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Money

The www.FedPrimeRate.com Personal Finance Blog and Magazine

Sunday, May 22, 2005

Just When I Thought My Student Loan Debt Horror Story Was Bad...

Student Loan Debt Horror Story
A couple, trying to do their best to put their child through college, co-signed for a $40,000 student loan. Now that financial hard times have forced them into bankruptcy, they find themselves begging the collection agency that is trying to collect on the student loan debt to give them easier payment terms. The collection agency's response: Can't help you! Now they owe an additional $30,000 in interest and fees. Talk about being kicked while you're down. 

Most debt can't stick with you forever, but a change in United States Federal Law back in 1998 made it impossible for student loan debt to be erased in bankruptcy court. So if you need another reason why you should consolidate your student loan(s) now while the interest rates are still low, here it is: if you end up in financial dire straits and not able to make payments on your student loan(s), the collection agencies can come after you forever. They can, and they will too.


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3 Comments:

Anonymous DJScuba said...

I'm currently a college student and have tried to stay away from student loans by going to a state college while working part time. Right now I'm in my 3rd year of college debt free. As for this couple, they must have sent their child to a very prestigious or out of state school. Not a very good decision if your financially struggling.

Sunday, May 22, 2005 3:34:00 AM  
Anonymous Abraham said...

Pay it. If it is borrowed then pay it back.

Thursday, May 26, 2005 7:49:00 AM  
Anonymous Zack said...

I think that sometimes going to community college for two years first and then transfering to a 4 year college is a good idea and can help you save alot of money.

Monday, November 28, 2005 10:53:00 AM  

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