Wednesday, June 09, 2010

The Feds operate a predatory loan business

aka Federal Guaranteed Student Loans.......

Here's a sob story about a recent grad who was forced into student loans she'll never be able to repay (thanks reader Jeremy for the link)

Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.

Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she's been enrolled in night school, which allows her to defer loan payments.

The line you hear from the education establishment is that a college degree is worth on average a millions dollars more in lifetime earnings over those who don't get advanced degrees.

But that varies greatly depending on what your degree is in.

Take Ms. Munna. What did that $100,000 in educational investment yield her skills in?

Well, if you read the article, you'll never know........ oh...... wait........ There it is...... in the second to last paragraph.....

She recently received a raise and now makes $22 an hour working for a photographer. It's the highest salary she's earned since graduating with an interdisciplinary degree in religious and women's studies. After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren't being deferred, which would not leave a lot left over.

So she spent on $100 k on religious and women's studies? What, couldn't she get into the bowling and unemployment degree program?

But seriously, didn't anybody have the balls to tell this ding dong that unless you're willing to grow out your body hair and get a PhD in one of these disciplines, your degree isn't worth the photography paper you're currently working with?

Apparently, her parents never said anything.

The bank didn't bother because they get paid regardless of your use to society. Unlike a traditional loan where a lender makes a determination of your ability to repay based on a number of factors, they know they get paid by the feds.

Of course, the feds don't care because their deal is stronger than a loan shark. See a loan shark might take out a finger or break a leg but then you run move away and it's usually over with. But the feds will hunt you down till the day you die to get back their money. These loans can't be discharged through bankruptcy, they'll seize your tax refunds and they'll garnish your wages. You are certifiably screwed.

As a result, they really don't care if you major in Wild African Safari, they'll ultimately get their cash.

So we end up with a pack of trained Kinko's employees looking to make use of that women's studies degree.

And not one person in the process gave a thought to whether that was worth a $100K investment.

On the bright side, Nancy Pelosi says that at least your health care will be paid for while pursuing your passion in desktop publishing.

1 comment:

Anonymous said...

Let's say I were an employer. a resume that showcased a "Women's Studies" degree would be a huge red flag. If you've ever worked with someone that has one of these diversity arts degrees you know what I'm talking about. They spend 8 hours a day trying to be the company social acivist that no one asked for. few actually do what they are paid to do. Half end up suing the company that paid them for years.

I bet this chick has lost several jobs that she would have otherwise been able to get with just a GED. Her degree works against her.