Student loan documentary

[mrs.b]

I do not think any loan forgiveness programs are needed, that is certainly not what I’m saying. Whether or not they understood, they were old enough to commit to debt, and they’re old enough to pay it; it is why we pay $600 per month every month for my husband’s goofy debt, and will continue until it’s gone (hopefully before we retire). The disclosure system is flawed, though, and not remotely on par with other large purchase items. If you finance the purchase of any other large ticket item - house or car - part of the process is receipt of an itemized disclosure statement that includes the value being financed, specific monthly payments, interest rate, and an amortization schedule. Why do mortgages and car financing agreements get detailed breakdowns for borrowers to review prior to commitment, but student loans only get vague statements from schools with little or nothing from the lender before the debt is committed? Here is a copy of my own financial award letter (personal information blanked) and how “detailed” it was:

(name)
(address) (date)
(address)

TOTAL JUL11 OCT11 JAN12 APR12

Pell Grant xxxx.00 xxx.00 xxx.00 xxx.00 xxx.00 Y_N_

Direct Subsidized St xxxx.00 xxxx.00 xxxx.00 xxxx.00 xxxx.00 Y_N_

Direct Unsubsidized xxxx.00 xxxx.00 xxxx.00 xxxx.00 xxxx.00 Y_N_

Basic checkboxes “yes” or “no” with no reference to payoff terms, interest rates, or the rest. I understood mine and had already run my own numbers, but all these complaints are coming from somewhere, and I cannot be that callous to think it's all deadbeats trying to dodge their obligations. If every other truth in lending disclosure statement for every other type of purchase includes itemized breakdowns – some of which are for values far less than a single term of college education at some schools – why in the world would these sizable debt agreements not come with the same information?

These are kids for the most part; they are old enough to commit to debt, yes, but were you as financially responsible then as you are now? Enhancing and expanding disclosure and truth in lending statements would benefit everyone. And not on a per-term or per-year basis; the lender should send a statement detailing how much is already outstanding on the account, the balance if the future loan is accepted, and where it would move monthly payments. How would that request bypass a borrower’s obligation? They would still be committed to repay previously-accepted funding, but it would make it far more clear to these kids what they’re doing to their financial future.

If this information were available, it would serve two purposes: educate the borrower and eliminate room for complaint when the bill comes due, and serve as checks on the lenders if terms are deviated. I think it would do away with most of the complaints of “I was never told that,” and “this changed from what I agreed to,” because it’s in writing, on file, and defensible for both parties.