Hypothetically, let’s say there is a person named “Fred”. Fred has managed to rack up an absurd amount of student loan debt. Maybe he made a bad decision, or maybe he took a calculated risk that did not pay off. (perhaps he enrolled in a top 14 law school and got thrown out due to malfeasance on the part of the school administration. He obviously can’t get justice against a law school in court)
Fred will never make enough money to pay off the debt, and 15% of his income (on income based repayment) is an absurd amount of money compared to his total income. (since that money is charged from before tax income)
Fred would have to pay 8640/year towards his student loans. What would stop “Fred” from signing up for 6 hours of online courses each term, indefinitely? Perhaps he could be studying robotics or advanced algorithms or management skills or some skill actually useful for his job.
Upon retiring, he could finally start paying his loans back…using IBR against his very low retirement income (social security + withdraws from his 401k I guess).
Or, maybe he could just take his money and leave the country. Not sure if the US DOE really can dun someone’s investment income earned off of overseas accounts not in their jurisdiction, from someone not filing U.S. tax returns.
Looking at the Federal Student Aid site right now, it says you may apply for a deferment when you are enrolled in college at least half time. It doesn’t say that you are guaranteed to receive a deferment. So while Fred is free to keep taking classes as long as he likes, I would guess that the government is free to decide that they’re not going to allow him to keep deferring indefinitely.
Somewhat of a WAG as certain loans I don’t know about could be exceptions, but:
a) his money is not unlimited of course. Can he get up enough money for living expenses? And if he has not enough money for repayment and/or the poor money management skills he seems to have, his wherewithal to continue pay.
b) many near-guaranteed (aside from convictions, etc.) Federal loans (e.g. Stafford) have lifetime limits. Under $100,000 for undergraduates.
c) which means you need private loans, and they are under no obligation to extend credit.
d) Rodney Dangerfield could’ve done it (although he wasn’t avoiding loans), but he was rich.
Why not? Law schools aren’t above the law. If they really did something wrong, and you’ve got the evidence to prove it, the court will find them as culpable as any other organization. If the evidence isn’t there, the fact that they’re a law school is equally irrelevant.
This isn’t remotely true. Also, state sanctioned schools can claim “sovereign immunity”, which more or less equates to a blank check to do whatever malfeasance they want. In the case of sovereign immunity, the only way the school can be made to answer in court requires that the state legislature passes a bill authorizing a lawsuit. Good luck.
No. As long as the school certifies that the student is enrolled at least half-time, the student’s federal loans go into an in-school deferment. There is no discretion on the part of the servicer, who acts on the government’s behalf, and it’s on the say-so of the school. If the school decides that the one class you’re taking counts as at least half-time, you get the deferment.
Theoretically, it is possible to postpone repayment indefinitely by staying in school at least half-time, and there are people who do that. It’s not an especially good idea because interest continues to accrue on unsubsidized loans. But it can be done.
WRT income-based payment, there is another program called “pay as you earn” that assumes disposable income of 10%, but the catch is you have to have no loans disbursed before October, 2007 and have to have a loan disbursed after October, 2012. There are people who will go back to school to take out loans to get into that program. Whether that’s a smart strategy is debatable, but it’s happened.
Yes, this is what I was asking. I meant the person would be working a full time job, hopefully making decent money. They would take 2 online courses at some community college or some other cheap place per semester, equaling to 6 hours.
Crap. In order to qualify for pay as you earn, the newest loan has to be after October, 2011.
In terms of the school-as-postponement strategy, the most popular option is community college. Most charge a modest tuition, have a lot of classes to pick from, and don’t have strict requirements as to academic progress or admissions. As long as you pass, you’re welcome to stick around for as long as you like.
I’m trying to remember the movie or book where there was a character who had been in college for 10 years or more. His uncle’s will said a trust fund would pay for him while he was going to college, but then he was on his own. By then, the trick was to find courses he could take that did not qualify him for a degree. In the end, the college got fed up and awarded him a PhD based on an essay he wrote for some first-year class.
So roughly the same concept as the OP, but not Student loans.
Once you have completed the course requirements for a Bachelor’s, are you automatically “finished” and have to apply for re-admission? Or can you keep taking (undergraduate) courses until you get tired of it?
I knew a several people who were perpetual part-time students, but they were working to a degree. They would sign up for several courses, but drop most of them before the “drop date” to concentrate on the ones that would guarantee them the better grades. However, they had a goal in mind, it would just take them 8 or 10 years to get there.
As for the “perpetual student”, the college I went to was wide open when I went there in the 70’s. However, a few years later they instituted “streams”. They required a student to register for a specific degree stream and take the courses toward that degree. It was in response to the problem of students that kept taking a variety of courses and qualified for a 4-year degree without being a specialist in any particular topic.
I opened this thread to make this very same comment. As I recall, it was a Roger Zelazny novel, and the college eventually managed to award him a degree in basket weaving.
I imagine all universities are different, but at my alma mater you had to actually apply for graduation. No application, no graduation, no matter what classes you had.
There was a story while in school about some guy at the university of Wisconsin-whitewater that had taken every class offered at the university (took him like 12 years, and was only possible because it was a satellite campus with a smaller course offering). Most colleges won’t let you take the same class twice, unless you failed the first time, so he would be out of luck at that point. I think he did something crazy like quintuple majoring, but the real reason was he didn’t want to join the real world.
Then perhaps this person would be better-situated than most to pay off his loans. I realize this isn’t the question, but since the basis of the premise is that he has no money to pay his loans, I note that in fact, he probably does.
I remember that story – the guy appeared on Letterman – but I don’t remember anything about him taking every course offered. I’d think that even at a fairly small school you’d need more than 12 years to do that.
A little Googling turned up the Wikipedia entry for the guy in question, Johnny Lechner, and it doesn’t say he took every class offered by UW-Whitewater. It looks like it’s not clear whether or not he ever officially graduated, but he’s no longer listed in the UW-Whitewater student directory.
I’ve heard of people doing that. It didn’t make a lot of sense to me. Why not just use the money they spent on the classes to pay off those loans, and use the time to work at a second job?
I have a friend who works at a college and she has been taking classes part time for 10 years years towards her bachelors in Psychology. She is around 50 years old now and has been blocked by her department from taking the one class that would allow her to graduate and move on because it is only offered during her work hours. So she started taking classes towards another degree to keep from paying her loans back.
Since she works at the college she gets a discount on tuition and the fact that they won’t give her a few measly hours of flex time for one semester in order to get even a Psychology degree just shows that they don’t want her to advance in pay. So she figures that she will just keep going to school until she dies or gets a degree at 88.
