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 12:32PM
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Lets just crash the system! School loans to high, interest to high, wages dropping, high inflation coming, degree's available that get you know where. The fraud and manipulation have to stop! With no demand from the people of the world, the system will crash and be reorganized. We have to stand up and be a wolf, not sheep. Do you want to be controlled? Ask yourself, get involved and stand up.

 

 

 Audacity, Audacity, Audacity!

 

           Quote: General Patton

Feb 6, 2013 12:21PM
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College is expensive.  Don't major in something that is a "feel good" major.  Sure, that communications or art history degree allowed for some bodacious beer drinking while at school, but isn't paying you back post-graduation since you decided to spend $90k on the freaking thing. It is infuriating when people blame this, that, or the other thing for the ballooning student loan debt. I had over twice the average student debt and am almost done with repayment. It is my debt, I took it out and I am responsible for it. I have never missed a payment or been late with one.  I have not been able to visit Europe as much as I want, or buy a new Benz, and had to wait unitl I'm in my 30's to buy a house because of that debt, but I only blame myself. Take some responsiblity for crying out loud. Stop blaming everyone else for your financial woes and open your eyes to the big wide world. Sometimes it will kick your a$$.

Feb 6, 2013 12:16PM
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My Grandfather was a fairly successful business man. He grew up during the depression. When I turned 18 and was about to graduate H.S. He had a long talk with me. He said, "what are your plans for your future." I told him, I was thinking I would like to go to college, but wasn't sure what I wanted to be. He paused a moment and said, "Son, college is great, and there is nothing wrong with wanting a higher education but, I want you to consider learning a trade as well."  He went on to explain that during the depression, there were a lot of unskilled people out of work, as well as most college level  "business" jobs"...However, plumbers, electricians, sanitation workers and people who knew how to build things were still working. He also said, anything in the medical field was good too. You see, when the economy tanks..........People still need their toilets to work, they still need lights to come on, they still need the garbage picked up and when they get sick, they still need care. What they don't need, are financial advisors, Stockbrokers, CFO's and Liberal  Art experts. I learned the L.P. and Nat. gas trade. Never went without a job.....never made millions, but I could always feed my family. Once I had those skills, THEN I went  to college...for myself.  

If you beging to think about a career, and possibly entering college....with no real idea of what you wish to be. Put it off for a few years, learn a trade so you can survive. Then, once you've established yourself.....and choose too,  Go to school. You'll always have "marketable skills" to fall back on....If we slide into another recession. 
Feb 6, 2013 12:08PM
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Wow.......  where does this "you owe me" mentality come from?

 

if i borrow money from you, and I don't pay it back, it's solely a problem between you and I and not anyone else.

If I am the kind of person who demands someone else gets involved, I am a leech,  and not a smart person.

If I am a group of people who supports and  demands others get involved because I can't handle my own affairs, I am a liberal who thinks "someone owes me because I don't have enough skill to manage my own life."

 

No wonder there are articles like this.

 

 

 

Feb 6, 2013 12:07PM
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Rethugs and their posters here, time for an answer!

WHY DO YOU AND YOUR REPUBLICAN PARTY SUPPORT JOB OUTSOURCING TO CHINA?
Feb 6, 2013 11:58AM
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And the Wharton school should start suing graduates that break the law, like Rajaratnam, for damaging their reputation.
Feb 6, 2013 11:54AM
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Low Republican wages = Record low birth rates that are aging our population and changing our demographics.

Today, a sub $15 an hour wage(below $15) is population reduction.

$10 an hour wage = population reduction. Federal minimum wages need to be set at $15 an hour. The American economy would soar.

Republicans are the sworn enemies of the people.

Feb 6, 2013 11:50AM
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YOUBET948: I knew some right winger would find a way to blame Obama.These

lawsuits the coleges would pursue is another way of helping lawyers get rich.

Feb 6, 2013 11:48AM
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Once again the only making sense on this feed is .  Thank you for your insight.  American's are brainwashed.  The Capitalist structure doesn't work for education.  Furthermore, the endless taxes paid to the government, by lowest earners is an outrage to our society.  The Government has yet to get this right, and love to puni**** citizens.  

Frankly, I'm embarrassed to say I live in a country that is so entitled and yet, so not responsible for taking responsibility for their actions against their citizens.  Where are we going?  
Feb 6, 2013 11:46AM
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Why do Republican posters here support the Republican filibuster to stop job "INSOURCING" back into America from china?

Expose Republicans as the job outsourcing FASCISTS that they are.

Rethugs, time for an answer! WHY DO YOU SUPPORT JOB OUTSOURCING TO CHINA?
Republican Corporate FASCISM has proven to be the ENEMY OF THE PEOPLE.
Feb 6, 2013 11:44AM
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Maybe the government should take a page out of this playbook and start going after all those deadbeats who owe federal student loans.  Secondly, not everyone is suited for college/university so stop the media hype that in order to succeed in life, a college degree is necessary.  This country was built by the hands and minds who were inventors, machinists, tradesmen etc. Maybe it's time we got back on track and quit handing out college loans like they were chiclets to those who aren't qualified.  Go after those who don't pay, make tuition rates and books etc more reasonable/affordable and quit the quotas.  Stop the student loans as they now are and rates will drop dramatically.
Feb 6, 2013 11:41AM
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I can't believe this is happening in America.  Let's look at the base salary first.  It hasn't moved much since the 1970's, for the majority of Americans.  That's a fact you people that think these kids are "dead-beats."  Everything else in America has gotten more expensive, but payrolls remain low for most people = hence our inability to recover from the recession.  School, private and public are none stop about recruiting, and parents, public grade schools, and corporations want a college degree from someone, yet the corporations aren't even paying a minimum wage of Australia $16.46AUS.  

Frankly, the Government should stop all tax breaks to large corporations, raise the tax rate on the rich, give up subsidies to Agri and Oil companies, and pay off the loans.  After all it was large corporations, and government expenses that took all the potential earning dollars away from the graduates.  

What amazes me about your feed is that these people forget without an educated society -- we have cold war RUSSIA, and other third world party backward living.  Now, I don't want to live like that do you?   
Feb 6, 2013 11:36AM
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Meanwhile, Republicans filibuster job "insoucring", thus preventing the bringing of jobs back home to America from China.

Why would they do such a thing?
To sabotage wages. Good wages are the enemy of Republicans that want to restore the $3 a day wage for a 16 hour workday, 6-7 days per week.

Low wages= Low birthrates and national suicide.

Feb 6, 2013 11:34AM
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I can't believe the comments being thrown around in here. I am a recent graduate and needed to secure loans to pay for college. I have a large burden of debt, but that debt is mine and I own it. I knew exactly what I was doing and I have no issues with paying the loan back because I was responsible and took out only as much as I could afford to pay back (having researched the average starting salary in my profession). This supposed student debt crisis is the result of students and not of any university. Costs are increasing at institutions due to the demand for a degree. College enrollment rates are sky rocketing because parents brainwash their children into believing that a college degree will make you successful. That is a fallacy. Parents....teach your children that there is no such thing as a free ride and that loans and credit will have to be paid back regardless of your situation upon graduation.
Feb 6, 2013 11:24AM
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lol, after future students see this i bet this will put a hissing sound in the balloon for colleges i hate that for them.  Here's what you get students pain and heartache.  Is it worth it?  Tell the colleges to screw off and let them go under show them you dont need them.
Feb 6, 2013 11:13AM
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I have no sympathy for the college students on not paying off their loans. Most thought they would have a free ride with Obama in office and the majority voted that way. They face the consequence of a lousy job market and debt owed to the schools under this Pres failed economic policy. 
Feb 6, 2013 11:11AM
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You wait and see when these people cant purchase things and the talkin heads find out it's hurting the economy.  This will trickle down to businesses wait and see.
Feb 6, 2013 11:07AM
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Colleges have gotten a sweetheart deal for too long. These student loans are backed by the government so lenders are not concerned with your ability to repay, they will get their money back one way or the other. The schools are not encouraged to compete and charge unrealistic rates for classes and books, what do they care the loans will cover it. These loans cannot be set aside, you can't EVER get out of them, so the tudent is on the hook perpetually FOREVER.

 

The schools offer useless degrees or degrees that have very limited opportnities to make a living. I am not saying that music and art are not necessary but the market for most of these  students would be working as a pinter of houses or a clerk in a record store. There are many many other examples such as ethnic or gender or lifestyle specific degrees. While it is good to have these areas of study available it is unfair to charge $80,000 or more for a degree that virtually worthless in perparing a student for the job world. Most of the people that have jobs relating to these type of degree are the ones teaching the classes.

Feb 6, 2013 11:06AM
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The U.S. government is people biggest adversary. Look at all these other countries that have free college education. Countries that the government here is brain washing people to believe is no good. Countries like Cuba, Libya (which the U.S. helped overthrow Ghadahfi), even poor Hiati. Totally free college education. Libya everyone owns there home. Many countries people truely own there property. They are not bound by property taxes for life. This is one of the most oppressed systems around. Government simply stealing from hard working people. I never used the public system because my parents paid for me to go to catholic school. But my parents sstill paid a school tax.
Feb 6, 2013 11:04AM
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This is not going to end well with colleges.  Count on it.
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