You Can’t File Bankruptcy on Student Loans, Understand College Without Student Loans, and Subsidized vs. Unsubsidized Loans.
There are many reasons you should strive to go to college without student loans, one is the crushing pain of debt, and another is that you are not allowed to file bankruptcy on student loans due to hardship.
If you start a business with any amount of money and your business fails, you can file a business bankruptcy on your loan balance due and later start over with replenished credit. If you buy a home and fail, you can short sell your home or let it go into foreclosure and you can later buy another home, once your credit clears.
This is not the case with student loans, politicians have rigged the system, so no matter what, you have to pay. You only have a short grace period after you graduate, but during your grace period, if you don’t have a job, you still have to pay.
If you don’t have a relative who is willing to step up and make the payments until you get a job, your life can be ruined forever with bad credit.
The unpaid school loan balance grows exponentially due to collection agency costs and interest on interest overdue charges. The balance can double every 3-4 years until one day you open a letter and find you owe $100,000 on an original $5000.00 student loan. It has happened to many and it does not have to happen to you or anyone else.
Recent New Programs to Save College Student’s Credit
The new programs the Obama Administration created for college students with student loans has made payback easier, but you must apply for them, and even though your payments are decreased to an affordable rate until you find a decent job, you must still make your payments. There is no hardship benefit for most.
The program is called the income-based repayment program. There are others as well. This program is mostly for government-subsidized loans, but there are programs for private or unsubsidized loans, but they are more difficult to get help.
If you delay regular student loan payments with an income-based repayment plan, the delay in paying interest can raise your balance two to three times the original loan balance.
So, it is recommended that you do EVERYTHING in your power to make your regular payments. The situation is dire for unsubsidized loans; these lenders can be brutal.
It is better to find an actual loan forgiveness program. There are different types of programs listed in the Consumer Financial Protection Bureau Online.
They charge interest while in school, and you don’t get the benefits that come with government-subsidized loans. Subsidized loans don’t charge interest while you are in school and therefore cost much less than unsubsidized loans, sometimes as much as half.
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I Went to College with Almost no School Loans
I went to graduate school with a horrible amount of school loans so I know the difference. I had unsubsidized and subsidized, it seemed to take forever to pay off my unsubsidized loans. In college, I had one very small subsidized loan that took only a couple of years to pay off.
I figured out why my unsubsidized loans took so long to pay off, but by then it was too late, I just suffered and eventually, they were paid. It took me a total of 12 years to pay off my loans, it would have been sooner if I figured out the game they were playing with interest and time.
When it comes to graduate school, most of the financial aid is student loans, and some the predatory unsubsidized loans. Focus on scholarships or fellowships if you plan to go to graduate school.
I Was Lied to About the Cost of my Private University Graduate School Up Front
It is extremely important to research each and every school you consider attending before you apply. I attended a state university for undergraduate school and had no problems with loans. I only had to take out a tiny loan, which I paid back quickly after graduation. I researched every school I considered attending graduate school.
The one problem I had with the graduate school I actually attended was that I did not include current students in my research. I was given an estimate of the cost of attendance for four years by the student affairs office. It turned out the actual cost was double what I was told, and that was after I lived like a pauper in graduate school.
At one point I planned to leave because the costs were getting out of control, but after a lot of introspection, I decided I was halfway there so I should finish. I don’t recommend you go to a private school unless you have a full scholarship, full fellowship, rich parents, or family members who can pay for your college.
If you are poor or middle class your financial aid package will be lop-sided with huge loans, and in some cases bad unsubsidized loans. You have to ask yourself; Do I want to spend the rest of my life paying on school loans? It could very well happen if you attend a school too expensive for your budget.
Understand Student Loans and College Costs with This eBook
Do Your Research Before You Apply to Colleges That Interest You
Every college and university catalog is currently, online. If you have a computer at home, you are all set. If you do not you can go to your local library and use the computer there. Here is what you do. First of all, look at the cost, many of the more expensive colleges have their cost hidden, so don’t give up, it’s there. Search total cost to attend college X (substitute the name of each in the X field).
You should find a grid. In that grid, it will explain all of the costs for four years, down to the paperclip. I have looked, and it is the norm, I did not find a single college or university without the four-year cost of the college grid.
The private schools will display outrageously expensive costs, some of them I looked at a cost between 200.000-300,000 for four years. Keep a strict budget in mind no matter what.
Those costs are definitely for rich kids or the lucky few who get guaranteed scholarships. It makes no sense at all to go to a school like that with a financial aid package that includes school loans.
Your loan bill at that school could definitely scar you for life. You will have either a lifetime of loan payments or have a good chance of a lifetime of loan default if you become ill, disabled, or can’t find a job that pays enough to make the payments – there are no guarantees. Coming Soon, Part 2 of this article.
As of 2017 we now have a new administration. They have not said what they will do with the student loan fulfillment problem, but have hinted toward doing nothing and taking down the Consumer Protection Financial Bureau website.
Because of this, the student loan crisis could hit epic proportions if students continue to have more debt than they can pay with low job opportunities including, no job or low paying jobs. Update to 2022 – The Consumer Protection Financial Bureau was upheld by the Biden Administration.