Student loan documentary

[MRHTOAD76]

I'm sick of people that are sick or victims , or blaming the victim. First his dad was going to co-sign not pay for. Second Bill Gates, etc are respected for going there own way. If it works your good if it doesn't your a dummy how does that work? Yes I agree he should have had more sense ,but when you stop and check your ego and actually look at the situation like in most cases you realize that it is about more than just that. People are complaining that they are tired of stupid people yet we are all stupid people!

I'm not meaning to zone in on any 1 post or anyone 1 person ,but come on people!! We are taught over and over to consume, buy, use and then when we do we are morons. You are told to go to school and buy a house and that you will be then living the American dream. When it doesn't work for you its your own fault for being stupid. Do a google search on "I bought a house I could afford" or similiar and you will see these same people saying how morons shouldn't have bought a house they couldn't afford etc etc this is stupid. It must be nice to sit back and realize that you are smarter than everyone else and still be ignoring the big picture. Since they didn't lose their home its easy to sit back and say well its their own fault for buying out of their league or buying a house they couldnt afford if they got laid off. Or well maybe they shouldn't have refinanced so many times...

Why did they buy the house, why are people having babies, doing drugs, having student debt. The reasoning behind why they did it / are in the situation they are in is SOOOO much more important than the end result. We need to stop treating the symptoms and fix the problems! This is a cyclical-drain downward spiral! (Circling the Drain)

It is so easy to sit back and say haha look at that dumb person or Caveat emptor ,but is that really the world we want to live in? Don't come crying to us because you got taken advantage of by that company. Where does it stop then? Don't come crying to us that you were in that dark alley? that you were in that part of town (must have been trying to get drugs), that you live in that state, are we becoming that sick and morbid (reality shows) that we really enjoy and like to see people suffering?

So because he didn't follow his fathers dreams for him he is a moron who deserves whatever he gets in life? Everyday we are bombarded with consume, spend,buy ,and be your own person ,but then when someone goes and does just that but does not succeed they are dumb. What about all the people who went to law school or pursued becoming a doctor who are working at Walmart what about them? If the majority don't make it, then it isn't as simple as well he didn't get the best grades or he was just dumb. The issue is not that cut and dry... cmon!

The game is go to school so you can succeed, have kids and buy a house. If someone gives you an opportunity to do what you have been told is success your entire life who is going to pass that up? The side-effect of this game is being saddled with so much debt you will be never break free. Kind of like our goals in medicine. We don't care about a cure or treatment just make them live longer where they have to keep buying our drugs. Matter of fact lets start drugging them at a younger age so we can make even more money.


(no I don't know this guy and sorry for the long rant I'm just sick of hearing all this one-sided victim bashing. None of us are perfect and none of us are as smart as we think we are so we ALL need to go back to trying to actually put ourselves in others shoes before judging.)

[frankiebleyes]

Thanks I needed that! Sort of how I feel about my personal situation lost everything due to two people being seriously ill, despite having supposedly good medical insurance. Did not file bankrupty but couldn't buy a hot dog on credit and this after working all my life, never being late with a payment and not asking to have cancer and a heart condition. Of course, I also wanted my 19 year old to become mentally ill and the government not provide any programs for him and $80,000.00 in debt for hospitalizations (for those of you who don't know it our wonderful government only makes insurance companies provide 50% coverage for the same medical coverage they would provide for any other treatment). Bipolar and schizo are physical impairments (brain chemistry), but they are only paid at 50% of the approved charges. After reaching my sixities and realizing that I no longer am considered a good person (because my credit is in shambles and my husband's portfolio was eaten up by medical bills), I learned the hard way about being humble.

Student loans are dangerous and so is the better than though attitude of a lot of people. You never know when you can lose everything through a job loss, an illness or two family members becoming ill, it doesn't matter how good you did in the past, you are judged by the present. Personally, I feel that part of this young man's problem should be blamed on the culniary school and some of his debt should be forgiven. Not all, but some.

[clydosaurus]

Bad, unexpected, unforeseeable crap happens to people -- disability, catastrophic illness, children with special needs - there is no way to prepare for such things. You cannot compare that carnage to signing the dotted line on a loan you had no hopes of paying back or racking up CC debt to maintain an unrealistic lifestyle (as opposed to "abusing" CCs to pay for medication, keep the lights on, food, etc) under the guise of "American Dream". Totally different scenario. People who bought homes they could not afford with an ARM that would triple the payment in 3 or 5 years (while income had no hopes of changing) is plain nonsense. Do you realize how many people kept running up credit cards and refinancing their homes and debt just because they could?

I do feel sorry for people because now they cannot unload their homes, which was probably the plan, that part was unexpected, the ARM, no, that was no surprise. At some point you have to wise up and realize someone is trying to sell you something and YOU have to look out for your best interest, because no one else is going to -- after the commission is paid, your sales guy is gone. Immediate need is usually IMMEDIATE WANT. You don't have to go to a top private school and major in underwater basket weaving. Face it, those dreams are for people who can pay for it NOW. Thats what these people wanted to do, not what they needed to do. You don't need to buy a home or car with all the bells and whistles, you don't need to keep having children when you can't afford them. Not all dreams will be a reality, folks. Maybe thats the problem, the ridiculous idea that everyone with mediocre ability will be at the top of the world. That was never the case. Bill Gates is not the typical person. If you could barely squeak through undergrad pre-med program and fail medical school -- that' the risk you take. No one put a gun to these people's heads.

I do blame predatory lending, but people still have to be responsible for themselves. If you drain your retirement to send your kid, who has questionable grades and level of maturity to college, you take that risk. I hope it works out. It doesn't matter what I think, or anyone else, all these folks have to face the sad, unfortunate, consequences themselves.

I've put off marriage, children, everything because I knew I couldn't afford it, and am very much aware that jobs are not secure. People tell me, "oh, well, people don't think like that.." maybe they should. Believe me, I fell into a consumer debt trap that took a ton of sacrifice, time,shame and money to get over. Now I can differentiate between needs and wants and know what level of financial risk I'm willing to take. It was my fault, just mine, and I paid for it dearly. I resent that people blame everyone else for their bad decisions.

The student loan pit inflates interest, something needs to be done about that. If students had a lower rate or just had to pay back the principal, it would be manageable. I don't look at people who fall into stuff as lesser stupid folks -- just very naive. I hope they are able to learn and recover.

[mrs.b]

Education is important. We are all here, in the Off-Topic section of an education-oriented web forum, because we are seeking the same benefits of education these people did. Education and obtaining a degree has a noted benefit; we have all cited the statistical analyses that show the reduction in unemployment, increased advancement opportunities, and all the rest that come with having that "stupid," expensive degree. Should they have waited, and put off their education until they had the financial means to pay for it without taking on debt? How would they manage that financial feat without a degree to obtain a job to make enough to support themselves as adults plus put that nest egg away? Not everyone was fortunate enough to obtain employment without a degree that made enough to finance it without debt. Should they have gone to a different, less-expensive school? Maybe, but one of the hurdles most of us have run into at this point is that society still places a significant appeal to the name of the school people come from, and not everyone has the ability to talk their way around it and sell the benefits and equality of a degree from a less-known (and less-expensive) school, or the awareness that accreditation is the balancing factor and school name means little in actual qualification. Not everyone finds alternative means of getting degrees - like building degree plans of primarily CLEP or DSST - to get the degree inexpensively (how did each of us find this forum? Judging by the previous polls here, most of us stumbled across it accidentally when researching something else and were shocked to hear about these alternative degree options, so if they did not search the specific questions we did, they were not so fortunate).

Big ticket loans are a simple fact of the American way of life. Unless we bought our houses in cash, without signing a mortgage, I find it somewhat hypocritical to berate others for taking out substantial loans to finance equally important purchases. Do each of us "need" these houses without the ability to pay 100% of the price on the day of closing? We need shelter, but we could rent or live with family until we could afford it. It isn't really a "need," then, but I'm willing to bet most of us have mortgages we pay each month. Are there alternatives to taking out sizable student loans to get an education? Certainly - most of us are following those options in varying ways - but the education community, as well as the student loan industry, seem to go to great lengths to keep these alternatives quiet. The student loan industry is a loanshark racket and needs to be addressed. Some students are stupid in the way they use loans. My husband, love him to pieces as I do, has $40,000 in student loan debt for an Associates degree (it must be the most expensive AA in the history of history) and it makes me ill every time I write out a payment for it. When he originally went into it, he insists that he researched, but available information is deceptive and contradictory depending on the source; he ended up listening to and believing his school's financial aid department and we now make a minimum of $600 / month payments (I try for $900 to try to chip it down). Was it stupid? Um...he's my husband, so I cannot answer that. Did he do it without concern of how it would be paid? No, he made enough at the time to afford what he was told the estimated payments would be...which is roughly $500/month lower than the actual. It is a dishonest system that needs to be corrected so borrowers know exactly what they are getting into.

The point is, some people make stupid decisions, often out of lack of information or naivety. Few of us, now matter how "wise" and "omnipotent" we may be now, had those same benefits when we were young, dumb kids fresh out of high school. Once they realize the stupidity of their situation, though, virtually every other industry has a way of making a correction to learn and grow from the mistake. Student loan is the exception; there are no legislation protections or alternatives. We will never be able to eradicate naivety, but we can change these systems to protect the system (ensure repayment so the government or these lenders do not get stuck with the bills) while offering protections and incentives to borrowers so they can fund an education they probably could not get through any other means but not kill their financial futures for years to come once they have that expensive piece of paper.

[clydosaurus]

Its not that I don't think people should take loans, but despite what Fannie and Sallie have been selling, it does not need to be pushed to the absolute limit. If you know you know right now you can't afford more than $1000/mo mortgage/taxes, then that is all you can afford and you'll have to work within that budget. When you have more money, upgrade! You can't let yourself be sold something that is ultimately going to hurt you. My brother, who has perfect credit, during the bubble was approved for something like $400k on a mortgage. He knew he'd never be able to make that payment, or at least not forever, especially since he's in his 40's and that's over 30 years. He ended up buying a much cheaper home that needed some work, and didn't have all the amenities that he might have wanted... and the payment is manageable, even if his already not-so-high income were to be reduced. Who doesn't want marble counter tops and a 3 car garage with pool? Just because you can, doesn't mean you should.

It's only very very recently that a degree has been required to do anything. I'm not sure how education will help you if you can't talk your way into some kind of job even without a degree. You might have a crummy job, but at least you can offset your costs. It might take longer, you might have to go to CC and then state school and you might have to live with your parents. If you don't have that particular option to live with your parents, there are still cheaper options than student housing. There are ways, aside from testing out etc, plenty of people have been able to do it and still are doing it. That's the hard way that doesn't allow much of the college experience (aka partying) that people don't want to know about. You're still going to have loans, but thats the difference between 20K and 100K.

Going to an expensive college with no direction what-so-ever as to what you'll do when you graduate or how much you'll have to pay back is asking for trouble. Especially now that it doesn't even guarantee you a job. The student loan industry is jacked. Its awful, I'm not denying that at all. Thats why it is so so important to not take out a penny more than absolutely necessary.

[mrs.b]

The point is, not everyone has the benefit of parents that teach financial responsibility, and not everyone learns of the alternative options. For those naive individuals, they listen to the people that help guide their decisions, and it is very easy to be led astray. The target market for student loans are fresh, young adults who are notoriously naive and stubborn about listening to adults that may have made life-lesson mistakes. Without all the protections of truth in lending and other consumer protection practices, they do not get the benefit of fully researching if they do not already have the financial background information to research on their own. Most of us obtained the knowledge of where and how to research significant financial decisions by making stupid mistakes as young adults. I would bet money that most of us have made stupid financial decisions at some point in our life. Hopefully, most of our decisions were not as substantial as the ones these folks made, but we still made them and had to find a way out. Most of them were probably with industries that afforded some sort of protection we had to rely upon to dig out of that financial hole, and we learned from our mistakes.

My husband's painfully large student loan was reported to have a $100/month payment attached to it, but as he approached graduation, his loan was sold to someone else who sold it to someone else, and each time it changed hands, his interest rate and terms of repayment changed. He entered into the contract thinking he would have a minimum payment of $100/mo and knowing he could cover it. But now, if he does not pay a minimum of $600/mo, they will come after him to garnish wages. It was not the deal he agreed to, but lacking protections other forms of lending have, they can and do continue to change the game. That is the point. He made a dumb decision - yes, oh yes, he did - but the hole gets deeper not out of his naivety at the time of signing, but because the system can continue to change terms.

Are any of us more intelligent because we lack loans? I think that's an arrogant statement to make. More likely, I consider most of us fortunate to have made mistakes earlier in life to learn how and where to search for alternatives and what sources are reliable or not when seeking that information, lucky to have financial situations to allow for alternative payment options to finance these important educations, and blessed to have the personal ability and personal sense to know how to talk our way into good jobs. Others' lack of fortune, luck, and blessing does not make them any more dumb than the rest of us. Others' lack or ability to talk their way into a good job, particularly in this positively crummy job market, does not make them less savvy or suave. Not all of us come from the same backgrounds, have the same skill sets and abilities, or just plain luck. These are two separate issues - inability to pay back obligations out of a lack of drive and determination, versus a severely broken system that preys on young adults who simply do not know better when it comes to alternatives that are acting as most young adults do, with a system that can change terms without notice or obvious room for dispute. Both problems could use address, but they should not be confused as the same thing.

Edited to Add: I am taking out student loans to finance my education on the front end. At the end of each term, my employer reimburses for successfully completed courses, and while it does not reimburse for the full value (just under, though), I'm rolling that reimbursed money into an investment account to grow interest while the student loan account sits interest-free so long as I am enrolled. At the end of next month when I finish my enrolled courses, I'm pulling that money out of the investment account and dropping the full payment on the student loan which should leave a balance of roughly $150 by my estimates. When testing options are factored in with that small balance, I should have earned my Bachelors degree for roughly $400 out of pocket. It took more courses rather than tests (employer does not reimburse for testing options, only courses), but the out of pocket final total was well worth the extra time it took. How much did you all pay for your undergraduate degree? I've seen reported estimates on this forum...does the difference in payment and out-of-pocket expense make me any more intelligent? Most of you seem like incredibly intelligent people, and I do not count myself as an incredibly intelligent person. I count myself fortunate to have the experience to have learned from extremely bone-headed financial decisions earlier in life, and fortunate to have an employer that reimburses as they do, to have spotted that option. Different situations, different backgrounds, different opportunities does not equate to higher or lower intelligence or foolishness.

[ryoder]

Just a general comment about people who get in over their heads in student loan debt.

A fool and his money are soon parted.

[MRHTOAD76]

Just a general comment about people who get in over their heads in student loan debt.

A fool and his money are soon parted.

Translation "Caveat emptor" like someone already stated above. So if I conned your grandparents out of their money they deserved it?
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But Mrs B I totally agree with you!

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clydosaurus

That is the point I'm making You say you know the ARM was a bad idea. Who do people get their banking advice from? The people who house their money. Yes it may be naive ,but if they tell you that you can afford a home and have payments at $500 (They don't know that doesn't include taxes,pmi,etc) And people don't know even how much it costs to actually own a home ,why wouldn't they do that. Heck they could be paying $500 rent for 3 years before the banker told them he can get them in a house for the exact payment. Kinda like when a car salesman asks what you want to spend a month and adds years to the loan to get you approved. They tell them hey the rates are falling so you will be able to get an even better rate way before the ARM is over.

If you look at the fact that majority of people in the USA know nothing about geography (outside us states) and have no math skills how do you expect them to not get taken advantage of. They don't even teach how to balance a check book anymore and the banks love it because they collect fees. search Macgraw-Hill Video overdraft charges in
2004 = 10.3 BILLION 2006 = 17.5 Billion 2009 = 38.5 BILLION yes those are all billion not million. The same banks that needed bailouts are collecting billions of un-expected profits.

"U.S. banks will collect a record $38.5 billion in overdraft fees this year, with nearly all the revenue paid by just 10% of customers"
Banks to collect $38.5B in overdraft fees in '09 - report - Aug. 10, 2009

How is that for naive, but I guess its only 10% so its not so bad.

Who doesn't want marble counter tops and a 3 car garage with pool? Just because you can, doesn't mean you should.

Umm that is the exact mindset of alot of people living in the USA..... Why wait 2 years to get a plasma when I can charge it, Why wait when I can goto rent-a-center and get it now, Talk to your doctor about Xyz drug, that is what we are raised and taught to do over and over Consume, Hey your want to fight terrorism go shopping!!

There are millions of dollars spent on how to get you to buy more than you need and consume consume consume. How to trick you into buying stuff you normally wouldn't and how to keep you living check to check to buy the newest, latest

My wife and I also put off having kids because it wasn't financial responsible but everyone we know didn't. They are scraping by ,but I'm not looking down on them for making that choice is my main point. We don't know why people do alot of the things they do ,but in reality we do know why they did what they did and alot of that has to do with how they were raised and what they were NOT taught. How do you fix it if three generations only has one person who graduated from high school? Do you think their kids are going to be like oh I'm going to be responsible.

My wife and I had to argue with 2 different loan officers because we didn't want to take out money from our home. Hey you can pay off your high-interest credit cards and get a tax write off. Alot of people did that thinking they were being responsible.

I just hate that idea well it didn't happen to me so I don't care. I'll never get laid off so I don't have to worry about it, Nobody knew they were getting laid off. Well they should have planned better... Where does it stop if you go down that road.


How many commercials still air hourly about how you should refinance now! I agree Bill Gates isn't the average person ,but that is what we are told day in and day out. YOU CAN DO IT!!! you will become sucessful you too can pull yourself up out of the slumps you just have to want it enough
You can be the next Mark Zuckerberg, or Warren Buffett! You just have to work hard and want it and you can achieve! Look at how many people live each day thinking they are on the way to the top even though 95% of them wont even come near it. Then you have the even more naive outlook well heck if you can't make it fake it. I'm not justifying people being naive I'm just saying its more to it than just a simple label of being dumb or hey theres a sucker born every minute. Or they deserve what they get if they fell for it.

All of this is eerily similiar to how they would cross-examine other types of victims... well what were you wearing, why were you at the bar alone, Why out so late? (it reeks of blaming the victim) I know you aren't saying it to that degree , I'm just saying when you start down that path aligning yourself with that crowd that is what your are supporting and doing. Blaming the victim.

[jam123]

When I make stupid personal CHOICES I deal with the aftermath and consequences. I made the decision, I took the risk and the reward would have been mine. I don't play the victim game trying to get others to feel sorry for me or pay for my problem. It's called personal responsibility.

Who should have to pay the price when someone makes a bad decision?
If you say society/taxpayers then what incentive is there for anyone to make good decisions?
How will people learn from their mistakes?

[rebel100]

When I make stupid personal CHOICES I deal with the aftermath and consequences. I made the decision, I took the risk and the reward would have been mine. I don't play the victim game trying to get others to feel sorry for me or pay for my problem. It's called personal responsibility.

Who should have to pay the price when someone makes a bad decision?
If you say society/taxpayers then what incentive is there for anyone to make good decisions?
How will people learn from their mistakes?

This is essentially my point. I have never gone out and looked for folks that make bad decisions just so I could belittle and ridicule them. In this case however, the young man put himself out there...he made a public spectacle of himself.

I'm allowed to call what he did stupid if I choose. If we fail to point out these shortcomings we can continue to expect similar behavior from others.

Have I made poor choices in my life...you bet! I learned from them (usually). I never cried over them or wrung my hands wishing for someone else to come save me.

BTW...I did misquote the article and I stand corrected that the guys Dad agreed to cosign, not pay for, a different degree. That doesn't change the point I was making that he was receiving guidance but chose a different path.

I'm sick of people that refuse to take personal responsibility for their own actions.

Franky....I really don't see your situation in the same terms. Getting sick is a far cry from taking on mountains of unmanageable debt. It's just not the same thing at all.

This thread has become too political for me...I'm politically opinionated, but try to keep that part of my life segmented from the goal of hacking higher education. I don't really want to know the political agenda of my fellow IC'ers..my best to you all...have fun...play nice. See ya in another thread! (at least I'm gonna do my best to let this one go)