Here's your degree -- and a lawsuit

Some universities are suing students who can't or won't repay their school loans.

By Bruce Kennedy Feb 6, 2013 9:28AM
Image: Graduation cap (Stephen Wisbauer/Getty Images)Compared with earlier generations,  current college students face a very different world once they enter the workforce. Unemployment remains high, entry-level jobs are scarce, and many available jobs require skills that simply did not exist 20 and even 10 years ago.

Recent graduates are also having more trouble paying off their college loans, and many are being threatened with legal action from their alma maters for nonpayment of tuition and other bills.

The University of Pennsylvania filed six lawsuits against former students in November, demanding repayments from $13,000 to $27,000. A university spokeswoman told the Daily Pennsylvanian that students who graduate or leave the university with an outstanding balance will see their debt transferred to the school's collections office. Past-due balances, she said, are subject to a late-payment penalty of 1.5% per month.

And universities have other unique ways of pressuring students who can't or won't pay their bills. Kenya Shujaa, a former graduate student at Penn, faced a lawsuit and also saw the university withhold access to her transcript, which she said "limited the kinds of jobs that I could have." But Shujaa, who settled her debts last year, says she understands the university's actions. "That's the rule when you owe them money," she said.

Students who borrowed funds for college and earned bachelor's degrees in 2011 left school with an average of $26,600 in student loan debt, up 5% from 2010, according to a recent report by the Project on Student Debt, by The Institute for College Access and Success.

Last year, the Department of Education reported a 13.4% national student loan default rate -- with for-profit institutions having the highest average three-year default rate of 22.7%, public institutions at 11% and private, nonprofit schools at 7.5%.

"We continue to be concerned about default rates and want to ensure that all borrowers have the tools to manage their debt," U.S. Secretary of Education Arne Duncan said in a press release. "In addition to helping borrowers, we will also hold schools accountable for ensuring their students are not saddled with unmanageable student loan debt."

Not surprisingly, educators say getting a college degree increases a student's chances of finding a job that pays well. But some also stress that both students and parents need to educate themselves about the loan process.

"Students and parents need to know that, even at similar looking schools, debt levels can be wildly different," said Lauren Asher, the president of The Institute for College Access and Success. "And if they do need to borrow to get through school, federal student loans, with options like income-based repayment, are the safest way to go."

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Tags: Economy
142Comments
Feb 6, 2013 11:39PM
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FIrst to KZ...Actually, I meant to type Beginning..So I screwed that up worse than you thought. But, I always seem to forget about the "grammar police" who just wait for someone to make a mistake. My advanced Degree was in Mathematics......But still no excuse for poor spelling.

To Someone: What...?? LOL

To A.C.T. Yeah...I'm pretty sure, my Grandfather never anticipated I would be living in a third world Country. And so far, We still got "stuff" like running water, sewer and electricity in the United States.


Feb 6, 2013 9:47PM
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Before you committ to any college for a degree, go out in the workplace and find out your chances of getting a decent job.   This idea of going to school to improve your life's view and such is nonsense.   Unless you are already rich forget it.    Go to school to learn a profession.    Make sure the one you choose comes with a job at the end.   

Feb 6, 2013 7:52PM
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It's about time. Even Dr's and other professionals are stiffing the colleges and the government on what they borrowed to get their degree. It took me ten years to pay off my loans but then I have a conscience.
Feb 6, 2013 7:32PM
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Question here is, why do so many educators and even parents (especially those parents who can't afford to pay their childs tuition themselves) push kids to college.

 

The job market is terrible. Even with a great education good jobs are few and far between. Most kids I know just go to college with no particular ideas in the courses they should pursue to be productive after graduation. Those who do have an idea still leave college with little chances in this economy, unless of course their studies are in medicine or like fields.

 

These kids end up deep in debt with little hope of even surviving on their own let alone have the ability to pay back these loans. It's us the taxpayers who take the brunt of the cost of unpaid loans and grants paid to students who either don't complete school or fail to find employment in their course of study.

 

It seems to me a lot of kids go to school just to put off work for four years or need to be the boss when they leave school.

 

I know a lot of them that would benefit from military service rather than school. They could actually earn the money for their degree before even going to school. The few years more in maturity they have after their service to this country could help them to decisively determine their course of study. 

Feb 6, 2013 6:51PM
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Let's face it, college is now a business. The cost of both books and tuition is beyond absurd. Even if you don't default and go to a relatively cheap college, you'll still end up paying ridiculous amounts of money in interest. Getting a degree nowadays is as much an investment as buying a house... except that you can sell house.

If youngsters don't go to college, they're labelled as uneducated and deadbeats because they can't find a decent job and are forced to work at McDonald's. If they do go to college, they're labelled as over-educated and deadbeats because they can't find a decent job and are forced to work at McDonald's.
Feb 6, 2013 6:03PM
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Can't wait for the next article that says U of P sued for providing inadequate eduction to actually get a real world job....LOL...slippery slopes here huh?...
Feb 6, 2013 5:36PM
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These unethical students AGREED to repay the loans when they were made, then they try to get away without paying. WRONG!  I paid all my loans back...early...so should these students!
Feb 6, 2013 5:08PM
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I have a BS in Applied Mathematics (GPA: 3.76) and took several graduate courses in statistics (GPA 3.64) as well as the first of the Actuary exams. I cannot find an entry-level job anywhere. I am not looking for pity, but it is incredibly frustrating to have worked so hard and achieved academic success only to be unemployable.

I have been searching and applying for jobs for the better part of 6 months now. I am studying for additional exams and learning how to use different types of software on my own. I am motivated, hard-working, learn quickly and willing to relocate to just about anywhere in the Northeast or Mid-Atlantic. Please help me.

Feb 6, 2013 4:47PM
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TODAY - - COLLEGE IS A SCAM!!!

TOMORROW - - - COLLEGE GRADUATES WILL BE THE NEW SCAMMERS AS TODAYS SCAMMERS ARE YESTERDAYS GRADUATES!!!!

Feb 6, 2013 4:43PM
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We are suppose to get a degree for our future but the cost is getting to the point where a middle class family can not afford to go to school. What is our future going to be like then?  2 class's of people, those who can and those who can't.
Feb 6, 2013 4:24PM
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It's the kids own fault for majoring in Poly Sci or Art History. I mean, come on, who in their right mind thinks they are going to succeed in life or have a job before graduating when you study "Communication."  I studied Accounting, I checked the market, found a major that was in demand and did it.  Get real kids, the days of freeloading are over. Major in something respectable.
Feb 6, 2013 3:49PM
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maybe students should sue the colleges because they can not get jobs.  I know for a fact the Ohio State University actually lied to their education majors and made them get their master's degree in order to get their teaching licensure - now schools are not higher master degree teacher because they can not afford them.  I think this should work both ways - if students can not get jobs then colleges should be held accountable. 
Feb 6, 2013 3:46PM
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They spent the time now they should pay their dimes
Feb 6, 2013 3:38PM
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This issue is not about going to college, it is about going to college when you can't afford to, borrow money and then don't pay it back. When it's one's own money, then get whatever degree you want but if you're going on someone elses dime, make sure your degree will land you a job other than excavating ruins in outer Mongolia. Secondly, and off course a little, if we are sending so many people to colleges and universities, that it is driving the costs up, as someone previously said, which I think it total BS, but if there are that many people getting degrees. doesn;t it make one wonder why the hell we are importing all these foreigners as doctors and computer nerds? What are these colleges/universities teaching our people, on our dime?
Feb 6, 2013 3:32PM
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I get that some degrees do not directly translate to employment. However, those  degrees (e.g., art history, philosophy, history, English, etc) are not "useless" for those of us seeking knowledge.  Universities were not designed as vocational programs.  I majored in business (undergraduate plus MBA), which gave me lots of career options.  But, I am grateful, now, for the opportunity to go back to university for liberal arts classes to increase my knowledge & critical thinking skills
Feb 6, 2013 3:27PM
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When will Obama attack "Big School"?
Feb 6, 2013 3:13PM
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while many students are struggling to pay for their education, unqualified student athletes who can barely speak proper English and have an IQ below 70 are getting full scholarships for playing football, basketball and baseball. A prime example of this is Frank Gore of the 49ers who scored a 4 on the wonderlic. Universities are too focused on sports and not education. That is the problem with this country. On interviews, I always witness countless "professional" athletes use improper English grammar  and they are paraded as though they achieved something great for humanity. 
Feb 6, 2013 2:49PM
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it used to be that a college education meant something.  that was @50+ yrs ago.  now any illiterate can go to and graduate from college.  a college degree today is equivalent to a h s diploma 50+ yrs ago.  furthermore, not every SHOULD go to college.  everyone thinks their degree is going to make them the next billionaire.  newsflash!  someone's got to work at wendy's, dig ditches, etc.  then people complain when illegals "take our jobs".  they're merely taking the ones americans think they're too good to do!  so when you get your worthless sheepskin (it's really just paper now).  hang it on the wall and think of all of the money and effort you put into a degree  . that will get you  that great job, i mean career as a  manager of a 7-11!  i have an mba, and i don't think much of it either, esp being i'm now retired!
Feb 6, 2013 2:48PM
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the problem with kids is they think they can go to an elite college pay 50k a year tuition get a degree in socialolgy and get a great job that pay 50K ....the reality is they can get a job that pays 22-29k and can't pay back the 100k in loans. it hurts when a kid who went to COmmunity college and finished at a good state school came out with the same degree and no debt....gets paid the same....Kids need to be told this upfront. and the parents need to stand up to them when they do this type of BS.
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