Should You Apply to Have Your Student Loans Forgiven? Student loan debt nearly t
ID: 1133254 • Letter: S
Question
Should You Apply to Have Your Student Loans Forgiven? Student loan debt nearly tripled in the last decade thanks to many attending for-profit colleges. For hundreds of thousands buried in student loan debt, a little known 1994 program called “Borrower Defense” or “Defense to Repayment” sponsored by the Education Department offers a lifeline. The program is available for those students who obtained loans from the government’s Direct Loan program. “The law says students are entitled to forgiveness of existing debt—and, possibly, reimbursement of any repaid loans—if they can show their school violated state law in getting them to take out the debt. (An example might be if a school lied in its advertisements about how many of its graduates landed jobs.) However, it’s not clear what documentation the borrower needs to prove fraud.” Thousands have applied to have their loans expunged under the program. In the last six months of 2015, for example, 7,500 former students applied to have $164 million in student loans expunged. The U.S. Education Department has already agreed to cancel nearly $28 million in debt and indicated many more will likely get forgiveness. Assume that you recently graduated from a state university. You took the required courses for your bachelor’s degree and excelled in your studies. You made the Dean’s List each semester of your last two years and interned for a social services organization in your community. You hoped you’d be able to work in your chosen field of psychology and be able to pay off the debt a few years after graduation. Like many students, you paid for the majority of your education with student loans. Three years after graduation, your career has not turned out as expected. Instead of working in your chosen field of psychology, you have a low paying job at a retail chain and wait tables on weekends to make ends meet. You weren’t aware that psychology positions required a graduate degree. Your student loan debt remains unpaid, and you recently heard about the borrower defense program. You are considering whether or not to apply for the Borrower Defense program.
What would you do?
1. Apply for loan forgiveness and hope that the broad language of the law will make an exception for your state college education and loan. Besides, what’s wrong with asking?
2. Apply for loan forgiveness. After all, you aren't benefiting from your education, someone should have told you that you needed a graduate degree in psychology to get a good job, and there is no clear definition of fraud.
3. Don't apply. You were never promised a job and you made the decision to major in psychology. You could have chosen a field with more job opportunities.
4. Invent other options. Discuss.
(P.S In this assignment, I have to invent other options than the three mentioned above and provide detailed reasons)
Explanation / Answer
Other options could be -
4. Since the law states that students need to prove that their school violated state laws in getting them out of debt. It's better not to apply because there is ambiguity on the documents required for proving your point. Not aware of the eligibility is not an excuse because you might get aware of it while pursuing your undergraduate course. Instead of applying and then waiting, you can try to think of other sources to finance your debt.
5. Apply for the programme and prove in a way that, had you been aware of the eligibility of better jobs you would have extended the loan until your graduation degree. Because you were never told this by your college that's why you are in the category of deceived.
6. Do not apply, because your problem is aroused after three of your graduation as mentioned in the case. Had it been immediately after the course the college could be liable. In this case, there is no mention of college promising initially to provide job after the undergraduate course.