Wednesday, October 29, 2008

Student Loan Dodgers

Interesting story at CNN:

CNN: Students Head Overseas to Evade Student Loans

I've occasionally discussed student loans at IYM. I posit that they are NOT the "good debt" that so many gurus espouse them to be. Rather, I suppose I'd call them "not-quite-as-bad debt." And really, I think I'm being generous.

Once student loans clog up your personal balance sheet, you're hooked. File BK, if you like, but those student loans aren't going anywhere. So what have some young'uns done to escape their student-loan responsibilities?

They've run overseas.

Like this Chris guy, who rang up $160k of student-loan debt on his way to a master's degree in music.

I am upset at myself. I could have gone to a cheaper school. But I'm most angry at the fact that for anyone who has debt that's not student loan debt, there's relief. You can get into $150,000 worth of credit card debt and you can declare bankruptcy and you can go on with your life. But with student loans, you're being punished for being a better person.

Punished for being a better person, Chris?

Not hardly.

You're being punished for making shaky decisions. You paid over-inflated rates for schooling which bestowed little future earning value, and you used taxpayer-backed funds to do it. Effect, meet cause.

Glad to see your way of dealing with YOUR crappy decisions, Chris, is to cut and run. Let someone else hold the bag. Paying all those loans back yourself? No. That'd be mean. And unfair.

Enjoy your time overseas, you "better person," you.


— Posted by Michael @ 9:07 AM


Ha! I saw that article too and thought "man I would love to live overseas for a while...but wait, I'm PAYING my student loans." I don't agree that they're neccessarily "good" debt either but I would never skip town and then blame the system.


Interestingly enough, here's why student loan debt is not discharge-able: Debtor protection from the Bankruptcy court and the power of the Bankruptcy court to relieve the debtor from obligations he or she legitimately incurred derives from powers granted to the Bankruptcy court by the United States federal government. It just so happens that the United States federal government also guarantees student loans.
So you cannot make the Federal Government forgive a debt that you owe the Federal Government by using a debt relief program like the United States Bankruptcy court against themselves?



I certainly agree with you that student loan debt is not "good debt." This is a myth perpetuated by the college industry (primarily private colleges) who are addicted to credit - yours. You obtain a quality education without going into debt if you make the right choices. As for those who leave the country, we are better off without them.


I like how it says it's a "broken system" if people feel they have to move abroad. I think it's a broken system if people can get away with moving overseas. Student loans like any other form of debt are a pain, but they also need to be paid. It's "good" debt in terms of how flexible some places would be if you just spoke to them; I'm sure your situation can be understandable if you're a recent grad struggling to pay off your loans.


Actually, you're punished even if you went to the community college to try and update your skill. That got me a few good years prior to the tech bust. Then, since I was in my 50s, it's been back to $12 or less an hour. I'm sure that was my fault too. And now, thanks to consolidation, I still have my husband's loans to pay, even though he died this month.

Student loans cannot even be discharged if you are permanently disabled. You may somehow think people deserve to have their social security garnisheed to pay off a student loan. Frankly, I believe there was a good reason why the Founding Fathers gave us bankruptcy laws.


I certainly agree with you that student loan debt is not "good debt.


Do you realize that your tax dollars go to pay full rides to people from China, Pakistan, India and other places and American citizens and permanent residents get the privilege of student loan debt?

You are WRONG! It is not a result of bad choices. When one goes to school they are often exposed to crappy advice. I asked many professors what my job prospects looked liked. I sat down one on one with the department chair. I told him I needed to fund this degree with student loans and before I decided to do it I needed to know what the placement rate was, what kinds of jobs were available etc.

He filled me with a bunch of untrue BS. I could write a book. But in short, you are naive if you think it is as simple as bad choices.

Nevermind that the school misrepresented the opportunity. Nevermind that the economy is bad. Just pay it back, right? Nevermind that people that went to school in the 40s 50s 60s 70s 80s took out very little in student loans because they had free money in the form of grants. Nevermind that because the student loan industry didn't have congress protecting them colleges kept tuition relatively low. Now, a college can charge whatever it wants to charge because they know that the student will either get a student loan or not go to school.

Uhm come student loans use to be discharged? It is a bunch of crap. Other countries provide a free college education. We can't, but we can bail out banks and CEOs...for poor choices.

Anonymous Anonymous
, at 11:26 PM, March 05, 2009 are WRONG...Sallie Mae doe not give a darn. They just keep adding interest and late fees. What fantasy land do you live in?

Anonymous Anonymous
, at 11:28 PM, March 05, 2009  

@ Anon:

I don't believe in bailing out banks, insurance companies, car manufacturers, or homeowners. I also don't believe in passing off one's bad decisions on someone else.

Nothing you wrote takes away from the "bad decisions" to which I allude. Nothing.

The responsibility is not on the college, nor the professors. It's on you.

Caveat emptor, my friend. Sounds like you learned it, but good.


Just like any bad business venture. The student should be given the opportunity to file for bankruptcy. Bankruptcy consequences may take place, but this is the help they need to get a new start.

Anonymous Anonymous
, at 10:22 AM, March 03, 2010  
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