[Kobi]

I was one of those lucky people who didnt need to finance my undergrad degree. Educational costs back then were nowhere what they are are now. I did have to let go of my dream of going to a particular private college and attend a state university instead. Am thankful I did cuz it saved me a lot of unnecessary debt.

Did finance half of my graduate degree. I financed thru a local bank rather than the school financial aid office. The terms were very clear and the expected pay back was upfront and reasonable.

I worked for a non-profit organization which bumped up my salary considerably with an advanced degree. Plus, I was able to get numerous side jobs. The increase in income was more than enough to carry to monthly payments. Remember we are talking like 30 years ago. Different world back then.

Once I paid off the loan, I continued paying the monthly payments to my own bank account - figured if I managed to survive without this money for 10 years, I could continue to pay it to myself. Thanks Dad for teaching me to always pay myself first.

This story was really bugging me cuz the student loan industry is starting to feel and look a lot like the subprime mortgage industry. People are incurring a great deal of debt without realizing the payback costs and practices.

Most of the loans are administered thru Sallie Mae of the Freddie Mac and Fannie Mae family of shysters.

There was and continues to be a big thing about deceptive business practices with Sallie and her associates, particularly in forcing defaults on loans. 60 minutes did a show on this a while back and I did find an article in the Washington Post about it. There is a huge benefit to Sallie Mae if people default because with late fees and penalties, the amount owed can double almost overnight.

People are paying incredible amounts of money monthly but are only covering the cost of interest, late fees and penalties. They are not paying anything off the principle. Thus they will never pay off that debt.

And, there was something about Sallie Mae being paid not only to process the loans, hold them, and collect on them, there was a built in additional profit whether people repaid them or not i.e. a built in bail out with a guaranteed profit margin.

This irks me.

Here is the link to the article: http://www.washingtonpost.com/wp-dyn...042602627.html