Rising college loan default rates

elodyCOH
Sun, 26 Aug 2018 16:56:09 +0000

Some of it is that students and parents are allowed (and encouraged to by schools) to go out on the financial brink to attend the school. The students who have problems are likely the ones who ended up having to leave school before they got their degrees. It’s an awful position to be in to be carrying a level of debt that may be similar to someone who actually has a degree, but you do not have the credentials to get a job that will pay enough to make the payments. Many students and parents have magical thinking believing that the college or university will work miracles to make sure that a top student doesn’t have to drop out for their senior year. The fact is that they will NOT. If you don’t have enough to pay, you will have to leave. You are still on the hook for all the money you borrowed. It’s all due 6 months after you were asked to leave your college. No exceptions. You can ask for forbearance to give you time to pay, but all that does is add a TON more money to what you owe.

Parents and students need to understand all the facts before they start down a college journey and understand how they are going to come up with MORE money each year than what you may have been asked to give freshman year. Some colleges increase 5% per year, a few have had as much as 10% increases. If you can’t comfortably figure out how to pay for all four years - don’t go to that school! I lived this nightmare and would not wish it on anyone.