Student Loan Counseling Program

Female: Gary Patterson, with Clearpoint Credit Counseling, is here to
explain how it works. What is this, Gary?

Gary: It’s an excellent program. It’s an alliance of core members and
affiliate members, made up. The core members are 8 of the
largest nonprofit credit counseling agencies in the nation with
many, many years and experience in helping people with what we
call ‘the holistic approach to counseling’. In other words, if
somebody would to come to us and they’re concerned about their
student loans, we’d take a look at their housing, their credit
card debt, and thereby, let them know what options they’ve got
to deal with their student loans.

Male: How does one qualify, though?

Gary: You don’t have to qualify as far as getting help, whatsoever. With a
nonprofit agency, the counseling is free. Again, we’re going to
take a look at everything and just let folks know what options
are available to them. Student loans are very complicated.

Female: How bad a problem is it? What’s the average student’s loan
weight when they get out of college?

Gary: About $27,000.

Female: Wow.

Male: That’s a lot of money.

Gary: It’s a huge concern. At a time when they’ve got that education and
they hopefully, but not for sure, have a good job, and then they
have to pay these loans back. It many times will not fit into
that budget.

Male: You got me wondering something, Gary; how long does it typically take
the average person maybe to even pay off a student loan? Is it 5
years, 10 years, 15?

Gary: To give you an idea . . .

Male: Give us an idea.

Gary: To give you an idea, there are federal programs that will allow you
to pay payments on your student loans, and then after 20 or even
25 years, the balance is taken away. It can take a lifetime.

Female: Wow. It is not . . . if God forbid, things get really bad and
you have to file for reorganization, you also can’t include
student loan debt in a bankruptcy.

Gary: You cannot. Student loan debt is very unique in this. It cannot be
discharged at bankruptcy. In other words if you fall past due,
you can’t file bankruptcy on it and your wages could be
garnished. Here’s another interesting thing that’s unique to
student loans: You can have your Social Security check garnished
as an elderly person.

Female: Oh, my gosh.

Gary: Back in 2012, 115,000 seniors got their Social Security checks
garnished for student loans.

Male: You have got to be kidding me.

Gary: It affects all generations.

Female: It takes that long to pay it off; the fact that it’s still
there.

Gary: Oftentimes what happened, though, is that parent may cosign or sign
for their student, and then it takes the rest of their lives to
pay those off.

Male: Gary, who is this also impacting these days? Is this . . . people
naturally assume its low-income students. Is this middle income
or whom?

Gary: Everyone. Because these days, you need that degree just to be able to
compete in the job market. In other words, you could have low-
income people; you could have high-income people, middle-income
people. You need to get that education. Student loan is a good
debt to have, provided that you use it wisely. Get the education
and then get that job. It affects everyone.

Female: The problem is in this economy, the jobs are shrinking so you
may be . . . what do you advise someone who is getting out of
school, maybe this is their last year? Should they go ahead and
look at the Alliance immediately, before they get into trouble?

Gary: Certainly. Here’s why: Because we can help them to develop a budget
plan, let them know what type of housing they can afford, what
type of car payment they may or may not be able to afford?
Because they get out of college and think, “I can afford all
these nice things,” and then they damage their credit. It’s
interesting; 27% of $1 trillion in student loans are past due.
That affects your credit and can cause you not to get that job.
Your options run out.

Male: Should one even consider the Alliance as they are enrolling as a
student, period?

Gary: It’s a good idea. I often tell young folks when they’re starting
college, “Just get what you need. Don’t live off of student
loans.” Some degrees, of course, somewhat forbid students from
working because they take a lot of time to do their studies. If
you can work your way and subsidize your own student loans
through college, you’ll get out of school with a lot less debt.

Female: Perfect. Thank you so much. All the links to the Student
Alliance and to Clearpoint will be online, at WRG.com.

Male: Gary, thank you.

Female: It’s a lot to think about.

Male: A lot to think about.

Female: Glad we went to college when it was reasonable.

Male: That’s it, during the Flintstones era.