All Posts Tagged With: "student loan debt"
You Should Not Walk Away From Your Student Loans
Jennifer McClelland | RSS | Sun, Oct 11 2009 | 0 Comments
Student loans are part of life for a lot of college graduates. From time to time, those who still owe thousands to the loan companies will think about what they can do. The one thing that they shouldn’t do is default on the loans.
Things can go downhill quickly for someone who decides to stop paying their student loans and it only gets worse with every month of non payment.
Within the first missed payment, the person’s credit card score will begin to suffer. The first missed payment will negatively affect a credit score if it is reported to one of the three credit companies.
Some of the other negative consequences of walking away from student loan debt:
The account will go into collections. Like any debt, even small ones, companies will always try to find the debtor to get their money from them. Collection agencies are always pushy and it will seem like they stop at nothing to get money out of you. They’re kind of like the loan sharks on TV without the physical threats.
A debtor that walks away from his or her student loan obligations can also be sued. While this practice is more often associated with private lenders versus federal loans, this is still something that happens and it often ends with the debtor’s paycheck being garnished.
A problem that occurs when someone’s credit score takes a hit that has been happening more and more frequently is, while on the hunt for a job, many employers are now checking credit scores of applicants. You can read what I had to say about credit score checking and employment at one of the previous articles I have written here:
Your Credit Score and Job Prospects: Why It Matters
Something very interesting I learned while researching this topic is that some people with very high student loan balances, typically of over $100,000, move to Europe to find employment and escape the student loan debt, as well as any negative action taken by the courts in the United States. This would work stop wage garnishments because if the debtor is paying taxes in whatever country he or she is living in, then the United States cannot take any of that money and court rulings are not valid in a different country anyway. However if he or she decided to return to the United States, there would be a huge mess that would have to be dealt with.
There might look like there is no end in sight when it comes to your student loan debt, but there are a number of reasons not to default on these kinds of loans. Student loans don’t go away when someone files for bankruptcy, they only go away if they are paid off, if the debtor becomes disabled and unable to work, or once the debtor dies.
Related posts:Student debt is on the rise
Your Credit Score and You!
What determines your credit score?
Tags: student loan debt, stop wage garnishments, private lenders
College graduation: A diploma in one hand and a mountain of debt ahead.
Jennifer McClelland | RSS | Wed, May 13 2009 | 7 Comments
College is supposed to be the next step after high school; it is supposed to be where you become a well rounded individual and educated to get out in the “real world” to earn money and afford the life that you dream of.
This is not so much the case when the economy has gone sour.
I just witnessed firsthand a college graduation; I graduated with my B.B.A. on Saturday. Looking at the future is scary, and not having a job is worse. I will be taking classes through the summer, but August will be here in no time and I will be expected to have something lined up so I can start paying my $30,000 in student loans.
Luckily, I have been fortunate enough to be able to make it through college with only student loan debt and not credit card debt. A recent report has indicated that many students are graduating college with around $7,000 in credit card debt and much more debt in student loans. So of course the rate of default on student loans has increased in the past year.
The entire situation of hundreds of thousands of people graduating is exacerbated by unemployment and employers being far more particular about whom they hire. After looking for jobs in marketing, I’ve realized that if you don’t have at least 3 years of experience in the field, you are unlikely to find something right out of college at a marketing firm (unless you graduated with highest honors it seems).
There is some hope though; in July a new federal program will go into effect that allows graduates to cap his or her monthly loan payment to 15% of his or her income. While the program was created to give some relief to those who go into lower paying industries like teaching, it will help everyone. Another benefit to this program is that in some sectors, public service loan forgiveness will go into effect after 10 years of payments; all graduates’ loans will be forgiven after 25 years of payment.
I can’t imagine still paying back loans after 25 years. I am personally hoping to have my loans paid off in 10 if all goes well. I would love to have them paid off sooner, but I have to make sure that the bills are paid first. I think this is where the problem is coming from when students graduate. Like me, they live with their significant other or spouse, or are on their own and have to make sure that they have a place to live rather than worry about student loan payments.
However, it looks like this federal program will be helpful to graduates that will have a hard time paying back their student loans because of other financial obligations.
Related posts:Student debt is on the rise
Students continue to face huge amounts of debt; and it’s increasing.
What are the lies that got you into credit card debt?
Tags: credit card debt, loan payment, loan forgiveness
Citigroup and their $2.5 Billion loss
Jennifer McClelland | RSS | Thu, Jul 24 2008 | 0 CommentsCitigroup posted a $2.5 Billion dollar loss for the second quarter. In my opinion, that?s not good at all. That would be called a disaster. However, this loss was less than expected, so it’s good? Yea, I’m confused. This was their 3rd loss in a row. All the major financial institutions are losing money though. You know, JP Morgan and Wells Fargo, haven’t posted a profit in over a year. Merrill Lynch had a larger than expected quarterly loss so Citigroup is at least doing better than these guys.
Next week we’ll see the reports from Washington Mutual (woohoo) and Wachovia. They are expected to report losses as well. Of course, you know why everyone is reporting losses? I won’t default on my credit cards because I’m working hard to build my credit.
I’d like to see how my creditors are doing. I can’t think of who they are off the top of my head, but I think I’m keeping them in business with my student loan debt. It could be worse I suppose.
Related posts:Bank of America has another loss for 3rd Quarter; Ken Lewis won’t be getting Paid this year
2009 resulted in a HUGE loss for the USPS; Expect more in 2010.
Citigroup: Sell Palm, RIM and buy Motorola
Tags: credit card, quarterly loss, citi
