Canada’s government announced on August 5 that family doctors, nurses and nurse practitioners that choose to work in rural communities with populations of 50,000 or less will be eligible for partial student loan forgiveness in 2013.
In the meantime, 49% of our own American medical graduates will graduate $100,000 or more in debt. Their counterparts in law have it a bit easier, but it still stings when you realize that 36% of all law grads will have to pay off six-digit debts as soon as they graduate.
Now this isn’t in any way about praising Canada. No, it’s about asking ourselves how the heck so many students actually managed to get themselves in this situation in the first place.
Statistician Mark Kantrowitz points out how the “easy-credit” boom of the mid-2000’s allowed people to overextend their loans without really understanding the risks involved.
Just how bad was this? Look at it this way: we have $8 billion available for student loans right now, but that figure was $23 billion back in ’08 right before the recession struck.
What’s worse is that grads from ‘elite’ private schools fared far worse than their counterparts in state schools. You’d think that an expensive education in a private school would net you or your children a good job, but no – you just end up digging your own grave.
Another factor that contributes to students finding themselves in six-figure debt is when they change majors. These folks are twice as likely to end up with $100,000 or more in student debt than their counterparts that choose their degree wisely and see it through to the end.
The fact that student debt can’t be erased with a declaration of bankruptcy makes it all much more complicated. You have to pay off that debt even when you’re out on the street with not a nickel to your name.
But in case you do find yourself in such a situation, you can try to apply for “undue hardship.” You could luck out and qualify to get your loans forgiven, but that won’t happen until you’re half-starved and are literally out on the streets for good.