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iLove's avatar

What do you think about the Government helping out those of us with student loan debt?

Asked by iLove (2339 points ) December 29th, 2009

It seems as though the interest on my student loan will never end! I keep asking, why isn’t there some sort of bailout or subsidy or help for those of us who have to pay off thousands of dollars in student loans, even when you can’t afford to?

I can’t claim student loans on a bankruptcy, nor can I seem to negotiate a deal like some of the credit counseling programs that are out there.

What gives?

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12 Answers

Sampson's avatar

Because if they did, they wouldn’t be helping themselves.

ItalianPrincess1217's avatar

This I why I didn’t go to college. My best friend is going through a hell of a time right now due to her student loans. She owes over $13,000 for attending only one year of school. Because of her unpaid debt she has horrible credit.

funkdaddy's avatar

Funds used for education already get all sorts of benefits and subsidies. There are also a lot of free or very cheap educational resources available through the government and other means.

With those facts and the fact that the money from “the government” actually comes from individual taxpayers it seems like asking everyone to pay off student loans would be a lot like asking everyone to chip in on your Lexus, when the bus route was available.

My wife and I will be paying on her student loans for the next 10–15 years, but through those loans she got an education and a career that would have been unattainable otherwise. I consider the opportunity a huge gift and don’t think others should pay further for something that benefits us far more than them.

I’m not against helping folks out, but at some point you have to pay your own way. You chose the school, the program, the path, and essentially what the education would cost. The government and your fellow taxpayers had nothing to do with the choices and didn’t gain from the opportunities presented, so rightfully shouldn’t be on the the hook for the costs.

LKidKyle1985's avatar

@ItalianPrincess1217 you know normally you don’t have to pay back student loans until like a year ½ after you graduated. So I dunno why your friend has unpaid student loans, unless she dropped out and then didn’t feel like paying on them. I have like 40k out after graduating and I have better credit than any of my other friends my age.

Anyways I agree, there are other routes to pay for college through the government. I wish it was a little more available. Not everyone can join the military, and I know some other positions at different departments help pay back loans, but there aren’t enough of these jobs for everyone. But do I think the government should help pay back student loans? I dunno. I kinda wish college was free/dirt cheap in the states like it is in France or Sweden. Or that my highschool guidance conselor would have informed me of these free education systems before I invested 3½ years in college in the states. But, bailing out students sure would be nicer than bailing out the banks who are crooked theives anyways. But I don’t think it makes sense.

ItalianPrincess1217's avatar

@LKidKyle1985 She did drop out. And it wasn’t that she didn’t want to pay on them. They didn’t offer her a payment plan. They sent her the bill for the full amount due to her dropping out. She obviously didn’t have $13,000 so it went to collections.

LKidKyle1985's avatar

@ItalianPrincess1217 I’m not sure if that was a loan then because if it was, the whole point of taking out a loan is to pay it back over a period of time with interest. thats how the bank makes money. They would never drop the entire thing on you like that because if you had 13,000 dollars to pay back the loan all at once you wouldn’t need the loan in the first place.

ItalianPrincess1217's avatar

@LKidKyle It was most certainly a loan. There were stipulations and she didn’t follow through. So instead of giving her the full 4 years to pay on it, they wanted it in full.

Leanne1986's avatar

Here in the UK you don’t have to start paying off a student loan until you are earning a certain amount of money per year (I doon’t know how much that is though).

iLove's avatar

@funkdaddy – I am not asking for a free ride, what I am wondering is why it is nearly impossible to get help repaying these loans, even after loss of a job. The interest just keeps piling up and that is where I see the problem lies. There are simply no programs that help those of us who have tight financial situations to lower the interest on Student Loan Debt.

So you’re telling me it’s perfectly acceptable for the Gov’t to give people hundreds of thousands of dollars off of their homes they bought that some of them knew they couldn’t afford, but asking for relief on excessive interest on student loans is a stretch?

galileogirl's avatar

@iLove There was a time when the govt DID help with student loan debt by lending directly to students @ 3% and even allowed some forgiveness of debt if the student worked in certain jobs in underserved areas. What happened? A significant number of graduates, many of them in high paying careers, punked out on their loans.

Losing money, the govt gave up their risk and turned it over to the for profit financial sector. These “goodfellas” not only tripled the interest rates, they got their their Congressional buddies to make the “no bankrupcy” poison pill provision. Meanwhile many of your parents and grandparents were chanting “Read my lips, no new taxes” witout taking into accout that taxes support college educations

jca's avatar

@iLove : when the govt helped out people with their mortgages, they were saving thousands of people from homelessness, and saving the banks from having lots of bankruptcies and foreclosures on their hands, so that in turn helped the economy. helping pay student loans helps the student but does not help the general population.

funkdaddy's avatar

@iLove – I’m definitely not saying other bailouts are perfectly acceptable. I don’t think even the biggest supporters find them perfectly acceptable. They’re an extreme solution to a series of extreme problems that were affecting billions of people around the world and millions of people in US.

Also, I’m not saying anything about your situation personally, I don’t know enough about you or what you’ve done to make any educated statements there. I apologize if my original answer seemed to be directed at you personally.

What I am saying
– The interest rates on student loans are some of the lowest unsecured rates simply because they don’t have to worry about bankruptcy and because of the other guarantees involved. Without those guarantees the loans would probably be at the same rates as something like a credit card and that doesn’t seem preferable to me
– The amount you pay each year in student loan interest reduces your income for tax purposes, so that money isn’t taxed directly. This is an example of the government making a special case for student loans
– The government makes huge sums of money available to students for grants and loans already, some are paid back and some aren’t, but they’re almost always more desirable than paying out of pocket, or with private loans
– If there was a better loan available, you could simply get that loan, pay off student debt, and go from there. The fact is that student loans are really a pretty good deal overall, so the “better deal” is hard to find

So overall, student loans are already a special case, and generally a very good deal, because of all the help the government and taxpayers provide on them.

On a more positive note… Have you tried getting in touch with your school’s financial aid department? I know you’re not there anymore, but they might have some advice or information that the lenders and credit counselors may not want to provide for whatever reason. The counselors are usually pretty familiar with the current options from what I’ve seen and were willing to talk to me before I was ever a student, I would imagine they’d extend you the same courtesy afterward.

I also know some folks that have gone back to school to either work on another degree, or just get back in to the networking aspects of college now that they know a bit more about the job market. I believe this may give them a break from student loans as well. Would that be worth exploring?

Good luck with it all and I hope you find something that works.

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