Student Loans…part I

Let’s talk about student loans. The amount of student loans taken out last year crossed the $100-billion mark for the first time, and total loans outstanding will exceed $1 trillion for the first time this year.

As most folks will attest the biggest debtors are doctors, dentists, and lawyers that are the most delinquent on paying back their student loans. When asking doctors for example why they’re hesitant to pay back their loans the response is almost canned: “Are you kidding me, the cost of attending medical school alone was preposterous; then upon graduation to try to build a practice is nearly impossible. People just don’t understand that x-ray machines, blood work, and various scans cost money. Who puts up the money?”

A Sidebar please: With all of the press considering granting illegal aliens in-state tuition as well as being able to apply and receive grants, loans, and whatever else it is clear that the government or the liberal politicians that represent it is not concerned about the default status of the loans.

Ladies and gentlemen what we are addressing is the notion of an entire government that has lowered the bar for acceptable standards. What on earth do we say to children who want to procure student loans when we have banks swirling down the toilet on debts of trillions of dollars in the mortgage industry? Look at Bank of America which we believe should be compelled to change its name.

Look at J.P. Morgan, Chase, Citi Corp, AGI, Goldman, Sachs and Co, Merrill Lynch, Lehman Bros., and Bear Stearns, and then we ask that you look at our own federal government who is borrowing at a rate that is insane; moreover, and far more important, can’t get its own citizenry to gain enough confidence in it so therefore a let’s go from Triple A to Double A rating.

Sure this may be cause for concern; however, when one has a government that throws $535 million at an obviously defunct company where is the motivation to pay these loans back.

For certain we don’t know of any people within undergraduate universities that upon receiving a loan instantly consider not paying it back.

Has anyone actually thought of why the credit card debt is so high, especially among college students? From the folks that we help financially to cope with the costs of education they are literally caught in a very vicious circle! By the time a loan check is received (normally between the week before school starts or the week after school begins) younger students are in a tizzy. It certainly appears to us that the nervous anxiety they go through wondering if they’ll be attending school or not is a great cause for concern.

As long as the government continues with stimulus packages, bailouts, buy outs, or just plain whatever was done with Freddie Mac and Fanny Mae is enough to justify to any student that maybe the government can wait a little longer.

Full-time undergraduate students borrowed an average $4,963 on credit cards in 2010, up 63% from a decade earlier after adjusting for inflation. And down the road, of course, those bills will have to be paid. From the folks we assist and monitor much of this debt is spent on living expenses and believe it or not, books and supplies for classes.