• Gravitywell
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    8 months ago

    I will never understand why people work so hard to pay off student loans…If you’ve been paying off a loan for years and the balance just keeps going UP, the sensible thing to do is default on the loan, accept the consequences of that (which is minimal with student loans) and move on with your life

    • @[email protected]
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      08 months ago

      I thought one of the big problems with America’s student debt was that you can’t effectively default on it? That it will still persist even after filing for bankruptcy for example?

          • @[email protected]
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            08 months ago

            Joe Biden wrote and voted to pass the very bill that makes student loans immune to bankruptcy as part of BAPCPA back in the 2005 when he was a senator.

            Learn the voting and bill submission history of your politicians you utter fuckng moron

      • Gravitywell
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        8 months ago

        By default I just mean stop paying. You can’t get rid of the debt by bankruptcy or anything, you still owe it, but it also doesn’t affect peoples credit score as much as many seem to think it does.

    • @[email protected]
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      08 months ago

      You can’t do this with student loan debt which seems incredibly dumb. I also don’t understand borrowing 100k for school.

      • Gravitywell
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        08 months ago

        You’re thinking of bankruptcy, you can absolutely stop paying student loans, you’ll still owe them but they can’t force you to pay them.

      • @[email protected]
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        08 months ago

        It’s not the original loan amount. The trap in student loans is the initial deferment when they gain interest while you aren’t paying and taking classes for 4-6 years. One of my loans was 14k and when I graduated had more than doubled. By the time it was paid off in my 30s the total sum I had paid in to interest was over 100k. And I was paying on an accelerated cycle for the last 5 or so years to kill it faster.

        I had discovered with one of my servicers that they were applying my overpayment only to interest as well so the principal would not go down and keep generating new interest. This is actually illegal now thankfully

        • @[email protected]
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          08 months ago

          Wow Americans start accruing interest on student loans while you’re still in school?? That’s crazy.

          • @[email protected]
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            8 months ago

            Yeah. There are two kinds of loan as part of the federal loan program. Subsidized and unsubsidized. You get granted a pool of loans from both kinds when you apply for aid. The unsubsidized loans accrue interest the whole time. The subsidized loans are equally horrifying mostly because the interest is accruing, it’s just being paid for by the taxpayers on your behalf. Neither public loan actually accrues no interest while you are in school

            The insidious part is this is all sold to you at 16-18 by your own student advisors and the university as “financial aid”

      • @[email protected]
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        08 months ago

        I also don’t understand borrowing 100k for school

        Other than the fact that college tuition has become absurdly expensive, the predatory fees and interest structures of student loans means that most people who have been paying theirs to the best of their ability for several years actually still owe MORE than the original amount borrowed, which I’m guessing is the case here.

        The terms and conditions that people who are usually 17-18yo and know fuck all about contract law are coerced into agreeing to in order to “ever make something of themselves” would make Franz Kafka disown The Trial for being utopian sentimentalism in comparison.

          • @[email protected]
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            08 months ago

            Most 4-year universities in the US average around $15k after federal aid, plus rent in a city like Boston or Atlanta will probably cost you a lot more than $15k per year, not including cost of living. Interest rates for student loans can range between 4% and 17% monthly. $100,000 is a little high but very realistic.

          • @[email protected]
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            08 months ago

            Which part of “most people who have been paying theirs to the best of their ability for several years actually still owe MORE than the original amount borrowed” didn’t you understand?

            10k/y for 4 years comes out to 40k and it’s not at all unusual for people to end up owing 2.5 times the original amount or more in spite of doing the literal best they can to pay it off. That’s how awful the terms and conditions of student loans are.

        • @[email protected]
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          8 months ago

          Are in-state tuitions not a thing anymore? I’m old but when I went to school it was the difference between something like $30k a year and $5k a year.

          Edit: for one local major university in a kinda shitty state (but a good school), I guess now it’s 10k/year vs 30k/year

          Also, how many 17-18yos are deciding on this stuff without parents’ help?? I mean, clearly not all, but surely most?

          • @[email protected]
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            8 months ago

            My parent encouraged me to take out loans including housing, then overcharged me rent from it lol

            Not all parents are helpful

    • @[email protected]
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      08 months ago

      You can’t escape student loan debt by default, bankruptcy, etc.

      The best thing you can do is sign up for IBR and accept that 5% of your income is lost for 20 years, and hope that whoever is president at that time isn’t a sadist cunt. Also try to save some extra money for possible income tax on the forgiven amount.

      That’s assuming your loans are subsidized. If they’re private, try delivering for DoorDash on the side!

      • Gravitywell
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        8 months ago

        I’m saying you can stop paying, Im not saying you won’t still owe them, but I know people who owe tens of thousands in student loans and have not paid them a cent in over ten years, they have a credit score of around 800, its never affected their ability to get any kind of credit or housing.

        I think people over estimate how important they are or what kind of consequences there are for not paying as if it ruins your credit score forever or something, and its just not true.

          • Gravitywell
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            8 months ago

            Okay but what I’m saying is, why work extra hard and take a second job? Why not just make a single minimum payment every 270 days to avoid them moving to the next steps? There are just so many other options besides working a second job to pay them, and so many delay tactics you could employ to avoid getting to the point of garnished wages.

            • @[email protected]
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              08 months ago

              You’re right. Im late 30s, took out tons of loans at 17yo, and my dad swindled me out of anything that didnt go directly to tuition.

              I stopped paying a decade ago, keep waiting for my checks to be garnished, but hasn’t happened yet.

              I don’t use credit, im financially not an adult in many ways, but i kept waaaaay more of my money than anyone else i know.

              • Gravitywell
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                08 months ago

                thank you! Ive yet to hear a single story from anyone who’s actually defaulted and had wages garnished for student loans. Sure it can happen but its pretty rare.

                • @[email protected]
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                  08 months ago

                  Same- all threats, don’t know anyone actually being garnished.

                  When my choice was pay loans or eat, i ate, and i sure af am not going to call someone and offer them money just because it got slightly better a couple years later. Ive never owned a new couch, i am not well off.

                  If debtors prisons come back, I’m fucked, but until then, frankly, what can they do? I can’t afford a house or kids either way, and i am not throwing away anything on interest that will only grow and stress me out.

                  I have no idea what i must owe now, over triple my salary, min.

                  They sold a for-profit bullshit degree.

                  Fuck em

                • Jorn
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                  8 months ago

                  I’ve had two employees at my work get their wages garnished for defaulting on student loans. It definitely happens.

                  Edit: One of the guys told me flat out that he will never willingly give a cent towards his student loans ever again. The other guy was going through some financial hardship after leaving here and we got a notice to garnish but he was no longer employed with us so we just had to respond back to the notice.