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Chris LoCurto

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November 4, 2011

More On Student Loan Forgiveness

November 4, 2011 | By | 43 Comments">43 Comments

I … am getting upset … at ignorant people! Why? Because I keep hearing all of the talk from folks wanting the government to pay for their student loans. Listen everyone. The government doesn’t have any money other than what those who ACTUALLY pay taxes give it.

There is no secret presidential bank account with your student loan/mortgage/credit card debt earmarked for payment. And no, big business doesn’t need to pay for your debt either. Why? YOU made the decision to go into debt. Nobody forced you to take out loans.

In fact, I was talking with Brandon Brison, one of our editors here. He said that when he went to college, his student loan papers had a bolded section that said essentially, THIS IS A DEBT. YOU WILL HAVE TO PAY THIS DEBT BACK. YOU WILL NOT BE ABLE TO CANCEL OR FORFEIT THIS DEBT. YOU MUST SIGN THAT YOU REALIZE YOU ARE TAKING ON THIS DEBT.

Sounds pretty clear to me. And yet on a popular Facebook site, I read through tons of comments from people saying how mad they are that they have to …wait for it … pay their loans!! Response after response, they are complaining how unfair it is to have to pay back loans that they took out for an education that most of them never went into that field.

Someone please explain to me how I should be able to make a poor financial decision, and then pass that bad decision on to someone else. Here’s a thought: Work your way through college. Most of the student loan amounts that are posted on the site could have been paid as they went by working at Starbucks.

Or here’s another option: Work and save up the money before you go to school. You don’t have to jump right into college after high school if you can’t afford it. And don’t tell me there’s not work out there. I had a lady from North Dakota come through my last EntreLeadership class who is paying her waitresses/waiters $15 an hour and can’t get enough workers. That’s 30K a year!

That doesn’t include all of the work that’s going on with the natural gas rigs in that area. These companies are paying people 80K a year. “That’s great Chris, but that’s ND!” So? Move! Consider it a tour-of-work duty. (Sorry, I think I just made that up.) Don’t like that option? Enlist in the military. Last time I checked, they were still paying for college.

The point I’m making here is that you don’t have to make bad financial decisions when it comes to student loans, mortgages or credit cards. It’s something you choose to do. And if you select it, then take the responsibility that comes with it. Don’t try to pass it off on me.

Question: Ha-ha … thoughts?

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  • http://specializingintheimpossible.wordpress.com/ Laura Johnson

    Yeah, people who make financial decisions and then expect others to pay for it drive me nuts!
    When I went to college, I paid for my first year with all the money I had saved up since getting an allowance, and from my first jobs. After that I worked part time during the school year and two jobs in the summer (65-70 hour work weeks).
    Funny story: someone my husband knew in college dropped out after seven years attending because he discovered he’d have to pay his student loans back.
    Though I came across someone with an even stranger viewpoint (in my opinion) a couple years back. A cattle farmer told me since the government taxed for each head of cattle he had, teachers should have to pay taxes every year for the education they got. What!?

    • http://www.ChrisLoCurto.com Chris LoCurto

      Hahaha…what?!?! Dork.

  • http://www.medicalaccountsolutions.com Misty Gilbert

    Thoughts? Don’t go to college. I didn’t and yes, I make more than $30K a year! I actually graduated at 15 and started as a file clerk at a dermatologist office. I worked, worked, and worked up way up the ladder and now am the president of a Medical Billing & Consulting Company for 7.5yrs with two employees. We are a small company, but we love what we do! I don’t regret not having college and yes I get looked down on for it, only makes me work harder!

    • http://www.ChrisLoCurto.com Chris LoCurto

      Haha…and the people looking down on you make way less money, don’t they?!

  • Sophie Kinsella

    Hello,

    This is Sophie Kinsella. I’m a regular financial blogger with some renowned sites and communities.I was just going through some finance related sites and blogs and came across your site (chrislocurto.com). I really found it interesting and informative. I write articles on various topics of Finances. I really liked the way you have presented your site. I would love to do a “Guest Post” for your site like I did for other sites without charging you a penny. I believe this will be of interest to your readers.

    The article will be unique and will be written only for your site. If you’re interested in this idea, please get back to me.

    Looking forward for your reply.


    Thanks & Regards
    Sophie Kinsella

    • Chris LoCurto

      Great idea. Shoot it to me and I’ll look it over.

  • http://bridgesburning.wordpress.com Chris King

    I am old enough to remember a time when students worked their way through college and university..future doctors worked in factories…my niece held 3 jobs through university and teacher’s college and graduated with NO school debts.

  • http://daveramsey.com Scott

    Concerning college, as a tax payer, the only taxes I would be happy giving the government would be for the purpose of providing every high school graduate with a copy of Debt Free U.

    And now I have to go write a reminder to myself to include a copy of that book with graduation gifts.

  • http://twitter.com/ibnabeeomar ibn abee omar (@ibnabeeomar)

    loved this article

    • http://clocurto.wordpress.com Chris LoCurto

      Thanks Omar!

      • holly

        I got myself into some serious credit card debt and I never expected anyone to help me out. It was one of the best and worst things that ever happened to me but it taught me a lot about personal responsibility. My mistakes are my own and I cant expect anyone else to fix them but me!

        • http://clocurto.wordpress.com Chris LoCurto

          If only all people felt the same. :-)

  • http://ginasmom.wordpress.com ginasmom

    I sympathize with all those that have to pay back the high interest student loans, but paying the loans back should be a no brainer, you borrow you pay it….nice and simple.

    With the economy going the way it is, its a high time young people and their parents received more education/information before they sign up for loans. The education should not be left to institutions lending out money, but independent bodies. I have walked a couple of my friends through the whole strange process of getting through college without loans (I did), and the surprising thing is their reaction, when they realise taking on debt is not the only option.

    Before borrowing any money for those thinking about it, read the book Debt free U By Zac B. I have a review of this my site. http://ginasmom.com/2011/10/07/can-your-kids-attend-college-without-loans-a-review-of-debt-free-u/ you’ll never look at this debt the same way again. If it’s too late and you’ve borrowed the money and you can’t give it back (hopefully that’s still an option:)), get your head down and get to work to pay it off, and make promise to never borrow money again.

    • http://clocurto.wordpress.com Chris LoCurto

      Amen

  • http://www.cabinart.net Jana Botkin

    That mentality of “rules are for other people” may have its roots in the self-esteem wave that washed over students in the last 10 or 20 years. Just speculating here: if I am special and deserve a ribbon just for participating in something, aren’t I special and deserve a pass on paying my loans because I went to college?

    Any opinions on this?

    • http://clocurto.wordpress.com Chris LoCurto

      You may be on to something.

  • http://joelfortner.wordpress.com Joel Fortner

    Jennifer, it sounds like you’re trying hard. You can’t turn back the clock and you are where you are. I would suggest though you stop investing right now and attack your remaining debt. I know investing seems like the best thing to do but your debt is acting as an anchor you should direct all available money to eliminate it. This will put you in a much better place financially and spiritually to then attack investing and saving for a college fund. Fire off questions if you have any.

    • Jennifer

      Joel – I completely agree, and I’m no longer putting money into investments for that exact reason – that was all prior to graduate school, which I didn’t plan on going to until about 3 months before I was accepted; it was an unexpected blessing. As soon as I knew I was going to be heading back to school, I stopped investing and starting saving. Now, I am making the minimum payments on my low interest student loans and paying any extra money I have towards my high interest debt so that it gets paid off as soon as possible. I have been working with a financial adviser for 6 years who has been on board with all of the financial choices we have made. I appreciate your level-headed response – thank you for that. I am most definitely in a good place financially and spiritually – I actually now make plenty of money and can afford to pay my loans, mortgage, bills, etc. I guess for me it comes down to the fact that school is simply getting more and more expensive to attend, both with tuition and loan interest rates, and most students (Tom B from above excluded) can’t afford to pay cash for their education. Yes, I signed the forms that said my loans were going to be at a 8.6% interest rate. If I had a different option of where to get my loan money for cheaper, I would’ve taken it in a heartbeat. But, as Chris so eloquently mentioned, I made the choice to take out the loans. I can make the payments, but that doesn’t mean that I sure wouldn’t love for them to go a little more toward principle and a little less toward interest. Here’s a selfish idea; maybe remove the income cap for deducting student loan interest? That would at least be a small reprieve for me, but is essentially the opposite problem that college grads without gainful employment are facing.

      Chris, I have never read your blog before and just happened to come across it today, but you seem awfully angry. I simply responded to your blog with an opinion, and your response to my post had very little to do with what I actually said. I am not suggesting you go “back” into debt for any reason, or asking or expecting you to pay for any of my loans. I don’t need you to pretend to be sorry that I have a high interest rate, either; I simply wanted to introduce a decrease in high interest rates for student loans into your public discussion as a possible alternative for students struggling to make their payments. I also find it interesting that you refer to this student loan debt as “stupid.” I most certainly do not think I made a “bad decision” when I took out loans to go back to school and further educate myself, and I would even go so far as to say that student loan debt is the least “stupid” debt I could possibly have acquired in my twenties.

      I’ve learned my lesson responding to your blog post; while your reader Joel was quite diplomatic and constructive in his response to my post, yours was defensive, less than applicable, and hastily written. I won’t be reading your blog or responding again; my apologies for intruding on your one-sided rant.

      • http://clocurto.wordpress.com Chris LoCurto

        Jennifer,

        No anger here towards you at all. I’m sorry you misunderstood that. You made an assessment that the commenters before you believe students just party and get drunk. Nobody was saying that at all.

        As to the loans, I’m really sorry if I came off mad. You were only talking about your interest rate, and I mistakenly assigned your response to people wanting their debt covered.

        You are right that my response to your comment was inappropriate. Please forgive me.

  • Jennifer

    The previous posts make it sound like every former college student struggling with their loan debt went to the most expensive school they could find, partied all their free time away, then sat around after school waiting for a high paying job to hit them in the face. I, for one, was not this person, nor were the majority of my classmates and friends. We all made smart decisions, and continue to make smart decisions as adults working in our chosen field contributing to society, yet what we are troubled by is the interest rates we are paying on said student loans.

    I don’t need anyone to pay my student loans for me…. but it sure would be nice to have an interest rate reduction. My graduate school loans are 8.6%!!! My undergrad loans, at about a 3% interest rate, are darn near paid off, several years early, after making all of my payments on time and paying more than the minimum – and yes, I worked close to full time during school and maintained full time employment from the day I graduated college until the day I started graduate school three years later. My graduate program actually REQUIRED that we didn’t work during school (and rightfully so, it was a very rigorous program that I put 60-70 hours per week into)… so not taking out student loans wasn’t an option. Why didn’t I save up $60k in that three years to pay for school and my living expenses, you may ask? Because I was being responsible and paying off my undergrad loans, never once carrying a credit card balance or car loan, contributing to my 401k up to my employer match, investing in a Roth IRA, and putting a small amount each month into a COLLEGE FUND for my as-of-yet-unborn child(ren) so that hopefully they won’t be in as much debt as I am. Again, I am perfectly capable of paying off my loans and take full responsibility to do so, but the interest rate is outrageous. My mortgage is 4.5%, half of what I am paying for student loans. I realize that student loans are “unsecured” but this is excessive! Guess where that money would be going if I weren’t paying it in interest? Back into the economy….

    • http://clocurto.wordpress.com Chris LoCurto

      Nobody is commenting on people partying, thy ate commenting on people taking out loans that they couldn’t afford. If you can’t pay for it, don’t do it and then expect me to pay for it. I’m sorry for your high interest rate, but that was the choice YOU made. I paid off all of the stupid debt I got into, and won’t go back. I didn’t ask to pass my bad decision on to those paying taxes.

  • Dave

    Amen Brother!

  • http://ericspeir.com/ Eric Speir

    Thanks Chris! It all goes back to taking responsibility for your life. We live in a society of entitlement. For some reason we want everything to be fair and everyone is entitled to the same thing. It frustrates me to no end to hear stories like this. People want what everyone else has but is not willing to work to get it. Keep preaching!

    • http://gravatar.com/lgthaxton Louise Thaxton

      You said it, Eric! It is all about TAKING RESPONSIBILITY for your life, your success, or LACK of success!

  • http://twitter.com/DrCabler Dr. Jason Cabler (@DrCabler)

    AMEN BRUTHA’!!! First of all, the changes that Obama made to the student loan program are minimal at best.

    Second, people have to learn to change their mindset. Debt for an education is not the answer. Americans have gotten way too comfortable with the idea that life has to be financed. Debt is a LIE!!! We have to keep spreading the truth and convince people to return to the common sense of a cash based lifestyle.

    When you have student loan debt you begin life in a hole that you have to dig out of. You are at an immediate disadvantage and your options are limited by that debt bondage.

    Maybe you can’t take the job you’re really passionate about because you have to take a higher paying one you hate to pay off the loans. Or maybe you delay marrying the love of your life because you can’t afford it. Maybe you delay or don’t have kids because the debt load is just too much.

    Students CAN go to school debt free and not have to deal with all this nonsense. It just takes hard work and a different mindset than all of the “normal” people willing to mortgage their future.

    I recently wrote a couple of blog posts about all this:

    “Obama, Student Loans, and You” http://www.cfinancialfreedom.com/CFFwordpress/?p=675

    “Occupy Wall Street- This Gets It” A letter written by a student to the OWS protestors about his hard work to achieve a debt free education
    http://www.cfinancialfreedom.com/CFFwordpress/?p=572

  • Chris Johnston

    I agree with the only money the government has is ours. And there are a number of ways to look at that. Some more strident than others. But with that being stated, what I have found is:

    Even though there is a notice on it is required to be paid back, we’ve developed a mentality of the rules don’t apply to me. But it just doesn’t apply to student loans. It ranges from speed limits to I don’t have to pay back my mortgage, taxes or other rules that have been set in place. Does it really matter what the rule is if you ignore it because you believe it doesn’t apply to you? Not only do little eyes and minds see and hear it, many adults follow the leader. The rules don’t apply to me mentality sadly even prevails in our churches. How often have you heard someone who has fallen away say “So? I’ve got grace.” Amazing how often I’ve heard that in God’s house and from God’s followers. Bottom line, there’s a horrible epidemic of the rules don’t apply to me.

    I hear a number of people complain about bailouts or programs like the above. From bail outs for Wall Street to homes to student loans. But if you listen closely, their complaint are really less about the bailouts happening and more about they don’t or couldn’t get one. “The rich get bailed out. The poor get bailed out. I can’t get a bailout. Why do they get one and the middle class can’t.”

    Okay. Off soapbox.

    • http://Chrislocurto.com Chris LoCurto

      LOVE IT!!!

  • http://twitter.com/tbric Tom Brichacek (@tbric)

    Man, I would have loved to have someone else pay my student loans. Oh wait, I didn’t have any! I worked 2 jobs all thru college and had money left over. (I was even investing in my mutual funds throughout)

    My wife and I paid off her student loans 2 months after she was done with school. She also worked thru college and has a job.

    As far as no jobs, I have had 2 job offers this week, and I’m not even looking! I also have 2 other standing offers if I ever decide I don’t want to be running my own business. Don’t go to school for liberal arts and complain you can’t find a job. Find what the market wants in an employee and go get that degree!

    My wife and I paid off her student loans 2 months after she was done with school. She also worked thru college.

    • http://clocurto.wordpress.com Chris LoCurto

      Hahaha…you rock Tom!!!

  • http://joelfortner.wordpress.com Joel Fortner

    I think the main message in today’s post is right on as it attempts to explain what loan forgiveness is all about. It’s not forgiveness at all, it’s letting a person off their chosen hook, while taxpayers pick up the tab. The president, as well-intentioned as he may be, is making a misguided decision by blaming the cost of college and lack of jobs as the reason gradudates are suffering financially. He’s not serving people well by reinforcing shirking responsibility.

    • http://Chrislocurto.com Chris LoCurto

      Right on right on!

    • http://ericspeir.com/ Eric Speir

      You are right Joel. We are teaching people to shirk responsibility for their lives. This mess started with all the bailouts of the big banks and mortgages. The banks shouldn’t been bailed out and the people shouldn’t taken out mortgages that they couldn’t afford! Again, it goes back to taking responsibility for your life.

      • http://joelfortner.wordpress.com Joel Fortner

        Agreed. It’s a shame that some people just default to blaming someone else. It’s easier that way. In my view, it’s a sign of a bigger problem going on inside people and that’s why we have a responsibility to communicate messages of responsibility, hope and taking control on your life.

  • http://benny@branchcontractors.com Benny Nixon

    Chris,
    I absolutely agree with you on this. People need to accept PERSONAL responsibility for their actions. If you don’t save for college and pay as you go, YOU are the one that decided to go into debt with a student loan. And YOU should be the one to work hard to pay it back.

    Chris, as you know, we have been activley looking to make several hires and have yet to find hard-working people. There ARE jobs.

    Keep up the great work with your blog, and win that race this weekend!
    Benny

  • Todd

    I agree 100% Chris. Evidently they didn’t use the money for their education!

    • http://Chrislocurto.com Chris LoCurto

      True dat!

      • http://twitter.com/mahez007 Uma Maheswaran S (@mahez007)

        It happens in India too. There are many chemical engineers working in banks as clerks .

        • http://Chrislocurto.com Chris LoCurto

          Wow!

  • http://twitter.com/mahez007 Uma Maheswaran S (@mahez007)

    I feel that the current issue of economic uncertainty is quite complex and is efficient at adding salt to the injury. A student might have taken loans hoping for bright prospects in the future market. But, when he completes his studies to enter the job market (in current context), he could find it difficult to land in an appropriate job. In an era of high unemployment and stagnant wages, the new graduates get stuck and this naturally leads to a situation where student loan defaults reach their highest level in more than a decade. In all probability, the ballooning student debt load can have a negative effect on the economy in the long term. (Even the professor emeritus of political economy at Evergreen State University Alan Nasser has quipped that ‘the American dream is about to become the American nightmare.’).

    While some argue that Congress is circumvented to push an ill-conceived plan of student debt forgiveness, others contend that it is a better option to pull students out of debt bondage.

    With the job market as tough as it is today, it is good to see that someone has students’ best interests in mind. In a sense, this could be an important step in making it easier for more Americans to get their college degrees, and ease the stress about how to repay their student loans. But, we should also understand that college may not be the cup of tea for everyone and individuals certainly must bear the responsibility of the decisions they make.

    The communities and the society at large could provide transparent, complete, and honest information before the loans are disbursed, rather than selling our young kids on six-digit loans. If this situation is not handled meticulously, the problem at the end of the day is going to remain far greater than any attempts to address it.

    • http://Chrislocurto.com Chris LoCurto

      Besides the fact that only 74% don’t actually go into the field they studied for? :-)

  • John

    Chris,
    I love it, I wish I could watch people as they read this. Especially those wanting those loans paid for by us. Hey I’m at counselor training are you in Nashville

  • Anonymous

    Amen!