Janet Lorin answers this question in her Bloomberg Report.
For a loan, or system of borrowing to be effective, it should be
That is, both sides benefit.
A voluntary transaction does not occur unless each
So, you do not have the $ to fork out cash for your house; the bank lends the particular money.
You get to live in the place while your re-pay the bank, plus the bank makes money on the mortgage loan.
How does this play out for student education loans?
It should be what the ad campaigns say, each student benefits by getting that valuable college education, enabling her to “earn one million more dollars over her lifetime than someone with just a high school diploma.”
Ms. Lorin finds loads of entities making money on education loan debt, and not much value with the actual student.
Her example is usually a law student, which is currently concerning the worst deal you can make, for anyone who is borrowing for 7 or more years of schooling, thinking you will end up making big bucks as a lawyer.
Well, I am filing Chapter 7 bankruptcies for lawyers whorrrre WORKING AS LAWYERS FOR $14 Each hour.
That’s right.? More than one.
A contract firm hires them for $14 each hour, then rents them to law firms for however long they are really needed.
From Ms. Lorin’s story:
Jody Sofia borrowed $92,500 to get a degree from?Florida Coastal School of Law. Now she\’s in default, her outstanding balance having ballooned to just about $144,000, and she spends her days fielding calls from government-contracted debt collector
Sounds like she had no debt for her undergrad degree.? However.
Like many with law school debt:
Sofia, who didn\’t make bar exam and never got a legal job after graduating from Florida Coastal in 2004, says the machine is dysfunctional. Derailed by illness inside them for hours to care for ailing parents, most of her income has come from doing its job an independent insurance adjuster, the same thing she was doing before going to law school. While she has made some payments, interest within the loans keeps accruing.
Read your entire article.
Who makes money?? Education loan servicers, which, as readers of this blog know, keep getting chastised by gov departments for messing up their assignment.
Sallie Mae, now Navient, makes money.
NCT buys private education loan debt, obviously at a discount, then sues to gather it.? They make money.
As I said, read the whole thing.? But not before eating.