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Old 02-15-2010, 05:49 PM   #21
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... In fact, the lawyers design the fine print so you don't bother to read it. When you got a mortage, did you read every single page of the bank documents?
Interesting side note, most lawyers I know do not read the fine print (I'm a paralegal) but unlike most people I do. Its quite entertaining/horrifying what you find in the fine print of software. My mortgage docs fortunately were much more straight forward.
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Old 02-15-2010, 06:06 PM   #22
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Interesting side note, most lawyers I know do not read the fine print (I'm a paralegal) but unlike most people I do. Its quite entertaining/horrifying what you find in the fine print of software. My mortgage docs fortunately were much more straight forward.
This lawyer reads the fine print on important things. Like six figure mortgages and six figure student loans. And credit cards.

Not so much on unimportant stuff like software EULA's.
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Old 02-15-2010, 06:09 PM   #23
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She should join the Military and get her loans paid off. Get some good experience too, probably prepare her for an emergency room. Or, work for the VA, get paid $100-150K and have them pay off the loans.

Hey, it's a way out. If she doesn't have family she won't need to worry about deployments.
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Old 02-15-2010, 06:12 PM   #24
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I was also thinking there should be somewhere she can work for a few years to get the loans forgiven.
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Old 02-15-2010, 06:14 PM   #25
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"The debt load keeps her up at night. Her damaged credit has prevented her from buying a home or a new car. She says she and her boyfriend of three years have put off marriage and having children because of the debt."
Sounds like credit is back to normal. Defaulting on debt payments makes obtaining more debt difficult or impossible. Good. The system is fixed.

Dr's around here can get govt jobs with relatively little experience making near six figures. That should greatly simplify one's difficulties with servicing a $1000/month student loan.

Our family's monthly student loan debt is a little over $200,000 and the monthly payment is over $500. Where's my bailout??!! Life's not fair.
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Old 02-15-2010, 08:41 PM   #26
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I was also thinking there should be somewhere she can work for a few years to get the loans forgiven.
She need to put her education to work and PAY her debts.. Why should she expect this particular debt to be FORGIVEN?

If she can find a job with the VA , great- take her 6-figure starting salary and set up a payment plan to pay this debt- the idea that she can offload her loan obligations on the US taxpayers simply because she takes a highly-compensated job working for us is ludicrous...

What am I missing here? There are no mitigating circumstances. She willingly took the money, bought herself an education that will pay her a 6-figure starting salary, and now doesn't want to honor her end of the contract. Plain and simple. It doesn't matter whether she spent the money on classes or crack cocaine, she took loan after loan knowing there would a time when those loans would come due. It's called adulthood, and being a responsible memebr of society. She is neither, IMO

Agree with the notion that if she is this irresponsiible in her personal life that she will be equally irresponsible in her professional life.
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Old 02-15-2010, 09:31 PM   #27
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I only said that about her loan possibly being forgiven because there are a lot of places where teachers and I believe some doctors can work for three years (inner cities, etc., for underserved populations) that some education loans will be forgiven. It is not a new concept, and it involves actually working the loan off. Sorry to have been misunderstood.

For example, here are a whole slew of places this doctor could look at:

http://services.aamc.org/fed_loan_pu...TOKEN=35375450
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Old 02-16-2010, 07:56 AM   #28
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When you got a mortage, did you read every single page of the bank documents?
Actually, yes. I learned the hard way why that's important. The lesson was relatively cheap, $750 in 1979 but at the time it was a hefty chunk of cash.

One of DW's cousins is a surgeon who had his loans paid off by taking a position for three years in a low-income area of TN. He likes the area so much he decided to stay. So there is a way out.
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Old 02-16-2010, 08:02 AM   #29
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My loans were in the low 6 figures but that was in 1978. Rates on most were low, but one loan floated with prime. That is not something you really wanted to do in the early 1980s.

I had the last of them paid back in 1989. Eleven years, reflex installment every month. I am grateful and never even considered not paying them.

However, when I stop and think just how far behind the 8-ball that put me I do not think I would do it that way again. Maybe a salaried job to avoid practice startup loans, maybe national health service corps, or the like. I also chose a lower income specialty, but that I would repeat, having enjoyed 95% of my career.

The month after the last repayment, we started saving in a serious way. Knick of time.
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Old 02-16-2010, 08:37 AM   #30
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The only way to get a student loan discharged in bankruptcy is to prove in a lawsuit brought within the bankruptcy that to pay the loan you would suffer undue hardship. It doesn't sound like she is there. And these cases are very difficult to win in most jurisdictions. She may have been better off if she had tried this before renegotiating the loan. And she might have considered moving to a state where the bankruptcy court is a bit more liberal on the issue.

The big deal for her is the collection costs and accrued interest. Sometimes you can get some of those future collection costs that have been assessed waived if you pay according to their terms for a period of time and the loan goes out of collection. I think it would make sense for her to try to get a lawyer and try to work on the collection cost issue. Plus, although huge amounts of collection costs may be collectible it is worthwhile in her instance to have someone scrutinize those costs to insure only proper charges were made in her case.

If she works hard and saves her money she might be able to settle for a lump sum which excludes those projected collection costs and even could involve a discount of principal and interest, though usually the discount will be small (maybe 10% off both, or up to 50% off of accrued interest if principal is paid in full).

There is no statute of limitations on collecting student loans. They can garnish wages without a judgment. They will take your tax refunds. And the can take your social security.
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Old 02-16-2010, 08:41 AM   #31
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Give the doctor a break. 99.999% of people do not read the fine print;
I think you will find many people do read the fine print. I do. If I am legally obligated to do something, I do want to know what it is.

No matter what you think of "fine print" however the part where they tell you that you have to pay back what you borrow is not in fine print. It's a pretty basic idea that comes with a loan.

And since I expect my doctor to have a vast amount of medical knowledge, only some of which might be relevant to my case, I do expect her to read the fine print that it takes to acquire that knowledge. Anyone can tell me "That's not too serious. Come back in a week if it get's any worse." but that's only valuable to me if the person really does have fairly extensive knowledge of what might be happening. Just skimming over the material to get the gist that many conditions are not too serious is not sufficient.
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Old 02-16-2010, 08:47 AM   #32
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Yes, but I think people have no understanding of how high collection costs on a loan can go and how huge the balance can get if you fall behind. I also am not sure that the fine print tells you the broad collection powers that the government has. After all, it retroactively removed the statute of limitations for collecting student loans.
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Old 02-16-2010, 11:38 AM   #33
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I find it a glaring omission that the article didn't say how much she is making per year now.

I'm pretty sure that I make less than most doctors (even general practitioners), and I don't think $1000/month would be that hard to swing.

It sounds like she has no financial sense at all.
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Old 02-16-2010, 12:08 PM   #34
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I find it a glaring omission that the article didn't say how much she is making per year now.

I'm pretty sure that I make less than most doctors (even general practitioners), and I don't think $1000/month would be that hard to swing.

It sounds like she has no financial sense at all.
Agreed. Its one of the things I hate about "woe is me I have student loans" articles that keep cropping up. Student loans allowed me to graduate with a college degree.
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Old 02-16-2010, 01:00 PM   #35
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Student loans allowed me to graduate with a college degree.
Me, too. Unfortunately, I was stupid enough to think I had an obligation to pay mine back, instead of turning them into a self-proclaimed entitlement program...
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Old 02-19-2010, 09:54 AM   #36
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I would bet she grossly over-estimated how much she would make as a "doctor" not understanding she choose the lowest paying option for the profession. Probably grew up in a low income household who did not know enough to tell her that making a $120,000 per year wasn't going to make her instantly wealthy.

You can make that level of income with a bachelor degree as a middle manager in mega-corp america.
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Old 02-19-2010, 10:28 AM   #37
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I was very appreciative of the student loans that helped me get my BS in civil/structural engineering. The loans were paid back and even paid off early.

This doctor sounds like she is going to have a tough time getting her debt under control. Time to get serious and live significantly below her income for a long time. Sounds like she ignored the mounting debt, maybe hoping it would go away.
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Old 02-19-2010, 11:39 PM   #38
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I was very appreciative of the student loans that helped me get my BS in civil/structural engineering. The loans were paid back and even paid off early.
Me to although my total student loans were only $7,500. On the other hand I was helped by going to a public university, a ROTC scholarship for the first two years, working during school and in the summer. Mom and Dad helped a bit but only for the first 2 years, then I was on my own.

I think it is important to take a step back and look at the big picture. As a society we are much better off to have folks with with engineering, business, or nursing degrees in their early 20s and even liberal arts degrees , and doctors in their late 20s, than forcing people to save up for 10 years (tough to do without any skills) and then go to college in their 30s. So student loans are a net benefit to society.

On the other hand it is important that are very very very hard to get out of student loans. If you are a 20 something and owe $100K or even 50K in student loans, plus credit card debt and have no assets it would very tempting to declare bankruptcy and get a chance to start with a clean slate. Your credit score is eventually redeemable and even if you are forced to pay an extra 5-8% in higher interest cost for 7 years (while the bankruptcy is on your record), getting rid of $100K+ debt would probably make it a smart financial decision.

Unlike a home or auto loan they can't repossess your degree. So logically student loans should have interest rates similar to other unsecured credit like credit cards not the single digit rates that most student loan are at. The fact that student loans aren't dis-chargeable in bankruptcy makes student loans affordable. I think this is a good thing.

That said their are some very ugly unintended consequences. First the combination of government subsidized loans and the difficulty of getting rid of the loans has made for yet another example of easy money. I think a easy credit is a big factor in rising college cost (much like housing prices). Lenders (especially Sallie Mae) have a done a horrible job of applying any type of lending standards, and arguably have encouraged students to take on more debt than the could handle. I don't know what the solution is but, I think it starts well before the student graduates. Lenders needed to be more cautious about letting young people borrow excessive amounts of money. I also think that now days many students don't really appreciate how much "starving" they should do. Frankly, I see a lot of college students here in Hawaii on spring break, and I bet a lot of them are running up student loans to do it.


Full disclosure I have more than $100K in Sallie Mae debt so when Dr. Bisutti default it impacts my retirement in a small way and if enough people do it in a big way. I also used my senior year student loan to go to Europe, but hey I didn't get the money until April
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Old 02-21-2010, 12:03 AM   #39
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First the combination of government subsidized loans and the difficulty of getting rid of the loans has made for yet another example of easy money. I think a easy credit is a big factor in rising college cost (much like housing prices).
I've heard of many factors that contribute to rising tuition and the cost of attendance at private colleges. But easy credit has never been one of the significant reasons at private colleges; most would postulate that tuition and other educational expenses (housing and lodging) have typically outpaced inflation because of a multitude of factors such as increasing salaries and wages for faculty and staff, significant plant equipment expenditures, and the many revenue losing activities or enterprises that a college engages (e.g. running a big-time college athletic program is typically a money-losing enterprise). Of course, at public colleges, tuition and the cost of attendance are heavily subsidized by the taxpayer.

Here's an old and perhaps outdated article on why students borrow so much, which foreshadows the problem faced by Dr. Bisutti. Why Do Students Borrow So Much? Recent National Trends in Student Loan Debt. ERIC Digest.
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Old 02-21-2010, 03:25 PM   #40
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I've heard of many factors that contribute to rising tuition and the cost of attendance at private colleges. But easy credit has never been one of the significant reasons at private colleges; most would postulate that tuition and other educational expenses (housing and lodging) have typically outpaced inflation because of a multitude of factors such as increasing salaries and wages for faculty and staff, significant plant equipment expenditures, and the many revenue losing activities or enterprises that a college engages (e.g. running a big-time college athletic program is typically a money-losing enterprise). Of course, at public colleges, tuition and the cost of attendance are heavily subsidized by the taxpayer.

Here's an old and perhaps outdated article on why students borrow so much, which foreshadows the problem faced by Dr. Bisutti. Why Do Students Borrow So Much? Recent National Trends in Student Loan Debt. ERIC Digest.
Well perhaps that is because the people looking at the raising costs of college aren't economist. I agree that there are many factors, and that the case isn't as clear cut as the housing bubble fueled by easy credit but here are somethings to consider.

According to the National Center for Education Statistics "Enrollment in degree-granting institutions increased by 14 percent between 1987 and 1997. Between 1997 and 2007, enrollment increased at a faster rate (26 percent), from 14.5 million to 18.2 million." A similar increase was seen in the number of students taking the SAT test.

I couldn't find data on the increase in the number of colleges, but as an example in the last 20 years California UC system added one school UC Merced and in the last 10 years the Cal State College system went from 22 to 23 campus. So clearly demand for college outstripped supply by a healthy margin. We know from Econ 101 that when demand raises faster than supply prices raise and sure enough that is what we have seen.

We also know from various source including threatened lawsuit that the top private university are very aware of the tuition of their peers, and even collude on making financial aid offers to students. We have seen a tremendous increase in the profits endowments of top universities for example Harvard's endowment in 89 was 5 billion 99 12 billion and 2009 25 billion.

The article you linked and the WSJ article point out the tremendous increase in the amount of borrowing of student loans. Much like the housing market, where people didn't ask is this fixer upper in California worth a million bucks, but rather what are the monthly payments, we are seeing the same thing with college. Increasingly students aren't asking is worth 50K a year to go to top school or even if I borrow the money can I pay it back, but rather simply can I borrow enough?

As I thought experiment think about what would happen if we simply eliminated government subsidize student loans? I think we would all agree that a lot less kids would go to college. I contend it would also cause tuition prices to fall, along with force Universities to be more efficient, for example doubling professor teaching loads unless they were able to get grants.
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