Recently I wrote posts that cautioned parents and students not to take on too much college debt.
Why am I being a nag? College loan debt can be toxic. My Exhibit A is a family practitioner in Columbus, OH, Michelle Bisutte, who finished medical school with $250,000 in debt in 2003. Today her college loan levels have swelled to $555,000.
One of the craziest charges was a $53,870 fee when the lender turned the loan over to a collection agency. According to an article in The Wall Street Journal she could pay off her federal loans when she is 70 years old.
The physician’s plight is obviously an extreme case and she acknowledge that her mess is maybe “half” her fault. College loan borrowers, however, can get into nightmarish trouble far easier than you might think.
Before borrowing for college, understand what you are getting into before you sign the loan papers.