Dear Steve,
I'm a graphic designer that graduated in 05 with a bachelor of science in graphic design from none other then the Art Institute of Ft. Lauderdale. I just read an article about paying back Sallie Mae loans and felt it was really enlightening, but bankruptcy?
It seems that there are hundreds of thousands of people with the same exact issue as this women and like so many others, can't pay back the loans due to poor paying jobs.
These companies do not offer flexible payment options! We go to school to improve our skills and "make something better" for ourselves, only to be left with debt we cannot afford to pay back with the risk of having garnished wages. It took 10 or so years to finally make it to a place where I can start to pay back my loans.
My question is...can we file a class action law suit? Can we do something other then taking the hit entirely? For that women to have to have claimed bankruptcy because Sallie Mae was UNWILLING to work with her, as they are with me is absurd.
Boh
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Dear Boh,
I hear what you are saying about the situation being ridiculous. I agree it is totally screwed up. People went for higher education to better their futures only to find themselves drowning in student loans.
Can you file a class action suit, sure. This is America where you can sue anyone for anything, at anytime. But you'd have to find a lawyer or firm who was willing to take this on and spend tens or hundreds of thousands of dollars probably to try and create a good outcome.
Frankly, I think you and others would be far better off persuading legislators to change the law and require private student loan lenders to offer reasonable and affordable repayment plans.
Private lenders will fight this. They will lobby hard. They will say they are a for-profit business who entered into a legal contract to lend money under specific terms. And they will be right. That is exactly what they did.
So the issues are really bigger than just the lender. In fact if you take a step back from the lender it could be argued the school is just as much a problem in this since they help to arrange a lot of student financing through their financial aid office. The school is aware of the income potential of the various degrees but when did you ever hear of a school advising someone that a graphic arts degree from an expensive for-profit school paid for with private student loans was not going to make financial sense.
All of this problem can't land on the lender or school alone. And then of course you have the issue of the student doing or not doing research before signing on the line to discover what the field was going to pay after graduation if a job could be landed.
We need to somehow get past the assumption that all education is good and instead look at the cost versus benefit of the education. For example, a question many or most students never ask is what percentage of students that enroll actually complete the degree and land a full time job in the field. The numbers are lower that you would imagine.
The majority of people who owe student loans never graduated, never got the degree, and never got the full benefit.
So without any other great options available we need to look at what solutions are available and my opinion is the best place to look for binding solutions for private student loans is the law.
I'm surprised by the amount of private student loans some people have that were used for other than "qualified higher education expenses". So a good place to start to get those loans reduced would be to talk to a bankruptcy attorney since the balance of the loan above the cost of school may be easily dischargeable. See this article for details.
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