Student loan dodgers

I am appalled. While sharing my unabashed glee at finally paying off my student loan some friends let me in on a dirty little secret. They don't pay on their loans. Ever.

How do they manage that? Defer, defer, defer. The part that really pisses me off surprises me is that they can afford to pay their loans, they simply choose not to. And here's the kicker- they have no intention of ever paying them. One individual is considering purchasing a larger home and a luxury car. When I enquired how she could afford it when she is not current on her loans she dismissively replied: "They're in forbearance". FYI- She graduated 6 years ago and has a lucrative career.

Another friend clearly has the funds to pay her loans but instead chooses to spend that money on Louis Vuitton purses and vacations. When I asked how she was able to postpone her loans for over 10 years she just laughed at me and replied: "I defer them. No one ever checks. No one pays their student loan."

Am I missing something? I was under the impression that defaulting on federal student loans was financial suicide. I envisioned creditors descending like locusts, going to the ends of the earth to collect their debt. Suzie Orman would flip out.

Curious that perhaps I had missed a plausible loophole I researched the issue. Acceptable reasons to defer student loans include: "your death, total disability, unemployment, economic hardship, enrollment in school, or membership in a uniformed service".

Student loan debt is virtually inescapable. Unless you suddenly lose a limb or drop dead the bottom line is- the government intends to collect. Even bankruptcy will not discharge your loan. The government can take your income tax refund, garnish your wages, prevent you from renewing a professional license or even enlisting. In the case of Lockhart vs US the federal government collected unpaid student loans by withholding social security. Since there was no statute of limitations they got their money, albeit many years later. And P.S.-interest accrues on deferments.

So I hope my friends enjoy their new houses, luxury items and vacations. Because when the Feds catch up with them (and clearly they will) they'll repossess their walker if they can apply it to the outstanding balance.

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