Student
Loans, They Seem Like A Good Idea
(at the time)
By Carl Hampton
Author of “From
Credit Despair To Credit Millionaire”
This is the time of
year when every day seems to bring new graduation invitations for the
class of 2006 in the mail. I
began to wonder what it must be like to finally leave school with all that
energy and excitement only to find out that you are now going to spend
years paying off those student loans that seemed like such a good idea at
the time.
The Centre for
Economic and Policy Research reported recently that almost 65% of all
students use loans to pay for their education.
With many students racking up debts of $90,000 or more you start to
wonder what it must be like to live under that type of pressure.
How do they manage to pay off these loans and still have a life?
There are many areas
outside Southern California where you could buy a very nice home for that
amount of money.
Do we really need to
put the youth of today, our future, under this type of pressure all in the
name of PROFIT. The laws
governing Student Loans are some of the most powerful laws in the land. Our leaders have insured that it is a MOST profitable
business for the lenders. These
lenders have more power than all other lenders.
Credit card companies
and mortgage lenders cannot
do what Congress has allowed the student loan providers to do.
Sallie Mae is the
largest student loan provider in the country.
They employ over 10,000 people across a number of states.
Since they became a public company trading on the stock markets,
their shares have gone through the roof.
Let me outline why this is such a wonderful business for the likes
of Sallie Mae. The loans they
give out are all guaranteed by the government (sorry taxpayer), so
whatever happens they get their money.
This means, unlike a
normal lender who has to calculate risk against reward before agreeing to
give out a loan, for these providers there is NO risk, it's all reward.
It does not end there.
Should a student default on a loan (almost 25% do), the provider
then gets paid by the government (sorry taxpayer) and they are now allowed
to send that debt to a collection agency.
It's normal for the loan to double in size at this point.
Sallie Mae owns a number of these collection agencies, the law
allows that too. They now
have the power to garnish your wages without having to go to court.
They can also garnish your social security money, something no
other lender can do. Sallie
Mae is allowed under these
laws to keep 25% of all the money recovered from the collection agency
(that they own, nice business if you can get it).
Where I come from this
would be called Legalized Mugging or Jobs for the Boys.
Most of these students
can forget about getting married or buying a home.
There main concern is “where's next months payment coming
from”. Maybe it's time we
showed a little more compassion to these students, after all they are our
future.
Have an
opinion or a question you would like me to answer, then write me! Carl@freelocalpapers.com
The information provided here is meant to be a beginning
to your own research and just food for thought, I take no responsibility
for your application of the information. You may come up with totally
different findings as the Net is a constantly and consistently changing
place. Keep learning.
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