Student Loans

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millerem's picture
millerem
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Joined: May 24 2009
Posts: 5
Student Loans

I'm new here, apologies if this has been discussed before, point me in the right direction if it has. I saw Chris speak via video-link yesterday at the Transition Towns Conference in London, and I'm a U.S. post-grad student currently studying in the UK. Thanks to continuing my education I'm also $75,000 in debt, which is scary on the best of days. I've just started watching the Crash Course and when Chris was talking about loans and money it made me wonder what would happen to my student loans if the dollar spiraled into inflation and our currency system essentially collapsed.

The future I hope for myself is to own a nice plot of land and live as self-sufficiently as possible, but I also know that my loan master promissory notes say that defaulting on those loans gives the government the right to repossess my property to help pay it back. I guess my main question is: if I default on my student loans because our currency is made essentially worthless through inflation, does the government have the right to repossess my property? I ask because I'm really hoping to invest my future earnings in more secure and tangible things like land and food and energy security, but if it can all be legitimately taken away in a currency crisis it's a bit self-negating. Any thoughts?

PlicketyCat's picture
PlicketyCat
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Joined: Feb 26 2009
Posts: 680
Re: Student Loans

"if I default on my student loans because our currency is made essentially worthless through inflation, does the government have the right to repossess my property?"

Short answer... YES. Uncle Sam is just about the only entity that can literally take everything you own, no matter what state you live in, as payment for debt. I think the gov will have no problem whatsoever foreclosing on people's government loans (which is what subsidized student loans are) or collection of tax penalties and then auctioning off their repo'd stuff in a desperate attempt to stay afloat. You can't bankrupt yourself out from under federal gov't loans and levies either... the minute you earn money or get property they'll be right there waiting for their piece of the pie. There could be a slim (microscopic) chance that debts will be forgiven or forgotten if the dollar and government completely collapses, but I certainly wouldn't put too much hope on that miracle. I wish you lots of luck getting and keeping employment that pays enough to get out from under that educational debt before things go "pop". You'd have better luck staying in the UK or emigrating to another country to set up your self-sustaining life... Uncle Sam can't repo property it doesn't have any jurisdiction over.

Will's picture
Will
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Joined: Oct 27 2008
Posts: 81
Re: Student Loans

 Welcome millerem.

I hate to break it to you, but you're best hope to get out of a $75K student loan debt and acquire a sustainable homestead any time soon in this economic landscape is the devil we call hyperinflation-- the worst nightmare for virtually everyone who is a member of this community.  

Inflation favors debtors and punishes savers, so hyperinflation is even better for folks who are deeply in debt.  If hyperinflation kicks in and assuming you're professional salary tracks with inflation and goes from $50k to $100K virtually overnight, you're debt would remain fixed at $75K and you would now have double the income to potentially apply toward the debt.  Isn't that great?  Yes, if you're in debt and have no savings.  Unfortunately, while you're happily and rapidly paying down your newly acquired student loan debt with those hyperinflated dollars, those of us who have worked HARD for decades and lived within our means and saved money responsibly would be WIPED OUT rapidly if we left all our $75K savings in dollars as the price of everything doubled overnight due to hyperilnflation. And the day that the mature generations get their life savings wiped out is the day that the torches and pitch forks show up in Washington and Wall Street to take it back.  You will be in the process of rapidly paying back that huge debt with inflated dollars when my generation revolts and plunders back at the bankers and politicians and plunges us all into some period of temporary chaos and anarchy.  Not a good option for you either, but you probably won't have to pay all the debt back because we burned Wall Street and Washington to the ground after we finished plundering it and we've officially liquidated them in a fire sale auction on EBay.

Student loan debt is one of the few debt types that can NOT be discharged via bankruptcy in the U.S., so if you default on a student loan  and have any hard assets like land, etc., you're going to lose them to Uncle Sugar. Period.  Oh, wait-- unless Uncle Sugar ceases to exist itself, which is your only other easy way out of student loan debt-- which would mean that you're now free of the debt but you've possibly lost your country and your personal liberty in the process...

As you can see, you're options are severely constrained from any easy or painless escape from the potential outcomes (much as the U.S government and financial system will soon re-learn and accept as self evident).  Time to suck it up and pay it off for how ever long it's going to take to hoe that row, because you're only other options are suicide, jail, or go on the run from the U.S. government for the rest of your life (or the government's life, depending who is the last man standing between the two...).

Welcome to the harsh reality of the choices we make in life.  I wish I had better news for you, but the future is looking immensely challenging for us all and there is simply no easy button to push that will disentangle us from this web that we wove.  We're all going to have to fight tooth and nail with all our wits and knowledge and experience to live even a modestly comfortable life in a world with an exploding population, dwindling resources, and a failing financial system.  Until the current financial system has failed completely and a new system is established in it's place, we've all got some tough rows to hoe in this field of bruised but not broken dreams...

One final thought of encouragement to you--  We have to play the hand we're dealt, so accept that this is your world and your life and make the best of it that you possibly can as you pay off your sizeable debt.  I promise you, there will still be enough joy and wonder and compassion and will within you and us to sustain all humanity beyond this current human crises.  The future may not look anything like our previous dreams, but I am confident that nothing short of total extinction of human kind could ever rob us of our enduring ability to laugh and celebrate life no matter how bad the overall situation or landscape.  There will simply be less parties for a while and more serious work to do.  But all that work can be celebrated if we choose to sing or whistle as we gratefully toil in the field of renewed but not broken dreams...

G'Night....   zzzzzzzzzzzzzzzzzz

 

millerem's picture
millerem
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Joined: May 24 2009
Posts: 5
Re: Student Loans

Well, sh*t. I have to admit I'm feeling pretty dismayed right now, and also incredibly duped. My whole generation was always told, go to college even if you have to take out loans, you'll be able to pay it back later no problem, it will be worth it in the end. I now wish desperately that I could have figured all of this out before I sold my soul to the banks in exchange for a fancy degree. These loans were supposed to be the smart thing to do, they would afford me a better life in the future, but now it just feels like a millstone around my neck.

I've landed between a rock and a hard place. If I work long hard hours at a job I hate to pay off my loans more quickly, I won't have the means or time to ensure that I'll have food and housing security before the bubble bursts, and if it bursts before I can accomplish that I'm in trouble. On the other hand, if I work a small job and put my resources and energy into growing food, building a house and preparing for an unstable future, if the government comes to collect on my outstanding loans and takes it all away I'm even worse off.

I guess my only hope is that I can pay off the loans before everything comes crashing down. This is an incredibly unfortunate time to be graduating from University, and despite all of my higher education I feel almost completely unprepared for the future that is likely to come. I had thought about emigrating, but trying to get a work visa now is expensive and ridiculously competitive, and it's hard to stomach the thought of possibly being separated from my family for good.

I hardly know what to think, this is very overwhelming. I had no idea things were so bad... I guess one small comfort is that I'm not alone in my predicament, with the rate of debt upon graduation is at it's highest ever. And there's always family and community to back me up, but this is still a scary prospect to be faced with. I guess it will just take a while to sink in.

Thanks for the replies, I am very thankful that I'm finding all of this out now and not years down the road. Better late than never, eh?

Erin

 

 

tx_floods's picture
tx_floods
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Posts: 155
Re: Student Loans
millerem wrote:

If I work long hard hours at a job I hate

Welcome to the real world! I'm reminded of a Drew Carey joke -

There's a support group for people who hate their jobs. They're called "Everybody" and they meet at the bar at 5:30.

millerem's picture
millerem
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Joined: May 24 2009
Posts: 5
Re: Student Loans

It's not so much that I would hate the job, and I'm not saying that I deserve better than anyone else. It's just a massive road block. I would gladly take on an awful job if it led somewhere practically useful (beyond paying back my loans, that is). It's that this job will, in all likelihood, prevent me from making the majority of practical preparations for life after peak oil and climate change. There just won't be enough hours in the day. Hopefully I can work through my loans fast enough to make it out the other side before the situation becomes dire.

JAG's picture
JAG
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Posts: 2492
Re: Student Loans
tx_floods wrote:

There's a support group for people who hate their jobs. They're called "Everybody" and they meet at the bar at 5:30.

Too Funny Floods

poisonivy113's picture
poisonivy113
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Posts: 81
Re: Student Loans

 Perhaps I can make you feel better. I have $250K in student loan debt, and recent major cutback in my hours at work. Oh, and no assets to sell to pay anything off. Wanna trade places?

PlicketyCat's picture
PlicketyCat
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Posts: 680
Re: Student Loans

I think a lot of (current and former) students are going to be caught in the loan backlash, just like the homeowners with mortgages... for the same reason, too. We all got duped into believing that you had to take on debt to acquire something that every American must have in order to be successful, but that it was OK because you could easily get out from under it in a few years.   LIARS -- the greedy little beggars!  But at least Uncle Sam can't take all my stuff if I default my mortgage, and neither can the bank (thank God, I didn't get a HUD subsidized loan!). Students have it much worse in that regard.

I know what you mean about getting immigration and work visas. My DH is from UK and was just finally granted US citizenship (we've been married for 5 years). We researched moving back to UK, or moving to Australia or New Zealand. OUCH!!  Seemed like he could get visas much easier as a UK citizen than I could as a US one... guess people don't want "Americans" immigrating to their country :(

KKPSTEIN's picture
KKPSTEIN
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Posts: 120
Re: Student Loans

Hi Millerem, I feel for you.  I just had a student say to me that they feel like they're wasting their time in School.  They have 2 yrs to go and are in a large amount of debt.  I have told them to take a look at the Crash Course.  Young people today do have a very unique situation ahead.  We can look at it like they have it worse than anyone in 4 generations has, or because they are armed with information, they have an opportunity to postition themselves and use their youth and energy to build amazing communities and thrive. 

Did you get a chance to look at the Gary Null's Stimulus plan in another thread?  Check out point # 14.

http://www.garynull.com/gnStimulusPlan.html#17

Best!

KKP

 

millerem's picture
millerem
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Joined: May 24 2009
Posts: 5
Re: Student Loans

Thanks for the stimulus link, KKP, I'll definitely take a look at that.

poisonivy113, I can't even imagine how I would feel if I had 3 times as many student loans, I'm worried enough already. I definitely empathize with you. I was wondering, how have you handled your situation/outlook in relation to all of this startling information in the crash course? I think it would be great to students/new grads/those with student debt to network on here and share ideas, problems, experiences and inspiration. We're definitely in a unique situation compared to the rest of the population, and the more knowledge that is shared the better. Do you know if there's already a thread dealing with student issues? Maybe we could start something...

Erin

jerrydon10's picture
jerrydon10
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Posts: 442
Re: Student Loans

I feel very sorry for our students in today's economy. It seems they are dam*ed if they do and dam*ed if they don't.

My stepdaughter is getting her education in advertising via student loans. It is her dream to move to Japan and work for Sony.

But it looks like there may not be any jobs for our graduates, much less at the bigger corporations that are in trouble such as Sony.

I read an article somewhere this morning that liberal arts degrees are virtually useless in the marketplace as of late.

I really don't know how to advise her. I'm not sure if student loans will be available next semester, if she will be able to pay them back or even if there will be any jobs available in her field. It's almost as if a person would better themselves to become a plumber or an electrician these days.

funkyspec's picture
funkyspec
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Posts: 19
Advice to give college students

I am helping a young woman with her college tuition. She has one more year to go to get her bachelor's (in an artsy field: Illustration). She has some of the standard US .gov loans, and I only offered to help after seeing some of the crazy terms from the private college loan companies. Now, after having seen the Crash Course last fall, I am not sure what to tell her. Should she stick it out for the last year or is that just another example of the Sunk Cost Fallacy?  She has one of those compelling feel-good Horatio Alger-type stories: born in a refugee camp in Thailand, emigrated to Hawaii with her mom, attended public schools, first in her family to go to college, hard-working kid who wants to get a job when she graduates so she can help her mom, etc. But she will probably end up with a Bachelor of Arts in Illustration and about $75K in debt like the OP. I feel bad because I gave her advice just like the OP received from the adults in her life: going to college is an investment in your future. Now what do I tell her?  

Mr. Fri's picture
Mr. Fri
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Posts: 220
Re: Advice to give college students

Millerem, all is not lost.  You never know how life will play out.  When I got married I helped pay off my wife's student loans with my income which was much more than hers.  I'm not saying you should look for a rich guy to marry but when you marry someone you then have a partner in life to share your burdens.  The proverb which says "Two are better than one because they have a good return for their labor" is true.  As partners in life you both can work toward your goals much faster than you could alone. The key is to find a partner who has the same life goals as you do.

mobius's picture
mobius
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Posts: 160
Re: Student Loans

Hello.  I'm new to the site and this is my first post.  I'm not kicking anyone after they have fallen down, but our consumptive lifestyle has even made the student life very cushy.

In 1998, I completed my B.A. in Latin American Studies without debt.  I had worked full-time previously to starting that programme and used all the cash to pay tuition and board/rent.  I had also lived a half year with my folks.  What I noticed when I was at Uni was that everyone seemed to be living without "Student Efficiency", that is supporting a lifestyle of a working someone. (vacations by airplane, lots of trips to the pub, nice clothes, etc.)

Tips then for those who are in school:

- try to finish your degree as fast as possible.  Take summer courses to reduce the time or study burden during the regular (Fall/Winter) semesters.

- go to a local university/college and live at home, but pay your parents room & board.  This has many benefits: -reduced board, time during travel (on public transport) will increase study hours and diminish the temptation to stay and party with the best of them.

- by second-hand books, study at the library and borrow books. 

- Always think what is the market value of my degree?  Do you have sale-able skills?  Or do you have a PhD in basket weaving?  You must be honest with yourself.  Is there an oversaturation of people in your field.  I was in sustainable development when European governments started to cut funding to NGO projects.  Not the best time to be in that field.

- Think of back-up work.  Can you teach? Can you work type of do data-entry?.  Be open to all opportunities and believe in yourself.

- Use your knowledge that you've acquired at UNI and apply it to your life.  I applied the lessons I learned in sustainable development and I must say that I'm glad that I did.  Learn to make a budget for the time that you're in school and learn to live with it.  It can be fun as well.  It does become "sport" to see if you can come under budget.

Good luck and take care, Joanne.

 

millerem's picture
millerem
Status: Member (Offline)
Joined: May 24 2009
Posts: 5
Re: Student Loans

I do hope that I can find someone in the future to help share my burdens. Regardless of monetary issues, it's just nice to have someone pulling for you no matter what; that would be a huge comfort in a very uncertain future. But, I'm not going to put all of my eggs in one basket, and I'm going to work my hardest as an individual to be prepared regardless.

Myself, and most other students, have certainly had a very cushy life. The most common advice was to take out loans and focus on your study, to not get distracted and stressed by a full-time job. But I can't change the past 5 years, all I have to work with now is my last 4 months as a student, and I'm certainly going to be budgeting my time and money more appropriately now, and getting as many hours at my job as possible. If it were 12 months ago, I would seriously reconsider pursuing an MA because of the resources it demands, but now that I'm so close to the finishing and burdened with loans regardless of whether I finish or not, I figure I might as well see it through to the end.

Funkyspec, I would never call education a complete waste. Enriching ourselves with knowledge is always a good thing, but I'm realizing now that we are coming to a point where we'll have to weigh the practical benefits certain knowledge brings versus the exorbitant cost of education today. It's a hard call with the girl your helping; since she only has a year left, it may be worth it to see it through to the end because we really don't know what the future will hold and maybe degrees will still be of some value, but you also have to consider the monetary cost. If one more year of study is going to add 25% to her loans, that requires more serious consideration. I find myself wishing, after a very fulfilling but ultimately not very practical liberal arts degree, that I had dome something more basic and useful like horticulture or herbal healing - something that will still be useful as we see the de-specialization of society in the future. I can't say one way or the other what advice you should give to this girl. In the end it is up to her, but you can make sure that she has all of the information she needs to make an informed decision.

Erin

mobius's picture
mobius
Status: Silver Member (Offline)
Joined: May 18 2009
Posts: 160
Re: Student Loans

Erin, but I do agree with you that we were all fed a dream that a higer education would guarantee a better job and future financial security.  Come to think of it, they said that about other things too, didn't they...

knemoto's picture
knemoto
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Joined: Nov 2 2008
Posts: 12
Re: Student Loans

A close friend of mine told me that his employer received a letter from a collections agency and was told that they requested an automatic deduction from my friend's paycheck every month to pay off his student loans.

Whats really ridiculous about this situation is that if my friend's employer does not comply... they could get fined $$$ for not cooperating. And all of this is legal. So my friend now has $200 less per month to work with to survive.

What makes me even more sick about this is that my friend is a at-risk youth counselor who is just trying to make a living and do something positive for the community.

I'm sorry to vent and offer no solutions. I have been telling all my friends to pay off their debts or else things will start popping up from left field.

Good luck with those student loans! Atleast you have an education.

- Kenta

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