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While Corey and Shawna have $350,000 of debt, Suze says it is not all truly negative debt. "There's a big difference between student loan debt and credit card debt," she says. "Student loan debt is an investment in who you are today and who you want to be tomorrow. Credit card debt however, my dear friends, is you are paying for your present day desires, but your costs will be your future day needs. Oh, what kind of needs? Like feeding that baby."

Suze says when they duck collection calls from student loan lenders they're actually making those lenders very happy. "A private student loan is at about a 10 1/2 to 16 percent interest rate that compounds. That $100,000 is going to go to $200,000. It's going to go to $400,000."

Even bankruptcy can't save you from student loan repayment. "You cannot, in 99 percent of the circumstances out there, ever bankrupt a student loan," Suze says. "You can never get rid of it in bankruptcy unless there's some tremendous hardship, which you are not in, and that means that eventually they have the ability to come and garnish your wages, sir," she says. "And yet you think you're getting away with something when you don't answer the phone?"
FROM: Money Interventions: The Mom Who Shopped Her Family Broke
Published on January 01, 2006


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