Another huge student loan article - "The $555,000 student-loan debt"

<p>Student</a> loan balances, default rates climb; 'good debt' goes bad - MSN Money</p>

<p>
[quote]

When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.</p>

<p>It is the result of loan payment deferrals that Bisutti got while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.
*"Maybe half of it was my fault because I didn't look at the fine print," Bisutti says. *"But this is just outrageous now."
...
The entire balance of her federal loans will be paid off in 351 months, when Bisutti will be 70 years old.
...
Her damaged credit has prevented her from buying a home or a new car. She says she and her boyfriend of three years have put off marriage and having children because of the debt.
...

[/quote]

Half of it?</p>

<p>I think learning how to read, taking the time to read what one is signing, and actually thinking about what one just read before signing, would be advisable. There are too many students who pay little to no attention to the terms or totals and the consequences of the loans they're taking on. Even some otherwise intelligent people seem to skip some of this most basic bit of practical common sense. We've seen some of it here on CC where some parents have kindly informed the student (or other parents) of the impact of paying back the large loans and the reality of it. Too many people are simply living in the present and not considering practical long term consequences. Fortunately this example is somewhat extreme and not the norm.</p>

<p>Bottom line - think through the real impact of the cost of college and loans rather than simply dismissing it as a triviality. Use amortization calculators; consider the realistic salary received and when it'll be received (i.e. some docs make a lot of money, eventually, but not necessarily immediately); consider the costs of living, and how the loans will really impact your lifestyle. Consider living within your reasonable means.</p>

<p>I honestly cannot imagine not reading the fine print before you sign anything, that is one of the most preached about life lessons and SO MANY people refuse to do it. I also can't fathom saying "Maybe it's half my fault." I also made the mistake of taking on big debt, though nowhere near as much as hers, but how could it be ANYBODY'S fault but mine!? How can a full grown person say something so absurd? What did she THINK was going to happen?</p>

<p>I agree. Sometimes it is best to look long term when it comes to college finances. Is it in your means to be able to pay off your debt if you graduate from X University or would it be better to go to an alternative route? </p>

<p>Plus, you always have to read EVERYTHING on a form before you sign because you never know what could be hidden in the fine print-spikes in the interest rate in the future or in this case a hidden monetary fee. While it is true that college is getting expensive for everybody, in this case, it is her fault for overlooking the 50k charge</p>

<p>At 41, she can't really delay having babies. Her bio clock is almost ticked out.</p>

<p>The shocking part is that she's 41. Most kids here on CC think that by the time they're 35 (or so) they'll be making millions as physicians, so they think big loans are no big deal.</p>

<p>Pretty sad, I could see how someone could go into debt for $250K for medical school and think it wouldn't be too bad to pay it back as a DR. I wouldn't do it, or let any of my kids do it, but high debt is not uncommon among physicians. The fact that is was $250K in 2003 and has gone up to $555K is just crazy, over 100% interest in less than 10 years. People tend to understand the interest rate stuff, I just think they don't look carefully at the default sections because they think they aren't going to default.</p>

<p>
[quote]
Bottom line - think through the real impact of the cost of college and loans rather than simply dismissing it as a triviality. Use amortization calculators; consider the realistic salary received and when it'll be received (i.e. some docs make a lot of money, eventually, but not necessarily immediately); consider the costs of living, and how the loans will really impact your lifestyle. Consider living within your reasonable means...

[/quote]
</p>

<p>I wish every student applying to college had to read and sign this statement.</p>

<p>Having said, a 50K+ fee for turning it over to a collection agency? Can that be right? How do they justify that kind of fee?</p>

<p>^Sounds unjustifiable. I fully believe in personal responsibility when it comes to things like this, and really it comes down to reading the loan agreement and deciding if it is worth it, but I don't think you can deny that there are a lot of predatory practices amongst student loan companies that basically target the naivete of the youth and exploit it mercilessly</p>

<p>She should have gone into a more lucrative specialty. She could have had the loan paid off in a couple of years.</p>

<p>Debt is actually one of the biggest reasons that there is a huge lack of GP's and family practitioners in medicine.</p>

<p>No fault on the part of the people issuing the loans for making ridiculously complicated contracts that are written by people who have spent over 3 years of their lives reading incredibly dense prose and so don't think that the average person will not read it.</p>

<p>Also, I hope everytime YOU INSTALL SOFTWARE ON YOUR COMPUTER YOU TAKE THE TIME TO READ THE LICENCE AGREEMENT THAT IS WRITTEN IN ALL CAPS AND IS ON A COMPUTER SCREEN THAT MAKES IT EVEN HARDER ON YOUR EYES. AND THEN THEY GIVE YOU A SMALL TEXT BOX THAT YOU CAN'T EXPAND TO MAKE IT EASIER TO READ. I DO HOPE YOU KNOW THAT WHEN YOU DOWNLOADED AND INSTALLED ITUNES ON YOUR COMPUTER, THAT YOU MADE SURE TO TAKE NOTICE OF THE FACT THAT YOU ARE NOT ALLOWED TO USE ITUNES TO DESIGN AND BUILD NUCLEAR, BIOLOGICAL OR CHEMICAL WEAPONS.</p>

<p>^Well, personally I would be a little more cautious when borrowing 250K than when installing a piece of software, but I'm also not really stupid so I don't know if that really applies to people like the one the article is written about.</p>

<p>I think the article makes it sound a bit like she was somehow victimized by the lenders, yet it also mentions that she missed payments, didn't read the fine print, and was carrying credit card debt...having just gone through fin aid counseling for school myself, they emphasized, multiple times, not to live above your means and to make sure to never miss payments, because it would be much more difficult to pay off if it went into collections (not to mention killing your credit score).</p>

<p>With that type of debt, I don't know why she wouldn't pursue work in an underserved area for loan forgiveness...</p>

<p>I would guess with debt like that, a lot of it is private and therefore not eligible for loan forgiveness. But that's just a guess, I haven't much experience with how much federal aid one can get for professional school.</p>

<p>the thing about it is that (at least in the case of the traditional 17 or 18-21 year old) with undergraduates, they're asked to consider all of these things when they don't have the brain development to do it yet. the part of the brain that's responsible for long-term reasoning hasn't fully developed. that happens at 25 or so. so in that sense, it's almost criminal to expect the average undergrad to 'know' what to do when faced with loan documents.</p>

<p>Don't quote me on this but I believe if certain MDs (FP, Pediatricians) agree to work in underserved areas (very rural, inner city) for ~5 years, there is a federal program that pays off medical school loans. It seems like this would be an appealing and logical option.</p>

<p>My cousin joined the navy to have the gov subsidize her medical school, cause she knew she/her mom could never afford it otherwise. You have to plan ahead and think about what is reasonable. Even $250,000 in debt in 2003 was not reasonable.</p>

<p>But she is 41 years old! She finished medical school at 34. Sorry but it's time to grow up.</p>

<p>She needs to see a debt resolution counselor/attorney. They would likely be able to negotiate something for her. </p>

<p>My friend went to medical school several years ago at age 55. She is now a practicing physician. And complains about the loans that make her job unprofitable. But she well knew the numbers going into the situation. A straight A student at age 55 with high MCATS and other stats and she did not do the math to see if this venture was financially worthwhile? I like her a lot and give her every kudo for what she has accomplished, wish I could do the same, but I don't have sympathy with her financial predicament. It was clear, and the points were raised numerous times. It's just at the time she was pursuing this route she did not choose to focus on that issue or give it any thought at all. Living it day to day, dollar to dollar is a whole different story.</p>

<p>This is no different than the many kids who are ever so desperate just to get anyone with any terms to give them a huge loan so they could go their dream schools with no concerted thought on how they are going to pay back that much money.</p>

<p>This is similar to deliberately choosing a low-paying field for any reason...you love it, you want to make the world a better place, whatever....but don't go into debt for it, knowing the numbers just don't work out for a loan repayment.</p>

<p>Being a medical doctor pays well, but you have to consider how your loans will affect your lifestyle and put an upper limit on the loans, or your are in deep doo-doo. </p>

<p>As many other posters have pointed out, here and in other threads...how can smart people be so stupid about money?</p>

<p>And how could lenders be so stupid as to lend so much to people without any collateral? You can't repossess their education!</p>

<p>I got to wonder, what actually happens if she just never pays anything towards it. Obviously she will never get a loan for anything else, but any other negative? What can the bank actually do?</p>