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No Way Out: Higher Education Costs and Keeps Debt in Your Life
The cost of becoming a doctor or lawyer are two of the most expensive professions to go to school for. Becoming an attorney takes far less time than becoming a doctor. When the student finally reaches their goal, most are in a mountain of debt. Serious debt. The new doctor or attorney will spend a long time paying this back despite the fact they may earn over $100 an hour. The word student denotes a young 18-21 yr old person, yet, there are many 30-45 yrs facing similar debt from their student loans.
Take one doctor's tale of horror, Michelle Bisutti, 41 yrs, finally completed her medical school in 2003. At that time, her student loan was $250,000. During her residency, the loan she had was not paid and deferred resulting is a compounding of fees and interest fees. Time went on, and when the bank sent it to a collection agency, another $54,000 was added. As of now, her student loan owed is $555,000. It is a killer. More common are the student loans from $50-100,00 and monthly payments range from $230-800.
Many think they can get rid of a student loan in a bankruptcy, not so. A court will never allow a student to dump their responsibility. The outstanding amount of student loans is now $730 billion of which only 50% is being repaid, the rest are deferred until the education terms are completed, usually ending with a degree.
For Dr. Bisutti, her journey began in 1999. Once med school was completed, she still had residency training that many refer to as "boot camp" for minimum wages. In her case, she had to take out too many loans, she missed payments, deferred payments too often and failed to read the loan terms. When she began, she was sure that whatever loan she got, a doctor's salary would pay it off. What she forgot was the loan rates of 11% compounded the whole thing. In four years of school, she borrowed $152,000 but had to secure more funding amounting to another $100,000. In 2005, the loan amount was due with payments of $550 monthly. In 2007, she completed a fellowship and funded more schooling and daily life needs using her credit cards. All this combined into a whopping $1000 a month fee. She was still making a non-doctor's salary. Time continued and she defaulted on the loans (federal and private loans) and the banks sent them into collection and added another $54,000 in fees.
The private loans she secured came to $36,000. Luckily, she continues to pay them off and by the time those are paid off, the bank will have received $128,000. The saddest is the fact that by the time Dr. Bisutti pays off your federal student loans (not private loans) 351 months will have elapsed and she will be 70 yrs. and most likely retired. For her, the student loans to achieve her dream of being a doctor have ruined her life. Her credit is not good, she cannot rely on it to buy a car or house. Her fiance and her have postponed their wedding plans and plans to have kids because of it. Relationships also must bear the brunt of the other's debt when married, so it becomes a real issue despite the passion of love between a couple.