I just watched a video clip of Suze Orman talking about student loans. She and I don’t always see eye to eye (this video was the first time I’d heard her mention bankruptcy at all), but this time I can only say “Amen Suze!”
We have a daughter heading to graduate school, so the cost of education is not abstract for me. I want my daughter to have the best education possible, but not at the cost of her financial future. As a bankruptcy attorney, I see too many cases where my clients are struggling financially, not because of a house or car payment or even credit cards or medical bills, but because of student loan debt. It breaks my heart, because as Suze points out, in 99.9999% of cases, there is absolutely nothing I can do to eliminate those debts. She’s wrong that student loans are the only debt that is almost never dischargeable–child support, restitution and fraud are other examples that spring immediately to mind, but it’s the most heart-breaking.
I’ve seen bankruptcy clients who have their degrees, but can’t find a job in their field. I’ve seen ones who dropped out, but not before they had tens of thousands in student loan debt. I’ve seen ones who had to stop school for medical reasons and to take care of family members. I’ve seen clients taken in by the promises of high pressure sales pitches for non-accredited institutions offering “certificates” and “degrees” of questionable value. These institutions operate at a profit, but I view them as little more than student loan factories. Very little useful learning happens there. In most cases, there is little I can do to relieve the pressure these student loans cause my clients, except to discharge their other debt and wish them luck. Nothing in my practice frustrates me more.
What can you do to avoid falling into the student loan trap or to have your children land there? My chief recommendation is to study close to home. If possible, students should live with their parents and go to school locally. The local universities may not have the “prestige” of more expensive schools, but in this economy student loan debt is a certainty while the hope of a higher paying job is not. In the Greater Cincinnati area, the University of Cincinnati, Cincinnati State, Northern Kentucky University and Gateway Community College are excellent public institutions. Most urban communities will have similar colleges that provide maximum education and minimum debt. I wish there were more I could offer, but Suze sums it all up pretty well and the only real solution to student loan debt is to avoid the problem.