USA Today has a long piece about people who are struggling to pay back student loans from private lenders. The woman they use to kick off the piece has a $1,000 per month payment. No doubt that’s a tough payment to make even if you’ve secured a high-paying job in a roaring economy. It took me 7 1/2 years to pay off my student loans and my payment was much lower. I knew when I signed on to the loans that I couldn’t accept more money than I could reasonably pay off once I had a job. I actually turned down more loan money for that very reason. So why did this woman agree to a huge loan payment when it’s a good bet she wouldn’t be able to keep her commitment? Why do we expect to be “protected” from ourselves by government intervention?
Fernandez, 29, of Bridgewater, N.J., was laid off from her full-time job two years ago. She only recently found a job with a temp agency that pays less than half what she had been earning. She and her 8-year-old daughter had to move in with her parents because she could no longer pay the bills, which include student loan payments of more than $1,000 a month.
