Defaulting on Student Loans Does Not Add Up

Many readers probably know from experience that student loans = an overwhelming amount of stress. But, as it turns out, defaulting on student loans = an even more overwhelming amounts of stress. Forbes recently wrote an article (Deduct This: The History of Student Loan Interest) on the history of student loans, which talks about how they have developed from being an altruistic way to help students pay for their education into a profitable business for moneymaking lenders. Meanwhile, Elie Mystal at Above the Law wrote a piece about what its like to live as a student loan defaulter, and he implies that its a mixed bag. Not the worst thing in the world, but with definite, albeit manageable drawbacks. However, Megan McArdle from The Atlantic found Mystals advice did not add up and could be so lethal that she needed to respond (Dont Count on Settling Those Student Loans). McArdle argues that defaulting on your loans never makes sense. In fact, your credit rating will be so damaged that landlords will treat you worse than ex-convicts if you send your debt into default. The worst of it is that if you default you will owe just as much if not more than you did before you defaulted! According to McArdle, There are only two ways to erase the debt: prove youre permanently disabled and will never again earn more than a pittance; or die. Neither of these options sound too promising. Bottom line: student loans are stressful and burdensome, but there is no way to run away from them. The good news is that although defaulting on ones loan does not add up, investing in ones education can make mathematical senseif you invest wisely. Accepted.com ~ Helping You Write Your Best