If you have or anticipate having heaping piles of student debt, here’s a little legal tidbit to get your blood boiling: Even gambling debt can be discharged in bankruptcy, but student loan debt can not.
According to the National Postsecondary Student Aid Study conducted by the Department of Education, 66 percent of undergrad students graduated with student loan debt. The average student graduates with more than $23,000 in debt. And that’s not even getting into graduate level, which is often more severe.
In January of 2009, attorney Robert Applebaum posted an essay on Facebook detailing some cogent reasons to include student debt forgiveness in the bailout legislation. Within hours, he had more than 100 members of a new organization: Forgive Student Loan Debt to Stimulate the Economy. And, after two years of research and organizing, Applebaum is more than happy to share a bit of wisdom with future debtors.
“I rushed through school — high school to college to law school. Taking a break in between might not be a bad idea,” he says. “You’re paying a lot of money to do that discovery in school. You can discover it while earning a paycheck.”
And being in the work force can help prepare you for some big financial decisions.
“Avoid deferring and forbearance like the plague,” he says slowly, as if to make sure it’s sinking in. “They’re not doing you any favors. Lenders are all too happy to give it to you. Why? Capitalized interest, which is a racket the mob would love to have.”