The consequences of not paying can be very severe.

One point I might have missed in the video, since I skipped 30 seconds here and there to get through some of the repetitious parts, is the total amount of debt you would be carrying if you don't decide to pay your student loans down.

Even if you are able to get really low student loan payments approved, that one debt is not the whole picture.  When applying for a mortgage, a business loan or other large financial commitment, your debt-to-income (DTI) ratio is a major factor in getting approved.  If you don't have a large enough down payment or high enough income, you're either going to be denied the chance of owning your 'dream home' or be forced to pay for mortgage insurance -- something that's a complete rip-off and may be more than you can afford on top of the mortgage.

So, if your DTI is too high because of your student loans, car loan, credit card debt and so forth, you're going to have to decrease your total debt load by paying some of that debt off and/or increase your income or down payment amount. 

I once knew a Captain in the Air Force who bought a very nice house in Oklahoma City just before prices fell.  He was eating PBJ sandwiches almost every day and never had the money to even go to lunch once a month at the Officer's Club (which was actually inexpensive).  The lesson there is, even if you can squeak underneath the DTI ratio requirement, if something changes in your life (wife gets pregnant and can't work, etc.) your income can go down or your debt go up.  That puts you in a position of a possible foreclosure.

As long as that student loan is hanging over your head, your options diminish and your risks multiply.

"A high debt-to-income ratio was the most common primary reason for mortgage denials
in 2020, according to a NerdWallet analysis of federal mortgage data."
https://www.nerdwallet.com/article/mortgages/debt-income-ratio-mortgage

One point I might have missed in the video, since I skipped 30 seconds here and there to get through some of the repetitious parts, is the total amount of debt you would be carrying if you don't decide to pay your student loans down.

Even if you are able to get really low student loan payments approved, that one debt is not the whole picture.  When applying for a mortgage, a business loan or other large financial commitment, your debt-to-income (DTI) ratio is a major factor in getting approved.  If you don't have a large enough down payment or high enough income, you're either going to be denied the chance of owning your 'dream home' or be forced to pay for mortgage insurance -- something that's a complete rip-off and may be more than you can afford on top of the mortgage.

So, if your DTI is too high because of your student loans, car loan, credit card debt and so forth, you're going to have to decrease your total debt load by paying some of that debt off and/or increase your income or down payment amount. 

I once knew a Captain in the Air Force who bought a very nice house in Oklahoma City just before prices fell.  He was eating PBJ sandwiches almost every day and never had the money to even go to lunch once a month at the Officer's Club (which was actually inexpensive).  The lesson there is, even if you can squeak underneath the DTI ratio requirement, if something changes in your life (wife gets pregnant and can't work, etc.) your income can go down or your debt go up.  That puts you in a position of a possible foreclosure.

As long as that student loan is hanging over your head, your options diminish and your risks multiply.

"A high debt-to-income ratio was the most common primary reason for mortgage denials
in 2020, according to a NerdWallet analysis of federal mortgage data."
https://www.nerdwallet.com/article/mortgages/debt-income-ratio-mortgage

but
I wonder if students are told this prior to deciding to take out a huge debt and get a BS degree that won't make them enough money to pay this down?  As in not in the fine print. but someone verbally in the loan department said it.

THe other problem is that the feds give out this loan pretty much no questions asked. I mean could a 18 year old with no job get a $500K loan to buy a Lambo? No way.

but
I wonder if students are told this prior to deciding to take out a huge debt and get a BS degree that won't make them enough money to pay this down?  As in not in the fine print. but someone verbally in the loan department said it.

THe other problem is that the feds give out this loan pretty much no questions asked. I mean could a 18 year old with no job get a $500K loan to buy a Lambo? No way.

Here's the scheme:

Every prospective student submits a Financial Assistance application when they apply for admission to the school.  If not then, at least when they get accepted.

Once the application is reviewed, they will identify if you qualify for grants, work-study or other financial assistance.  if you don't -- usually because your parents make too much, then they always, and without exception as far as i can tell, say you were "approved" for a student loan and/or parent-of-student loan.

So, you're sent to a website to fill out the loan information.  Shortly before the semester begins, you get either a check or direct deposit for not only tuition, books and fees, but for even more to pay for living expense.  A school that costs $9K/semester could easily run a person into $15K of debt.  That's just one semester.

Interest normally acrues, but you aren't required to make payments until a certain amount of time after you are no longer a student.  I think that happens after 6 months, whether you graduated or dropped out.  If you are no longer carrying a full or part time student workload, you have to start paying back.

The number of disclosures is rather large.  To answer your question, the student is told every semester in which they increase their debt how this affects them.  Of course, there's no judgement  based on the degree being sought -- just that you are classified a full or part time student. 

Not every student is in the same situation.  Some can afford to get garbage degrees, because mommy and daddy will wind up paying the loans for them.  Some elect to continue on to post-graduate work so they can continue kicking the proverbial can down the road before starting payments.  I guess they figure a Masters degree will ensure a better paying job, and hence more to help pay the debt.

I'm also sure there are some who trusted Grandpa Joe would forgive their debt, so they piled on as much as the lenders would let them in advance.  Now they are probably regretting that tactic. 

Speaking of Grandpa Joe, his student loan forgiveness proposal was nothing more than a
vote buying scheme. The devil is in the details. One of the requirements of his plan is that you
need to have been making payments for at least 20-25 years in order to be eligible. When
Brandon announced his plan, it gave many of those with this debt nothing but false hope.

Speaking of Grandpa Joe, his student loan forgiveness proposal was nothing more than a
vote buying scheme. The devil is in the details. One of the requirements of his plan is that you
need to have been making payments for at least 20-25 years in order to be eligible. When
Brandon announced his plan, it gave many of those with this debt nothing but false hope.

And the next dnc runner will make the same BS statement and get college students and grads who are morons to vote for them.

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