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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)

#61

Post by ZoF »

gnaritas wrote: post #60
ZoF wrote: post #45

Earlier quoted context omitted.

> You presume too much about other people. Really, do I? I hope I never take a loan in my life, doesn't mean I can't comprehend that the vast majority of Americans with an income greater than 50K a year rely on loans for their cars/housing. A bad credit score also affects future jobs/utilities/cellphone/etc... >If 7 years is less than it'd take to pay back the loan without being broke the entire time, default is a vi…

> Explain this logic please. Pain of bad credit vs pain of paying back loan, choose lesser pain. Debt can and should be walked away from when that's the better option than paying it back.

But she still has to pay it back in the end, so why would the 7 year payment plan matter?

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

#62

Post by FireBeyond »

pdonis wrote: post #26
ars wrote: post #19

Sounds like she is defaulting, but paying. The idea of the default is to stop additional interest from being charged. Then pay down the full debt, wait 7 years and done. It's not a terrible strategy actually - although it has some serious drawbacks.

The idea of the default is to stop additional interest from being charged. But interest being charged was part of the original agreement she made. The fact that she was able to exploit a loophole in the system to avoid paying interest does not make it right.

Right, exactly. The lender is basically sucking it up and taking a loss (which will be spread to the rest of us who -do- maintain our agreements) in the hope that will allow them to recoup any of their money.

And the author is proud of herself for that.

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

#63

Post by ahomescu1 »

xtracto wrote: post #59
ahomescu1 wrote: post #27

Earlier quoted context omitted.

Public universities are funded by government, which in turn is funded by taxes. The choice here isn't between "university for a loan" versus "university for free"; the latter choice is actually "university in exchange for an extra 3-5% of taxes for the rest of your life" (I'm guessing that percentage, it might be higher or lower). You have to look at it as "do I want to pay a loan for the next 10 years" versus "do I…

>"do I want to pay 5% more of my salary for the rest of my life". There are up- and down-sides to both options. The main difference is that, if I do not have a job for 3 years, I don't get drowned on interests.

Why would you get drowned in interest? You would have to make regular payments as usual, which is something you know from the beginning, and are supposed to plan for.

Also, if this is a problem, you could try to ask for a clause against this when you sign the loan contract (if you lose your job, you stop having to make payments until you get a job again). Not sure they'd go for it, but it's worth asking for (I think many student loans come from the government anyway, they might accept this clause).

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

#64

Post by gnaritas »

ZoF wrote: post #61
gnaritas wrote: post #60

Earlier quoted context omitted.

> Explain this logic please. Pain of bad credit vs pain of paying back loan, choose lesser pain. Debt can and should be walked away from when that's the better option than paying it back.

But she still has to pay it back in the end, so why would the 7 year payment plan matter?

I'm clearly talking about defaulting on loans in general; default generally means you don't pay it back. If this isn't such a case then obviously it doesn't apply.

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

#65

Post by [deleted] »

ZoF wrote: post #48
gnaritas wrote: post #17

Earlier quoted context omitted.

> 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.

This thread is about Federal Student Loans.

[deleted]

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

#66

Post by taeric »

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…

This is just dumb. One of the great freedoms of our country is that we can default on debt. Any moral grandstanding that tries to prevent people from doing so is shortsighted and counter productive.

Consider, where was the responsibility of the lending office that gave out the loan? Do you honestly think they should have guaranteed returns on all loans? That there should not be some expectation that some will go belly up?

Don't get me wrong, I don't encourage people to just look for a chance to default. But to try and claim it is a lack of personal responsibility is an attitude that causes far more problems than a healthy number of people defaulting.

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

#67

Post by calciphus »

siegecraft wrote: post #51
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…

Doing something merely because of a sense of "personal responsibility" is irrational, especially if it makes more financial sense to do otherwise. Suggestions that the author go back in time to make different decisions are also ridiculous.

This is a toxic sense of "If you can get away with it, you should" that damages society as a whole.

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

#68

Post by spacehome »

gamblor956 wrote: post #50
spacehome wrote: post #49

Earlier quoted context omitted.

Debt load isn't the same as the cost of school.

No, but it's the same as the cost to the student, which is the point of reforming the student loan system.

No it's not, because you're not counting familial help or jobs on the side or savings. Also, you didn't address any of my other points. This program sounds great because they're actually charging less. They'll need to increase the terms of repayment by at least 50%.
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