Explaining what having student loans is like to someone without student debt is tricky. Student loans are not just another bill, they cause a special breed of frustration that car loans, credit card debt, and mortgage payments can’t compare to.
Why do student loans suck?
The student loan bills are not going anywhere any time soon. The average college grad has 27k in debt, many have much more. For most, credit cards don’t even compare in terms of total debt. For those with a big home or auto payment, they can get out by selling that home or auto.
Even if you are deep underwater on your credit cards, mortgage, or car payment, you still have the possibility of bankruptcy. Bankruptcy isn’t eactly easy street, but it is a free start. If you have student loans, bankruptcy is a long shot at best. Most other debt can and will go away eventually, but student loans have a very frustrating staying power.
You were told that they were a good idea. Most parents want and encourage their kids to go off to college. High schools are judged by their “college placement” statistics. Politicians will tell you that education is the golden ticket to the American Dream. Let’s not forget the millions colleges spend recruiting students each year. To this day the myth that student loans are good debt persists.
Student loan borrowers feel duped. The big banks and lenders are making a fortune on student loans. Colleges, especially the for-profit variety, are bringing in boatloads of money. Much of this money is spent in Washington to make sure that the laws are written in favor of the banks and colleges, so politicians can build their campaign war chests. Everybody is getting rich except for the students. They get the bills.
Student debt was acquired with the best of intentions. The vast majority of college students go off to school with intentions of bettering themselves and finding their place in society. Of the many decisions you grow to regret, college isn’t one that most people ever thought would go down as a mistake. If you buy a car you can’t afford, you can look back and say, “Yup. I should have known better.” If you run up credit card debt that you can’t afford, its your fault, its not like you weren’t warned about the dangers of credit card debt. College is different. Sure it is really expensive, but most people didn’t receive warnings about how it could be money poorly spent. “I should have known better” just doesn’t seem to apply to student loans.
Many borrowers really were the victim of fraud. Take a look at this recent complaint filed by the consumer protection bureau. People who borrowed money to go to many schools were flat out lied to. False promises, inflated job statistics, and regret are common themes for many students. Not only do they have to live with the fact that they were taken advantage of, they get a monthly reminder in the form of a student loan bill.