Forever Credit Card Debt Goes To Student Loan Program

So the familiar “Forever Credit Card” debt syndrome has graduated to student loans as WSJ shows “how your student debt [aka “minimum payment schedules”] keeps growing even when you keep paying. While some grads’ payment plans don’t even cover interest, “punishing” tax bill can await down the line…

How can a graduate student loan balance get out of control like this, even after shelling out month after month, you ask? The WSJ already ran a series on how some colleges charge six-figure sums for degrees that lead to low pay & the federal loan program without limits can lead to huge debt loads. But, on top of that, consider the impact of popular repayment plans that tie monthly payments to those low salaries; then, think about those double-digit credit card balances that can keep mushrooming month after month as minimum monthly payments barely cover accruing interest, more purchases down the road pile on the debt load, too, and a missed payment or two means you know what. Even an illiterate could do the math.

The WSJ does the math for our student borrowers so we don’t need to repeat it here. But, the numbers are real and real sobering. Setting up a repayment schedule that is unrealistically “generous” aka “calls for low and/or delayed” pay backs is doing the kids no favors.

Davd Soul