Many of my clients are having problems paying their student loans. And for good reason – the proliferation of so called “schools” have dotted the landscape. If you are home during the day nearly every TV commercial is from some for profit school trying to earn government financial aid money AT YOUR EXPENSE. Most of these schools eat up your financial aid money and leave you with an “education” that can barely get you a job and saddled with student loan debt. Just because the name has school in the title does not mean it is serving your best interest.
So what happens when you graduate and it is time to start paying those loans? It becomes a nightmare. Student loans collection companies have extraordinary garnishment ability bypassing having to go through court to sue you. They can and often intercept your tax refund check for non-payment. It becomes very difficult for many people.
There is a new proposed law that is aimed to help make repayment more affordable for graduates. But guess what? The Senate voted last week to block the bill from moving forward. President Obama has initiated an Executive Action over this crisis. He is opening up the IBR program to more borrowers. This program uses only the borrower’s income to determine a monthly payment. I tell clients to check out the Income Based Repayment program (or IBR program – click here:
Until the government makes meaningful changes to the student loan nightmare, it will continue to be business as usual. And what are those dramatic changes? It is time to make private student loans dischargeable in bankruptcy, the way it was before 2005.
The best thing for new students to enroll in a reputable community college (i.e. Valencia, Seminole, etc.) and then enroll at UCF. You will be better off than going to a “school” that advertises all day catering to the young and uneducated with promises of a medical or computer career. Beware. If you enroll, they are excited about getting their hands on your financial aid money. You may not even know how much it will cost you but you will soon find out in the future.