Student loans: Another cautionary tale

[chuckster, ADN, BSN, RN, EMT-B]

September 8, 2012

Debt Collectors Cashing In on Student Loan Roundup

By ANDREW MARTIN

At a protest last year at New York University, students called attention to their mounting debt by wearing T-shirts with the amount they owed scribbled across the front-$90,000, $75,000, $20,000.

On the sidelines was a business consultant for the debt collection industry with a different take.

"I couldn't believe the accumulated wealth they represent-for our industry," the consultant, Jerry Ashton, wrote in a column for a trade publication, InsideARM.com. "It was lip-smacking."

Though Mr. Ashton says his column was meant to be ironic, it nonetheless highlighted undeniable truths: many borrowers are struggling to pay off their student loans, and the debt collection industry is cashing in. . . .

. . . There is no statute of limitations on collecting federally guaranteed student loans, unlike credit cards and mortgages, and Congress has made it difficult for borrowers to wipe out the debt through bankruptcy. Only a small fraction of defaulters even tries. . . "You are going to pay it, or you are going to die with it," said John Ulzheimer, president of consumer education at SmartCredit.com, a credit monitoring service.

Link to complete article may be found here: http://www.nytimes.com/2012/09/09/business/once-a-student-now-dogged-by-collection-agencies.html?pagewanted=3&_r=1&hpw

[Meriwhen, ASN, BSN, MSN, RN]

Did it once for the undergraduate degree...took me 11 years to pay off and I vowed never to do it again. The ADN is and BSN will be paid in full before I graduate. I've already started a savings fund for graduate school--ideally I'd like to have all that saved up before I start, but that probably won't happen...so if it means I have to work during graduate school and/or go to school part-time, I'll do that before I take a loan.

Students needs to be aware of what they are getting into when they take out a loan. They should also not be borrowing above their means, especially when the job market right now is terrible for everyone, let alone new grads. No one's putting a gun to any student's head forcing them to take 50-100k out in loans. If they're not willing AND prepared to take on that responsibility, perhaps that pricey private nursing program is not really the best way to go. Maybe a less-costly program or going part-time while working is the answer now for avoiding debt problems.