WSJ -- 40 percent of Federal student loans behind in payments

I think I have 16 years to go before I'll have my remaining balance forgiven, but have to pay taxes on the remainder as income.

I'm hoping that, by that time, even that requirement is dispensed with.

 

If it weren't for income-based repayment, there's no way I could pay my loans and my loans at graduation were about half of the typical law school graduate from my class.

 

I think I owe $295K-plus right now.

LOL.

 

The Federal government may be reacting to this by suing the large career-college chains such as Everest, where a majority of the students receive federal student loans. In many cases, the colleges promise students the sun, moon and the stars as far as jobs, but when they student finishes his or her course of study, the schools are doing little in the way of job placement and counseling, and the jobs simply aren't there. An attorney general in San Francisco is investigating lawsuits on the basis of the schools making false advertisements, which induce prospective students to enroll, the get federal loans. When they can't get work, they naturally default or fall behind on the loans. I wonder how much of a chunk of the overall student loan amount owed is due to the for-profit college scam.

 

Didn't work for the law school graduates, though.

 

Holy shit.

I guess it makes sense when I add the general tuition numbers, but ... Holy shit.

 

Part of the problem with the Student Loan program are the current rules governing the loans. Grads cannot pay extra toward principal if they want that option. Went back to trade school a few years ago attempting to move away from journalism and took out a federal student loan to do it. They set you up with a 10-year repayment plan so the monthly payments are extremely low. But, there's this from the "how payments are applied" section of my student loan servicer's FAQ..
Did you know there are rules in your student loan agreement we're required to follow when we apply payments to interest, late fees (if any), and your unpaid balance? This means it's not possible for you to direct a payment to be applied entirely to the unpaid balance of a loan. For all loans other than federal loans with income-driven repayment (IDR) plans, payments must be applied first to late fees, if any, then interest, and finally the unpaid balance. For federal loans with an IDR plan, payments must be applied first to interest, then late fees, and finally the unpaid balance.

In other words, there's no way to dedicate 100% of an extra payment to principal like you can do with any other type of loan (auto, mortgage, home equity, etc.). In my case, with a typical monthly payment, 66% goes to principal, 34% to interest. If I want to make an extra payment in a month to try getting ahead, roughly 20% of that will go to interest. It's simply a rigged system to allow the government to compile interest on higher principal balances instead of letting grads pay down the debt quicker to get out of debt quicker.

 

I have two houses, nearly $300K in student loans and, somehow, an 800-plus credit score.

#Winning

 

Yeah, a lot of my friends are in that boat with you. I'm just under $100K, but working a public interest job means I ain't got shit to pay it off with.

 

I'm pretty thankful I went the community college/cheap public school route. And even while I did, I worked to minimize the loans. I have a tiny fraction of what some of you guys have and even that amount annoys the piss out of me. Heck, if I could have had that $20k that parents apparently just have lying around for their kids, I could have done it without loans at all.

I'm going back in the spring and I wouldn't do it if I had to do loans. I can pay it all out of pocket through scrounging and again cheap public options.

 

Doesn't bother me in the least bit. It's a tax on my earnings, which appeared to be capped at about $38K in my prior career.