Students and loans: 'Til death do us part

The Chicago Sun-Times reports:

Greg Treece, of Downstate Mattoon, now wishes he never enrolled in Washington University's Occupational Therapy program. "Choosing an expensive private school and borrowing the money to go there is the single greatest mistake I have ever made," he said.

Treece took out $84,000 in loans. Six months after he got out of the St. Louis school, his monthly payment was more than half his take-home pay for his first job in Chicago. He later lost his job. With compounding interest, his loan quickly skyrocketed. At times he seriously wished he could go to jail in exchange for wiping out the debt.

With a new job, he's managed to pay $60,000, but his balance remains at $111,000 because of fees, penalties and interest. "It's like indentured servitude," he said.

For those who default, lenders can truly play hardball, often employing no-scruples private collection firms that call borrowers as often as 10 times a day.

Shirley, an Ivy League-educated lawyer, lost her job in Chicago in the late 1980s. She pleaded for reduced payments from a collector working for the Illinois Student Assistance Commission -- but was denied.

"I said you are driving me to bankruptcy," she recalled. "They wouldn't budge."

In bankruptcy court ISAC claimed she owed $78,000, which included $13,000 for collection costs, 20 percent of the total debt. Nearly all of the debt was eventually erased, according to court records.

Because that was before the recent law changes, she should have been clear.

I guess we are reaching the point where college isn't such a great deal for everyone.When wages don't keep up with government subsidized tuition increases,you can't just claim college graduates are necessarily going to be wealthier than those who don't go to college.