Wednesday, October 12, 2011

OccupyWallStreet, Student Loans, and Nontrepreneurism

ABC News Reports: Student Loan Payments Cripple Borrowers
"We work with our customers experiencing financial difficulty to find ways to help them remain successful," said Patricia Christel of Sallie Mae. "This can involve switching to a different payment plan and a review of their financial situation to see whether they could be eligible for a temporary period of lower or no payments."
Taking a break from payments via deferment or switching to a longer payment schedule could result in paying much more in the long run in interest.
"It doesn't make any sense when people don't care what the car costs, they only care what the payment is," said Jones about many of the options borrowers have to lower their monthly payments. "But so many people are desperate they will do whatever they can do."
"Bottom line is that we want to hear from our customers and work with them to find a way for them to be successful," said Christel. "Nobody wins — not the customer, not future students who depend on student loans for access to college, not the school and not the lender — if someone defaults.""
SmartMoney discusses the aftermathFor Student Borrowers, a Hard Truth

"What many people may not realize, however, when taking out a student loan is just how different it is from other kinds of debt. Credit-card debt, for example, can be wiped out in bankruptcy. Mortgages can be discharged through foreclosure.
For borrowers with crippling student loan debt, financial failure offers no such fresh start. The loan still must be paid off, and often with new collection costs tacked on, making it much more expensive than before. On top of that, up to 25% of a person's wages can be deducted until the loan is paid back in full. (Private lenders must get court approval for wage garnishment and the amount they can take varies.)
With federal loans, the government can also keep your federal and state income tax refunds, intercept future lottery winnings and withhold part of your Social Security payments. "Defaulting can be completely devastating to a family's finances and sense of well being," says Mark Kantrowitz, publisher of FinAid.org and Fastweb.com."
[Author note: broken into 3 paragraphs for readability, emphasis added.]
Finally a quote from Peter Reilly at Forbes.com about an OccupyWallStreet example
"A typical, although on the extreme end, grievance is from someone who went $150,000 in debt to obtain a masters degree in Minority Womens  Studies.  She received an excellent education and is now extemely frustrated that no one is willing to hire her based on the important things that she has learned.  Now some even among the 99ers, who have posted, would put the blame for that squarely on her shoulders..."
Bottom Line: 
Just say "Maybe" to student loan forgiveness. Nontrepreneurism Part 2 and Nontrepreneurism Part 2a


Just say NO to Nontrepreneurism (Part 1), Warren Nontrpreneurism 
(See also: Part 3, Part 4, Part 5, and the Plugerville Example)


Just say YES to Entrepreneurism

~Xolo
P.S. Yes, there are options to avoid Student Loans entirely. See: UT Tuition and Checked Baggage, and 10 Most Affordable Colleges