Reply to Canceling $10k of student loan debt is stupid.

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]To the poster with an income of $62,000 and student debt of $35,000 that was paid off in three years; You did it right. Your student loan debt totaled less than one year of take home pay.

The student loan debtors with real problems owe more than one year of gross salary. This occurred with a lot of law students who finished law schools during a 5 year recession period in the legal field. Many took out loans of well over $100,000 expecting to land a job paying anywhere from $120,000 to $160,000 plus bonus about 10 years ago. Many could not get a position as an attorney & had to work at gross salaries equal to just 50% of their student loan debt. Minimum payments (based on their income) resulted in a growing loan balance due to compound interest.

Law schools sent out very misleading literature regarding legal job placements and earnings. At least a few law students were sued by former students (I recall one against New York Law School--NOT NYU). Ultimately, the case was dismissed, but many believe that the case had merit.

I think that for 5 or 6 years legal employment came to a near standstill and large law firms started farming out routine legal matters to India. When the legal market picked up, many layers had already missed out on any real opportunity in biglaw at biglaw salaries. Debt grew to $200,000 and even much higher.

Unfortunately, law school are viewed as cash cows by many universities. Student loans were not limited to $27,000 or so as they were for undergrads. Without any chance of bankruptcy discharge, lenders lent without collateral, credit checks, or any other standard credit lending safeguards for this large unsecured debt. In fact, law grads without out-of-control debt can be denied clearance to sit for a bar exam or to join some state bars.

Legal journals reported lots of incidents regarding potential suicide situations.

Too many liberal arts majors who thought that law school would be the path to a lucrative career.

An organization called law school transparency was born out of this financial mess. LST gets law schools to share real data regarding employment of their law graduates. Law schools lied & massaged figures for marketing purposes and for US News rankings that mislead many of their customers--law students--and prospective customers.

Law school transparency is the product of several Vanderbilt law students and Vanderbilt law school graduates.

Medical school student debt is a much different situation as doctors have remained in high demand with fairly predictable salaries. Nevertheless, many end up with debt above $300,000--even to $400,000. Repayment often takes 20 years.

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Thanks. With regard to law students, I know a few and several of them used a portion of their student loans to purchase a new car their first semester. From what I understand it was a common practice because they reasoned "I'll get a high paying job and student loans are low interest so its a smart financial move." Now, that is not the schools are the loan providers being predatory. That is the borrowers misusing the system.

I have one friend who went back to grad school in his 30's and used student loans to help finance his divorce/buy his wife out of assets. Again, that isn't predatory lenders, that is the borrower misusing the system. That same guy has been making minimum payments for a decade and will benefit from this loan forgiveness.

I don't have much sympathy for people with student loans because I know too many people who misused the system and never put effort into paying back their loans. I personally do not know anyone who actually needed forgiveness. Everyone I know that still has outstanding loans have stuff like 4 wheelers and other toys. [/quote]

You hang with a different crowd.

I have read about law school graduates who have committed and attempted suicide because they were overwhelmed by student loan debt. This, of course, is extreme. But many delay marriage, cannot engage in a serious long-term relationship as most are now schooled to inquire about a dating partner's student loan obligations, forego having children, and are unable to purchase a home. The market for lawyers took an unexpected drastic downturn for about 5 or 6 years. When mega sized law firms stopped farming out business to India and to West Virginia, they time had passed for a very large number of young lawyers to get a crack at biglaw and to earn sufficient funds to repay their student loan debt.

I have never heard or read about the practices that you describe. I have read of some using student loan money to invest in the stock market until the payment deadline.[/quote]

Buying a new car your first semester with law school loans is pure fantasy. You would have to be rich enough to not need those loans for living expenses and also stupid enough to use 8% student loans rather than the 0% car loans that were common place. I actually kept my surplus in a high-yield savings account to get a few extra cases of beer by end of semester.[/quote]

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