The 555k Dollar Student Loan Bill
February 13th, 2010
This may be the most extreme example of student loan debt that I’ve ever seen. According to a story in the Wall Street Journal, one doctor in Ohio is looking down the barrel of a student loan debt of over half a million dollars.
Michelle Bisutti, 41, graduated from medical school in 2003 with about $250,000 in a combination of Federal and private student loans and it all went downhill from there. A six figure principal balance mixed with a heavy dose of rising interest rates and dash of other obligations like credit card bills created a bubbling cauldron of financial hot water for Dr. Bisutti.
To put this in all perspective (and to make you feel better about the $39 credit card late payment fees) picture this: Dr. Bisutti has been hit with a $53,870 collection fee on her private loan and an additional $31,942 in collection fees on her Federal loans. Ouch.
It’s difficult for many people with debt problems of their own to sympathize with high income individuals like doctors and lawyers who get in over their heads, but the root causes are the same whether you make $20,000 or $200,000 a year. Bisutti said that she “didn’t look at the fine print” and made mistakes in missing payments and deferring her loans.
She told the Journal that the stress of her debt keeps her up at night and her bad credit has prevented her from buying a home or a new car. She even says she and her boyfriend of three years have put off marriage and having children because of the debt.
Like so many student loan borrowers, she undoubtedly expected that her education would provide an income great enough to support her debt and a decent living. Like so many borrowers, she’s been proven very wrong. Especially in this down economy, student loan debt has skyrocketed.
In September of last year the House passed a bill that would mandate a switch to direct government lending, which would hopefully lower the cost of borrowing for students. If passed, it would steer an estimated $80 billion in savings over the next decade to grants for needy students and other education initiatives. But the bill has stalled in the Senate as the Democratic majority seeks to circumvent a virtually certain Republican filibuster.
But as long as loans are available, and college degrees are seen as tickets to a brighter future, students will continue to take the gamble and many will lose.
If you have a student loan that is in default, check out the resources and advice from the Department of Education at http://www2.ed.gov/offices/OSFAP/DCS/index.html.
Posted in Student Loans
4 Responses to “The 555k Dollar Student Loan Bill”
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Exactly. No tears shed for this one.
She was too lazy to “read the fine print ” and now she wants sympathy/help/a bailout. She’s supposed to be a doctor for cryin’ out loud. What kind of doctor will she make if she can’t read the fine print on her own loan papers?!! And why should she even consider buying a house or new car when she is in debt to someone else. Unreal.
Borrower beware… student loans are a huge dead weight on peoples backs. When the principle goes up, earning a proportionally higher income doesn’t make it possible to make payments because this type of loan carries very little tax benefit and compounds by the minute. This lady should have paid every dollar she could spare to pay the loan below 100K and then could maybe breathe a little.
Poor baby, she ‘can’t’ buy a NEW car or NEW home because of her debt. I am surprised she is 41, I thought only people in their 20′s are this financially clueless and have
this extreme sense of entitlement and attachment to material things.
I am 32 so not some ‘old geezer’ but honestly why should she get a scintilla of help?? What about those of us who pay our bills as agreed and understand the terms of the loan before signing it?
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Like so many student loan borrowers, she undoubtedly expected that her education would provide an income great enough to support her debt and a decent living. Like so many borrowers, she’s been proven very wrong. Especially in this down economy, student loan debt has skyrocketed.}}}}
Well ‘she expected’, like many people (mostly in their 20′s) have this idea that a ‘degree’ is a magic ticket to a six figure income and that these jobs just fall out of the sky.