Published 02/06/13 2:56pm

Penn Suing Over Student Loans


Here's a cautionary tale: Penn, and other higher ed institutions, are suing students that default on their loans.

According to a Bloomberg.com article, schools often sue over the repayment of Perkins government loans, which have low interest rates and a nine-month grace period after graduation. Perkins loans also come from a revolving fund, meaning that they depend on repayment to be a sustainable source of financial aid. Penn students that do not repay their Perkins loans within 120 days of initial delinquency risk lawsuit.

It's worth noting that most schools taking matters to court--including Penn--do so only as a last resort, after issuing warnings and analyzing each individual's financial situation, and even threatening further fees. Still, that nine month window seems a pretty short time in which to (a) get hired and (b) save up enough to both live like a human being and repay your college debt. Also, the legal process seems financially fruitless if the former students don't have the money in the first place.

The bottom line as we see it: It costs too darn much to go to college these days, and student loans need to be a little more realistic about student trajectories. Which reminds us, does anyone know Ron Perelman's cell number?

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