Having delinquent student loans will kill a college graduate’s chances of obtaining work on the level with a college degree. Prospective employers look at a young person’s credit rating to determine if they are a risk. Unfortunately student loans that are in default will show up.
Yet, in another disturbing bit of irony, those very loans take as a step to “obtain a career” will ruin those chances. In the past this was not as great of a problem in that recent grads could land those jobs that would allow them to stave off delinquency. What are the options now? In a world in which college grads can spend years looking for that “job” which will un-encumber them from the necessitated debt.
Most debt problems can be discharged by bankruptcy, this includes such debts as: gambling debt, tax debt, and credit card debt. This same protection doesn’t extend to debt incurred for school, nor is there even a statue of limitations! This was introduced into law in 1978 by former Representative James O’Hara. His presumption was that college graduates would default and to get out of paying by declaring bankruptcy [link to blog article on “Top 5 reasons that Student Loans Should be Dischargeable in Bankruptcy”.]
Not only is this very impropitious (“those darn hippy college kids are just slackers”) but it casts aspersions on a whole class of people. Hence the treatment of the college educated as natural criminals to be scrutinized and labeled before they have even done anything. Perhaps the argument can be made that the people who passed these laws were engaging in a bit of self-projection? That the same liars and thieves who outsourced their training to the universities, lied to their constituents, and in general played games on the mass of the country would assume that the average person was as pernicious and deceptive.
Then what would be the long term ramifications of the relations between those above and those below? Mistrust, hatred, fear, class warfare, and a whole host of other ills. How many barriers to entry are going to be allowed to keep the market afloat? Is it just a game with winners and losers? If so what will happen when the losers contest the rules of the game? Especially in this world wide financial crisis that has disproportionately affected young adults [link to Reuters News blog, on the Global Youth Unemployment problem.]
In the end when the new college student, a young person of 18, signs their Master Promissory Note (MPN), they are agree to life altering agreements [link to ehow article on the MPN for higher education]. They should think carefully about their next 5 years and beyond.