When the Consumer Financial Protection Bureau put out a request for the general public to submit statements describing their experiences with student loan debt, one of the people who replied was actually a man who wasn’t carrying any student loan debt of his own. Instead, he’s a consumer rights attorney from California who explained that he has watched many of his clients have their lives turned upside-down due to the amount of money that they owe from attending not private universities or public colleges, but vocational schools that prey on the uneducated and unsuspecting.
As he points out, these schools often fail to inform their students of the true costs associated with taking on private student loan debt. They don’t let them know that they may very well wind up paying upwards of 15% interest on their loans or that their minimum monthly payments could actually exceed their projected earnings. Even when they do make clear the amount of the interest, they don’t go to the trouble of letting these people know that it is considered extremely high and that there may be better options for financing their education. Bear in mind that most people are taking out student loans between the ages of 18 and 20, which means that it’s highly unlikely that they will be aware of the difference between a good interest rate and a usury one.
This attorney also highlights the fact that most vocational students are not going to be able to earn enough money to pay these loans back, at least for the first few years after their graduation. Because it’s very common for them to have a hard time meeting their minimum monthly loan requirements, they are often forced to watch as interest, late fees and penalties start to add up, increasing the amount that they owe and the odds that they will default on the loan in the future. This can also turn into a vicious cycle wherein the person has to watch their balance balloon over time into an amount that they will simply never be able to pay off.
Vocational schools need to be reminded that they are in business to help people improve their lives, not set them up for a lifetime of regret and financial strain. We need federal officials to take a very hard look at these institutions and force them to educate their students on every aspect of their student loans, in addition to their chosen vocation.
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If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, take the free challenge debt review to find out what options you have regarding your student loans.