My sister took loans during her BS and MS, her grace period elapsed and she still did not get a job, so she had no choice but to go for a phd.
Now she is doing her phd, but she keeps getting calls from creditors about her loans, I think they should stop calling her and freeze the interest, after all a lot of people are in the goverment are responsible as to why someone with a masters in immunology still cant a job
She is doing her Phd in France, and I also was working outside the country (till i got fired, but i am still there).
Communicating with these guys from abroad is tough, different time zones, hard to understand what is going on, so many different people calling and I am not sure who the hek is who.
Does anyone have experience in this domain? Should she be able to stop the interest and not be considered in default, and possibly get financing for her MD, she got accepted for an MD in the UK.
Your joking right? I think you would have a case if the loan agreement said that if she can not get a job that they would defer repayment, but I doubt it said that. You don’t get to add new terms to a loan agreement to suit your needs when things change. And who pays for this “frozen interest”? You do realize that the government does not have any of its own money right?
A better question would be why is the government subsidizing student loans in th first place.
I thought interest was deferred if you went back to school, no? Maybe matriculating overseas makes a difference. Thought you could also get deferment for economic hardship. Pretty much impossible to just walk away from student loans if you ever want to set foot in the US again though. It is my understanding that they are not forgiven in personal bankruptcy and the govt. can garnish wages, use tax refunds as payment, and even sue in civil court.
Which government is responsible for her not being able to get a job? She apparently had no problem getting into a foreign school for her PhD, no foreign jobs available or are those governments responsible too?
If she can’t pay her current loans the last thing she should do is take on more. If she’s in the medical field she shouldn’t have a hard time finding a job. She’s better off working in a hospital setting (tech, messenger, etc) and working at night to get something more specialized like nursing, PT, or lab work.
Immunologist is one of those professions that 10 people get qualified for every one position available.
So you dont think the way the U.S. gov ran the economy for the past twenty years has anything to do with people being unable to find jobs.
Finishing up a Phd, and already accepted into a top MD, we can hardly say hard work is a problem. I quit during first semmester of pre med, first organic chemistry course makes CFA Level III look like childs play.
If you have government loans, there are ways you can defer them if you’re unemployed or in school (I believe the way it works is that for unsubsidized the interest still builds up but maybe not the case for subsidized). However, that’s often not the case with private loans.
I understand your frustration, but the link between the general “the government did things to the economy and I can’t find a job” and the “therefore I shouldn’t have to pay back my very specific student loan obligation” is just too tenuous a causal chain to justify your position. It’s not like the government was actively trying to convince you to take loans you know can’t pay in order to make a profit… that would be a little more sustainable since it would suggest possible fraud… if your loans are for a for-profit private school, then there are a few class action lawsuits that might get those schools to be responsible for some of your debt.
In the US, student loans can be deferred or foreborne due to economic hardship, which freezes the payments but lets the interest capitalize. And if you are still in school, you should be exempt from payments, and depending on the type of loan, possibly even the interest, but you aren’t exempt from eventual repayment, although being in a foreign school might muck up the rules on that.
One of the reasons I am not in academe any more was that I noticed my students graduating with 100s of thousands of dollars of debt (these were masters students), and wondering how the heck most of them were going to pay it back (most were not finance/business types). It was clear that tuition was going up year after year faster than inflation and that students were making up the difference by going into debt, and yet the jobs were not there to repay the debt, particularly at the undergraduate level. This was just a bad sign for academe in general, because most professors feel very comfy, not realizing that universities are still businesses that need to have sources of revenue, and that source looked headed for a crash.
This student loan bubble is going to get really ugly. It does suck for students to graduate with tens or even hundreds of thousands in debt. Even with a good job, that’s a huge hurdle to overcome.
There are plenty of people to blame - Universities and their ever rising costs, the government for being general inept, and students for taking on too much debt in the first place. It’s pretty much the housing crisis just with a different name. And it’ll end about the same way.
In this particular case, even though it sucks for your sister she has to pay. Just like people that bought homes they couldn’t afford, she’s way over her head in student loans. Why the hell would she continue to take on more debt when she’s SOL already? Sorry, but your sister is just as much a part of the problem as the government.
Sweep the big difference that you didn’t mention is that unlike an underwater mortgage, you can’t just walk away from a student loan. In the vast majority of cases, the lender, be it the government or a private entity, will eventually get their money somehow, sometime.
True, which may make it an even bigger problem. The optimistic spin on that is it may be much easier (politically) to forgive student loan debt than reducing principal on mortgage debt. I think people would be willing to let the government take it on the chin for people that went into debt to better themselves (in theory) versus people that bought a home they couldn’t afford. I’m not for bailing anyone out, but I could see it happening.
The other big difference is that a student loan is collateralized by human capital as opposed to a mortgage collateralized by the house/condo physical asset. I never had loans, but I wonder if rates vary according to the quality of the future human capital…i.e. does a computer science major get the same rate as a linguisitics major?
I remember before the 2008 crisis there were pundits out there saying “look, there is definitely a housing bubble, but they are back by assets. These are not going to zero. This is not Worldcom.” It turned out to be substantially bigger that Worldcom, which seems obvious in hindsight. If the number of non-performing student loans rises to crisis levels (whatever that is), what is the chain of events? What happens if someone defaults on a student loan today? The tax-payer just eats it?
Well, the size of the mortgage market is also substantially larger than the studen loan market. So when the market collapses by 10 or 20%, the ripples through the economy are WAY larger.
Secondly, when a student defaults on their student loan, it doesn’t make the value of your education any less than it was before. If anything, it makes it more valuable, because it will be harder for the next guy to get a loan and education. With mortgages, if one guy forecloses on your block, your home equity takes a corresponding hit.
Yes, this is all the government’s fault. Americans taking unreasonable levels of debt without thinking through their obligations has nothing to do with it whatsoever.