Seriously, This Has to Stop

Yesterday I wrote about how somebody searched for “can i serve jail time to pay off student loans?” last week and ended up on this site.

Today somebody searched for “will going to prison reduce your student loan?” and also ended up on this site.

Jail Time II

These are your 20s and 30s. These are the times to get out there, explore the world, take risks, and learn more about yourself and what makes the world go ’round. They’re not supposed to be spent behind a razor-blade-tipped chain-link fence and metal bars so you can pay off the four years you spent getting an advanced education.

Just how big of a crisis do we have on our hands when multiple people would willingly be incarcerated to pay down their student loans?

I want to know the demographic of people who are investigating prison as an alternative to paying down loans. Surely these aren’t the same people who can’t pay off their loans because they’re living way beyond their means by flying out on a vacation every other month, getting bottle service when they head to the bars, shopping Gucci and Armani, driving a Benz, and starting every morning with a Starbucks latte. To consider prison as an option to pay off student loans, I’m guessing these folks have completely and utterly exhausted every single other method to pay down the debt. We’re not talking about Max here. Somebody considering prison must have cut out every single minuscule discretionary cost, sold all of their non-essential stuff, and is working 80+ hours a week. And yet they’re at the end of their rope and willing to give up every single one of their liberties for an extended period of time just to be done with their debt.

Bankruptcy isn’t an easily viable option for student loans. And neither is prison. Are these folks unaware of the income-based repayment plans (IBR) for federal student loans? If you have any insight into the IBR–I’m not a first-hand expert–post it below. Why might it not be an option for somebody considering prison? Perhaps because it covers only certain types of federal loans?

I’m sort of speechless right now…I had no idea we were dealing with a problem of this magnitude. Am I overreacting? Is everybody else unfazed? I know MJ’s with me based on the commentary from yesterday. Are there any other thoughts?

Edit: I just got this email from a college friend:

You realize the more you talk about prison and student loans on your blog the higher you end up in search engine results for prison and student loans, right? It’s this little thing called search engine optimization. 

I get that. I almost included the disclaimer in my post, but I decided it would be a moot point since my position is that people shouldn’t be searching for prison + student loans, full stop.

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19 Comments

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19 responses to “Seriously, This Has to Stop

  1. I agree it is out of hand. Another consequence of the ease of credit is the rate of increase in educational costs. Institutes have been able to raise their tutions in percentages larger than inflation for a number of years, because they know student will just rely on credit to pay ANY increase.

  2. Barbara

    I am happy you are writing again

  3. Income based repayment can be helpful if you are working to pay off other debt, but your debt will be there unless you’re on income based repayment for 25 years you will have to pay back it at some point. Here is a great website that explains it: http://studentaid.ed.gov/repay-loans/understand/plans/income-based. The other thing to know is that if a person is on income based repayment for 25 years and gets it forgiven there will be a tax bill for the amount forgiven that will be due at the end. Finally, there is also the possibility of your federal loans being forgiven for working for a non-profit for 10 years.

    • I’d much rather chip away at my debt for 25 years or work for a non-profit than go to prison..Teach for America… or Sing, Sing? Wounded Warrior…or Attica? Make-a-Wish…or San Quentin?

  4. TheGoodFightAgainstDebt

    Graduated a top 10 undergrad, top 50 law school, nearly six-figures of debt, but for the past 2 years I’ve been mostly unemployed with only a few jobs here and there. Sold everything, spent five months living out of my car, applying to real jobs all day from public libraries. I believe in doing an honest days work, so I never resorted to pan-handling or welfare. However, I’ve learned I’m not above working as a day laborer doing landscaping alongside migrants. I’m now proud to say I’m living indoors.
    I’d never wish to be behind bars, even if it were a possible solution to my debt problems. But, when I was living out of my car there were some nights I would’ve appreciated free heat and food. The only way I can imagine paying back my debts (which I do sincerely wish to do) is to get a gov job or join the military.

    • Unfortunately, when you put it like that, it actually does lend a lot of credibility to the prison option.

      I’m glad you have a roof over your head. And there’s absolutely nothing wrong with landscaping.

  5. MJ

    These are desperate times, nothing surprises me, except that there haven’t been more such searches.

    I’d like to hear your thoughts at some point to the recent “changes” in student loans that the President endorsed. Helpful? Hopeful?

    Also, how about a post on the legal implications of student loan debt and marriage. How does that work, does the new spouse’s debt become a joint liability?

    As you can see, I’m totally with Barbara :) Keep up the writing, musing and leading.

    • MJ, did you just give me homework?? :) Those are definitely a couple of good topics that I should tackle at some point soon.

      • Jennie

        The short answer is, in general, the debt one acquires before marriage will stay that party’s sole and separate debt. However, if the parties both have student loan debt (or credit card debt) and choose to consolidate it in the name of both parties, the consolidated amount does become a joint liability. (This is why people shouldn’t co-sign any loan unless they can sleep at night knowing they can afford to pay the loan if the other party is a deadbeat…or loses his or her job, etc. In other words, if the bank doesn’t trust the person to make the loan payment, why should you?)

  6. Joe

    Perhaps the search was made by someone who is going to prison anyway and wants to know what will happen with their loans.

  7. We just had this discussion on our radio show.

    We were saying the reason tuition is so high is because universities know that the money will come from the government through student loans. Obviously if everyone stopped using loans or just stopped going to college for a few years the tuition costs would drop significantly. The trick is getting everyone to comply with that. Easier said than done of course.

    If you guys want to listen to the audio from that radio show you can find it here: http://www.smithfloyd.com/mds_0813/

  8. Arch Stanton

    I have over $100kin debt as an art student (yes, I know) and make $35K/year. Worthless. I’ve often wondered if I could pledge my life to work for the FBI or CIA (or some nefarious party) if it meant my family would be free and clear.

  9. *Facepalm* That is quite desperate. Even if it did help with debt, who would want a criminal record?

  10. Laura

    This information doesn’t seem to apply to anyone who has posted above, but IF you have huge student loans AND you have some serious health problems (which would include mental health problems) you can get a complete discharge of the student loans if you can get an M.D. to sign off on a simple one-page form that you can download off the SallieMae website. You do NOT have to meet the standard of disability set by the Social Security Administration or by a private disability insurer, and you get to choose the doctor you want to use..

    If your paperwork is in order, Sallie Mae discharges your debt immediately, and all collection stops, but you do have to provide them with updates on your income for three years. As long as you are below around 18 or 19,000 for the three year period, the discharge becomes permanent.

    I’m not sure what happens with “private loans” so this may not solve everybody’s problems.

    Part of all of the discharged debt will be considered taxable income by the IRS and by many state governments, but there is IRS Form 982 (Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).

    If you are despondent about being unemployed and hopelessly in debt, please consider the above option. Suicide and prison are not good options.

    My life was absolutely blighted by student loan debt and a horrible divorce and custody fight. But things have gotten a lot better over the years.

    God Bless anybody going through anything similar.

  11. This kind of annoys me that people think they can skate out of student loans when they know FULL WELL what they signed up for when they took them on.

    Or at least.. they should have known.

    I could have also skated out of the $60K I owed but I didn’t think it was even an option… although I will say that in the U.S. it seems to be more of a scam than in Canada if people are considering prison and suicide.

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