busyStudent loans turn into crushing burden for unwary borrowers
Natalie Hickey picked up $140k in student debt, some of it at interest rates as high as 18%. Her monthly payments are roughly $1,700, more than her rent and car payment combined. Caught in an increasingly common trap in the nation's $85-billion student loan market, Hickey borrowed heavily, presuming that all her debt was part of the federal loans...
All lenders should be obliged to disclose complete terms and all fees, including the total amount to be owed, before the loan is signed and legalized. Otherwise, predatory lending results. It's difficult or impossible to make sound decisions with incomplete information, especially for young and inexperienced people.
Besides, in this economy, how many students are going to get a job that will make enough to pay off huge loans? "Ya want fries with that?" Talk about an obvious bubble in search of a pin! Yet somehow, I'm sure this will escape the notice of the people who are supposed to be supervising America's economy.
December 29 2008, 21:49:42 UTC 12 years ago
I don't think they mention in the article how SM is refusing to give forbearances 'into the future' now. Instead, they want $50 per month, per loan to apply to bring your account into "current" status. None of this money is applied to the loan.
When I took out the loans I have with them, I believe I asked about their fuzzy forbearance statements, and was assured that there would never be a problem if it took a while to find a job. (It was three years ago, though. I don't have a photographic memory.)
They also make you sign a statement when you take the money to the effect that you won't file bankruptcy on them. Seriously.
I only have two loans with these people, and the amount has doubled in about three years. I can't imagine having more than that.