Defaults sore on student loans

This type of news is never good. From the WSJ:

According to new numbers from the U.S. Department of Education, default rates for federally guaranteed student loans are expected to reach 6.9% for fiscal year 2007. That's up from 4.6% two years earlier and would be the highest rate since 1998.

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Sarah Kostecki, a 24-year-old sales associate in New York, graduated last year from DePaul University with a major in international studies and $87,000 in debt, translating to monthly payments of $685, the vast majority of which are private loans.

The payments represent more than a third of her take-home pay, and to help her make ends meet, her grandparents are giving her $200 a month toward her debt this year. Beginning in January, she'll be on her own, and she worries about falling behind.

"It feels like I'm being punished for having gone to school," Ms. Kostecki says. She has contemplated some of the options offered by private loan companies, such as temporary interest-only payments. But after two years, her payments would jump by almost $200 a month on top of what she's paying now, she says. "I don't want that."

Sorry Sarah, I don't feel sorry for you. You shouldn't have gone to an expensive private institution like DePaul University and majored in International Studies. Why didn't you choose University of Illinois, Urbana. Cheaper. Better bang-for-your-buck.

I love how this sober stories always choose some retard who went to an expensive private school, loaded up a debt, and then majors in a shit subject that pays shit. Then, surprisingly enough, when they get out of school, with debt payments of 700 a month making 35K a year, its hard to balance their checkbooks. Cry me a river.

Disclosure: I went to a public institution and my dad paid for every single penny of it.

Borrowers having trouble repaying their federally backed loans can call their lender to request that their payments be put on hold until they get back on their feet. Most types of federal loans qualify for "forbearance" -- meaning the borrower can suspend payments temporarily but is still on the hook for the interest that continues to build while payments are on hold, which is then amortized over the life of the loan.

Certain need-based loans qualify for "deferment," which means the government will cover any interest payments for a set period. Deferments and forbearances can each be used for a maximum of three years per loan.

There are fewer options for borrowers with private loans, which have soared in recent years as limits on federal borrowing failed to keep up with rising college costs. Students borrowed $19 billion in private loans in the 2007-2008 school year, six times the amount they borrowed a decade earlier, after factoring in inflation, according to the College Board, a New York-based nonprofit.

This article seems to fulfill the new mindset in America: "when you in financial trouble, plead ignorance and blame it on someone else".