The Horrors of Defaulting on a Student Loan

(MoneyWatch)  Don't default on your student loans.

It's hard to imagine getting trapped in a scarier financial predicament.

People who face foreclosure enjoy more rights than Americans who default on their student loan debt. Folks who receive stern letters from the IRS possess more rights than student loan defaulters.

But you don't have to take my word for it. Mark Kantrowitz, the founder of FinAid.org and one of the nation's best-known financial aid experts, had this to say this week about student loan defaults:

"If education debt is evil, then defaulting on your student loans is a one-way ticket to hell.' Borrowers who get into trouble, Kantrowitz added, "are stuck in an oppressive house of horrors with no way out."

In a piece entitled, The Horrors of Defaulting on Education Debt, Kantrowitz wrote seven chilling profiles of student loan borrowers whose lives were ruined by staggering debt. The craziest story of the bunch involves a member of the Air Force, who must repay $150,000 in college student loans even though he never borrowed any money. Someone stole his identity and took out a students loan. The victim is repaying the student loan debt because he might otherwise be kicked out of the military for being financially irresponsible. That's how perverse the student loan laws are!

Kantrowitz's stories clearly illustrate that the draconian student loan laws needs to be overhauled. But is Congress paying attention?

If you or a family member is struggling with student loan debt, I'd urge you to check out the website of Student Loan Borrower Assistance, which is a program of the National Consumer Law Center.

Anyone with a student loan should also visit IBRinfo, which was created by the nonprofit Project on Student Debt. The website informs student loan borrowers about two federal loan programs that can make student debt more manageable.

Defaulting on student loan image by Trenton Schulz. CC 2.0.