE to be successful without going to college, and that you MUST go to the best undergraduate institution you can get into, regardless of the cost. However, even given these structural problems, I can't relieve the students of the responsibility to at least do a little due diligence before they sign their lives away to student loan payments. If you're smart enough to get into college, you should at least be able to do the math (hell, there are 1000 online calculators for it now), or ask someone about repayment.
@Esquire99: I agree that no one should go into a loan unaware of the terms, and I also agree that no one should knowingly and purposefully walk away from the obligations that a loan represents.
However, it is still true that the student loan industry thrives on undereducated borrowers (iiiirony!) as well as on disturbing school-creditor agreements that funnel new students straight to certain banks. Everything is weighted against students right from the start. At a certain point, it doesn't matter how educated and financially aware a student is, they're the \"very little\" guy against the \"hugenormous guys.\"
My argument wasn't mean to advocate for student loan delinquency as a \"solution.\" It was simply that, given the educational system under which we live, it is inevitable that large numbers of students will either be forced to stop paying their student loans or will find themselves stuck in a near-poverty situation.
I fear that an attitude that only faults \"lack of personal responsibility\" for student loan problems is also one that encourages the already socioeconomically disadvantaged to simply never go to school.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-16563-100x100.png\")
@veg-o-matic: Particularly since Boomers turn their nose at supporting schools (as previous generations supported them: nice!), resulting in the revenue shortfalls shifting to students. It's not just elite students (although it's highly unproductive economically to throw them to the wolves), it's all students. And it's rotten.
Infrastructure and personal capital (that's education, for the non-MBAs/economists out there) are the only clear-cut virtuous expenses the State has. Piddling on them to save a few pennies today is highly counter-productive and immoral.
@Trai_Dep: Sorry but previous generations didn't support schools at the same level we currently do. You take the dollar about in the 1950s, 60s, 70s, etc. and fix for inflation and we pay much more than previous generations do. I am talking about local, state, and federal taxes btw. No longer is eduction being paid by the states...it's a federal matter post-Eisenhower and esp. because of George W. Bush.
@rugman11: If you can't pay, you shouldn't have gotten it in the first place, or maybe realized you shouldn't spend more then you earn.
@Jonbo298: climb down off your self righteous horse. plenty of people pay bills & live w/in means just fine.
until they get laid off, get in a wreck, get a major medical incident, become widow(er), etc.
@Jonbo298: Wow, way to completely miss my point. Why would someone want a credit card where they have no leverage with the lender and could potentially be jailed for defaulting?
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-257467-100x100.png\")
@rugman11: Considering how many people are jailed for non payment of dollars that come from federal hands now...
Plus, that misses his point, which is \"don't spend it if you can't afford it\"
@rugman11: Jailed? I've never heard of anyone being jailed for defaulting on a student loan or a federally backed mortgage or SBA loan.
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![[www.law.com]](\"http://www.law.com/img/nlj/charts/20090223gotoschools.jpg\"){kind=link}
![[www.law.com]](\"http://www.law.com/img/nlj/charts/20080414gotoschools.jpg\"){kind=link}
I don't use credit cards.
But if I did, I think I would rather use this than one where I get hit with stupid-fees. I'd need all the details on the gov't card to be sure one way or the other, though.
@TalKeaton: Huh? Most CC's dont have an annual fee.