Evil school loan lenders versus the schools with all the money
On a pretty regular basis during the last few years, we’ve seen stories concerning “outrageous” student loan rates and “unbearably-high” student loan principal amounts. The target is almost always the evil private student loan industrial complex and the employers who just won’t pay these kids enough money to pay off their loans. Should they direct their disgust elsewhere?
From the Daily Mail, we learn of Steve Mason’s plight. Tragically, his 27-year-old daughter and mother of three died in 2009 of liver failure after piling up $100,000 in student loans. Five years later, the amount owed is now $200,000. Mason co-signed for the loans. Throughout the article, it’s the private student loan companies who are the bad guys.
A Californian pastor is being mercilessly hounded for $200,000 in student loans he was saddled with when his 27-year-old daughter Lisa died suddenly of liver failure.
Crippled by the $2,000 a month in repayments and unable legally to declare bankruptcy to rid himself of the huge debt, Steve Mason, 59, and his wife Darnelle have reached their wits end.
Each time they have appealed to the lenders to beg for help, the couple have been told that the only solution is to repay the mammoth loans – some of which have interest rates of 12 percent – in full.
Of course, that statement is not true, as at least one lender provided Mason with some relief. From the same article … 15 paragraphs later.
One of the lenders, Navient Crop, did reduce Steve’s interest rate to 0% on three of four loans and lowered the amount owed from $35,000 to $27,000.
As I mentioned, these stories are not unusual. CNN lists more and the situation absolutely sucks for the families. It really does.
But should the media and the families be looking to the lenders or the schools for relief? Really now, think about this. The lenders don’t have the money or the resources to just forgive the loan. The lenders gave the tuition owed – in full – immediately to the school who paid the teachers and staff.
Why not petition the school, professors and staff for relief? We know the answer to that don’t we?
You can argue interest rates for student loans are too high all you want, but when you sign for the loan it’s quite clear in the documentation what the interest rate will be, when you will need to start paying off the debt, how many payments there will be and how long it will take to pay off the debt. It’s right there, in black and white.
Of course, the article notes how great government student loans are compared to the evil private loans …
Had they been federal student loans, then Steve [Mason] could have appealed to have them wiped or at the very least received a sensible and manageable payment plan.
But Mason was able to appeal, and it’s clear at least one of the loan holders adjusted the interest rate and payment amounts. It’s right there in the article!
That leaves the ability for the feds to have the loans “wiped.” A very nice payoff for the schools! You see, the government can just wipe out student loans and make the taxpayers and future generations foot the bill. It’s only a few dollars per person … fuhgeddaboudit.
Considering the amounts, do we now need “catastrophic” or “education interruption” insurance? /sarc
How about a money-back guarantee from the schools, universities and other educational entities? Or would that nibble into their billions of dollars of tax-sheltered endowments, prime real estate or huge profits?
Nooooo, couldn’t have that happen.
Excuse me for asking, but did the person getting the loan take courses at an “institution”? If he/she did, what is the rationale for “petitioning the school, professors and staff for relief”? The lenders took on the risk of a default as well as reward for repayment. Isn’t that the way the system is set up to work?
And her father took the risk as a co-signer for the loan. In these situations, why is it always the lender being marked as the evil entity? Sure, they took the risk and make interest on their investment, and in a black and white world dad has to pay up … period.
But since the media is looking for relief for this family, why limit the demands to the lender exclusively? If they are suggesting changing the rules of the terms of the loan, everything – including the school’s cut – should be on the table.
Where is personal responsibility, did any of these people read the loan? It is not necessary to go to an expensive college. My oldest went to Central CT. He lived at home, by his choice, he had an excellent education and internships as a student. When he graduated he had a great resume from producing videos to train prison guards for the state of CT. He was hired for an excellent job in his major, communications, what a concept? He is still with the company 20 yrs later as a manager. We paid by me getting my first full-time job and paid off the manageable loan. Our youngest was able to go to a more expensive college and by that rime could afford with no loan. He graduated first in his business college. He was hired by my husband, however he deserved it. Also, I’ll say it, not everyone needs to go to college. There are no tradesman in my area. Small businesses will pay a premium for diesal mechanics, masons, landscapers, die cutters, etc. Lecture over