Saturday, September 17, 2011

September 17

I was filling out a request for a forebearance from my student loans yesterday.  I was thinking about how this is getting a little demeaning sitting here begging the government (mine are consolidated) not give me a little more time to get my finances together before I start paying them.  I read about a petition online concerning student loan forgiveness.  Groups are pushing the government to forgive all student loans.  Ahh, I thought, that would be nice, wouldn't it?  To be free of student loans?

Sadly, student loan forgiveness can't, and frankly shouldn't, happen. The money you are loaned does not magically appear, it is the result of investments. You cancel the loan and someone along the way loses that money, and who should be left holding the bag?

And this isn't completely heartless either. What do you think will happen to future student loans if they are forgiven? Who will invest in student loans? No company would touch them.

I don't have the numbers in front of me, but that pretty much leaves the government to take care of everything. If the recent debt problems are any indication, I'm not terribly confident they can or have any inclination to take over the student loan business.

I would benefit greatly from student loan forgiveness. Law school isn't cheap, and I haven't been very successful finding a job in my field. They do need to work on how they issue student loans however. Giving people realistic expectations of their earnings potential should be mandatory. If you are studying art history, you should know that the chances that you actually use the degree you are paying for are slim.

I heard somewhere that the student loan bubble is a lot like the housing bubble and when it pops, its going to be bad. Let's hope they figure out something to do about this, because I wouldn't want to see that happen.

What about you?  Do you have student loans?  How's it looking in paying them back?  Think we should forgive them?

20 comments:

  1. I'm getting a student loan and a maintenance grant coming in very soon and I agree with you. We should be forced to pay them back, it's the logical way to work a government. Saying that I'd love for them to expunge my debts and tell me it's all free, who wouldn't?!?!

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  2. I had a small student loan from a technical college which I have paid off in full. Other than that, I am debt free! It's all about community college if you don't want a huge abount of student loans.

    +following

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  3. Student loan Bubble?

    Oh maaaan.

    Welcome to the reality of Chile, my friend! Please, have a seat and a mortage.

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  4. I've done everything possible to avoid student loans, and it's been hard, but I think it will be worth in long run. good luck.

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  5. I agree with you on student loans - they may be hard for students to pay back - but if the government gives amnesty to those receiving them, it would ruin the market.

    I wish the best of luck in paying them off! It's best to get rid of debt ASAP in my opinion.

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  6. I'm more than $120,000 in dept with student loans... tell me too :)

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  7. No student loans, just grants.
    Good luck with your studies!

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  8. during the sumer befoe first year i had a job making 24 bucks an hour full time. paid for my entire first year myself

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  9. YOure definatly right here, and it will pop, and it's not going to be pretty:/

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  10. I plan on applying for as many scholarships as I can so that if I do take out a loan it won't be for much money.

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  11. i hate loans, having a bit of trouble with them as well

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  12. Nope, we dont have student loans in Argentina (at least in public schools), tenemos muchos compatriotas latinoamericanos estudiando acá!

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  13. Well, Student loans forgiveness looks fun in one way, but on the other side it would cause terrible things as you said. I think that if you're going to study something it better be something you like and you'd apply in a job

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  14. I've just got student loans now and it works fine, but I will have to pay them back.

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  15. been lucky so far that i havent needed a student loan

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  16. "And this isn't completely heartless either. What do you think will happen to future student loans if they are forgiven? Who will invest in student loans? No company would touch them"

    very true

    i was at the junior college down here on financial aid (not a loan) getting $2500 a semester + my classes paid for which was nice

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