This Picture Will Make You Think Forgiving Student Debt Isn't So Crazy After All

[haele]

60. Her sign says it - "No Bankruptcy or Forgiveness Allowed"

My husband took out around $10K in student loans before his wife at the time decided to empty out their bank account and run off with his business partner. Even with the time-stamped bank camera and the bank statements and withdrawal slips, plus the divorce papers with her putting down the separation date and her "new address" starting the day before she emptied the account at the drive-through teller, it was not considered "theft" so he still had to pay it off.
He ended up in the hospital for a while soon after and got a temporary loan modification granting him a "grace period" until he became employed again - during which the interest continued to pile up so that he ended up owing over $20K when he was able to start paying. He had to come up with child support, so he had to modify the loan again, so interest continued to pile up as he couldn't pay off the new principle (original plus accrued interest) and the monthly compounded interest on that new principle. Then he became totally disabled - but he didn't get what most people would consider "forgiveness" - he just didn't get hit with any more compounded interest added to what he owed. It took him 15 years to finally pay off the $10K loan his ex-wife ran off with.
From 1991 when he took out that $10K loan to , he (and I) ended up paying around $42K to pay it off. If he hadn't been hospitalized and unemployed for a year and a half, and then became disabled a couple years later, he probably still would have ended up paying $20K for that $10K loan.

All it takes is a period of unemployment, and you're sunk.
Educational loans are a profit machine for lenders - unlike most other loans you are forced to keep paying them off until you die - even getting SSDI due to a permanent disability doesn't really "save" you or your caretakers from paying off an education loan - if the lenders decide that permanent disability doesn't fall under the definition of total disability...
Another money maker for the education loan people is that they will allow you to pay less than the interest if that's all you can pay - and if you've been laid off, cutting a loan payment on a Master's Degree from $200 a month to $50 a month may be the difference between a roof over your family's head and the street - and they add it to the remainder to the loan.
Not to mention the unsecured "education" loans that start adding interest as soon as the money is disbursed, but don't require you to actually begin payments until six months after you finish going to school so that you usually owe twice as much as what you borrowed by the time you begin to pay it off.

Unless your parents can come up with the money to pay for your college or tech school education (- and a regular personal loan might be less expensive in the long run!-), you're pretty much stuck with whatever might be available beyond Pell Grants, the secured Stafford (between the two of them you might get enough to pay for a public Jr. College or a CC - certainly not a Bachelor's in any of the STEM or better paying subjects) and any scholarships you might be able to snag if you're lucky and your grades are flawless. And what might be available will most likely keep you in debt bondage for at least a decade unless you get that high paying job right off the bat.

Haele