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I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

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Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#11

Post by TrainedMonkey »

stephen_g wrote: post #3

Stories like this make me very glad of the system we have in Australia. You can choose to have your Univertity fees just automatically paid by an interest free loan from the government (it's like a five minute online form to sign up for), and then you just pay back 4% of the loan on each tax return if your salary is over $51,000 (you can choose to make voluntary payments over the compulsory rate, or if you make less…

Compared to US sure. Compared to some countries that pay you to go to secondary school not so much.

Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#12

Post by digisign »

ZoF wrote: post #5

Eh, this article doesn't really make sense.... Basically the author defaulted on their student loan instead of deferring and makes an argument as to why it was a good decision for them. The reason I say it doesn't make much sense is that, imo, it really glosses over just how big a deal defaulting on a loan is. While the author is talking about themself, a naive individual might get the idea that this is the right cho…

7 years when you're ~22, who cares?

The point, which was a bit buried, was that by defaulting and having her wages garnished, resulted in much better progress in paying the debt off ... because there is no interest, and probably because of inflation as well.

I'm not sure that's accurate, but it's what the piece implies.

Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#13

Post by ZoF »

digisign wrote: post #12
ZoF wrote: post #5

Eh, this article doesn't really make sense.... Basically the author defaulted on their student loan instead of deferring and makes an argument as to why it was a good decision for them. The reason I say it doesn't make much sense is that, imo, it really glosses over just how big a deal defaulting on a loan is. While the author is talking about themself, a naive individual might get the idea that this is the right cho…

7 years when you're ~22, who cares? The point, which was a bit buried, was that by defaulting and having her wages garnished, resulted in much better progress in paying the debt off ... because there is no interest, and probably because of inflation as well. I'm not sure that's accurate, but it's what the piece implies.

Yeah, I grokked the point, and I strongly disagree with the conclusion.

For anyone with a graduate degree that's competent in their field the chances of going 4+years jobless is pretty low. And I would assert that if you get a (well-paying)job earlier than 4 years out of college its worth it to not default on your loans.

Why? By the end of the second year of a salaried job I would be highly surprised if that shitty credit score hasn't fucked up your life in at least one major way.

It's really about how much you think you're worth. If you don't think you'll need a loan in the next 7 years then save yourself some money I guess?? Don't forget if you get ANY job at all in the meantime, because they can just garnish your wages if they do.

It seems to be implied that life with bad credit isn't so bad(and it isn't), but we live in a material world. People want to buy shit, often-times shit that's more expensive then they can currently afford, it's why loans exist. I just think anyone acting on this advice without REALLY thinking about it, will regret it more often than not.

Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#14

Post by noisy_boy »

I'm Indian and sometimes pieces like this are a very strong reminder of how bad the student loan situation is in US. I went to a central university (i.e. funded by the central/federal government of India) and basically paid less than INR 1000 per year in tution fees and what not (I was a day scholar so no hostel expenses but they were low as well). For three years of full time university education, that is less than USD 50. I don't have a foreign university degree to compare quality of education with but I certainly got FAR better education than I paid for.

Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#15

Post by gnaritas »

ZoF wrote: post #5

Eh, this article doesn't really make sense.... Basically the author defaulted on their student loan instead of deferring and makes an argument as to why it was a good decision for them. The reason I say it doesn't make much sense is that, imo, it really glosses over just how big a deal defaulting on a loan is. While the author is talking about themself, a naive individual might get the idea that this is the right cho…

If 7 years is less than it'd take to pay back the loan without being broke the entire time, default is a viable option.

> It seems to be implied that life with bad credit isn't so bad(and it isn't), but we live in a material world.

Not everyone is material.

> People want to buy shit, often-times shit that's more expensive then they can currently afford, it's why loans exist.

Many don't, many like to live within their means and shun such material excess or attempts to keep up with the Jone's. Many laugh at the ignorance of wasting money on shiny rocks and expensive habits and life events. You presume too much about other people.

Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#16

Post by ZoF »

amorphid wrote: post #7
pkulak wrote: post #4

You default and they stop adding any money to your debt? That doesn't sound right. If I tried that I'm sure they'd be adding some 30% late fee every month.

"Deadbeat" American student loan debtor here. During the economic meltdown, I defaulted on my private student loans in 2009. The defaulted loans were picked up by two different debt collectors. One of them, Sunrise Credit Services, is charging me interest as I pay down the loans. The other debt collector, Williams and Fudge, charges me no interest.

Have you tried rehabilitating your loan?

Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#17

Post by gnaritas »

ZoF wrote: post #6
pkulak wrote: post #4

You default and they stop adding any money to your debt? That doesn't sound right. If I tried that I'm sure they'd be adding some 30% late fee every month.

Are you from the USA? This is basically a form of strategic default. Because the debtor hasn't renegotiated their loan(deferred) and has stopped paying for their loan, they defaulted(breached contract, failed to meet obligations, w/e). Because there's no contract, they don't charge interest, but they do hit your credit score and go after the money other ways. In the USA your credit score determines your eligibility f…

> In addition defaulting on a loan allows the debtor to garnish wages, tax refunds, etc...

That very much depends on the state and kind of loan; many states do not allow this for mortgages.

Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#18

Post by Xcelerate »

I agree completely with her grandmother:

> Grandmother: “Why did you borrow money you could not repay?”

> Her: “I thought I could repay it until the bailouts happened.”

> Grandmother: “That is no excuse. You need to repay them.”

For some reason, a lot of people my age lack any sense of personal responsibility. It's not the author's fault she couldn't repay her loans. It's everyone else's. Lately I hear more and more people blame all of their problems on everyone but themselves and it's starting to get really annoying. My (recent) ex-girlfriend was (is?) failing her history class and blamed it on the professor for not making the attendance policy more prominent in the syllabus. It wasn't her fault she was skipping class and getting points deducted.

You know what the author could have done? Not gone to college. Get a vocational position and save up until you have enough to go if that's really what you want. Apply for scholarships. There's plenty of options.

Re: I Defaulted On My Student Loans (And It Was The Best Decision Of My Life)

#20

Post by ars »

Xcelerate wrote: post #18

I agree completely with her grandmother: > Grandmother: “Why did you borrow money you could not repay?” > Her: “I thought I could repay it until the bailouts happened.” > Grandmother: “That is no excuse. You need to repay them.” For some reason, a lot of people my age lack any sense of personal responsibility. It's not the author's fault she couldn't repay her loans. It's everyone else's. Lately I hear more and more…

You missed her point completely.

She IS paying the debt. By defaulting she is stopping the interest from accruing, but she still pays the principal.

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