Students from affluent families are taking out college student loans at twice the rate of two decades ago
The other day a caller said “I used a document preparer or bankruptcy petition preparer. Certainly they have obligations to keep my social security number confidential?” Unfortunately I had to say “Oh how wrong you are.”
Bloomberg News reported that students from affluent families are taking out loans for college at twice the rate of two decades ago. Fifty percent of graduates in the class of 2012 whose parents had incomes of more than $125,700 left college with loans, up from 24 percent about 20 years earlier, making them the fastest-growing borrowers group, according to a study released today by the Pew Research Center. For graduates whose parental income was below $44,000, the rate rose to 77 percent from 67 percent.
Nationally, the $1.3 trillion in outstanding education loans, which topped U.S. credit card debt in 2010, continues to rise.
Think about the information you are giving this stranger: all your financial information, your children’s names, bank accounts and your social security number. You do this without the slightest guarantee that the information will be kept safe.
Nationally, the $1.3 trillion in outstanding education loans, which topped U.S. credit card debt in 2010, continues to rise. Graduates of the class of 2012 who took loans for a bachelor’s degree owed $29,400 on average, up from $23,450 in 2008, according to the nonprofit Institute for College Access & Success in Oakland, Calif.
Why did I include a wheel of chance in this blog? Because I believe that student loans are a gamble. Students and their parents are betting the rest of the student’s financial life that their education will be able to pay for the student loans. The parents are betting their financial security that the students will be able to pay the loan, otherwise the parents may be financially responsible.
Schools make millions of dollars through student loans. The lenders are not required to disclose the true financial burden. These loans are given without regard to the students ability to repay. There is no accountability for the quality of the education provided by the schools. At this time there is currently 1.3 trillion dollars (yes that was trillion, not billion or million) in student loans.
Please do not gamble away your future, and that of your children, by taking student loans you cannot afford to pay after graduating. This is not to say that education is not valuable – my current profession helps me support myself and my family. My point is to be careful to do your best to keep student loans to an absolute minimum. I have seen numerous borrowers take thousands of dollars for a degree that they never completed or was useless in the “real world”.
Note – if you ready have federal student loans and cannot afford to pay – check out the income based programs.
Warning – Never use a student loan “workout” company. These companies are in the business to take your money, but rarely, if ever, help the borrower or guarantor. There are a few student loan lawyers I can recommend – just call our office.
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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