TRUTH IN LENDING The student loan bubble is about to burst due, in my opinion, to the same predatory banking practices that brought us the Great Recession of 2007 and the Mortgage Bubble that preceded that. True, I took the maximum time to pay off my student loans because the interest rates were favorable, but I made all of the payments on time and completely dispatched my duty as a borrower. In the last 60s when I graduated from college, decently paid jobs were easy to come by and prices were low. My grad school tuition at an Ivy League school cost $2,000 per year for full time study. Now the same tuition would be about $70,000 per year. I could never afford to enroll in my alma mater today, nor even to send my children there without scholarships. I find it unconscionable that graduates who cannot find decent jobs are having their lives destroyed because they could neither afford health insurance nor to pay off their loans. It is high time that student debts be discharged because of predatory loans. The unfairness toward the 99% of the 1% continues to undermine the future of Main Street to the benefit of Wall Street. If we want our nation to survive, we must change the formula with all due haste!
2
This country was settled in part by people who were escaping from debtors' prisons, and our Constitution contemplates that there will be laws for bankruptcy. The current bankruptcy code is less about relief for people who are weighed down by tremendous debt, and is more about protecting creditors - although many creditors are like vampires, sucking blood out of people who barely scrape by. Credit cards at 22% interest, student loans for fly-by-night on-line facilities whose degrees are worthless - it is high time that the current law be revised. Debtors are treated like criminals. Let's get back to something that allows people a fresh start.
1
It's pretty obvious that student debt has become the elephant in the room.
We can argue about whether students should be allowed to accumulate such huge debt, especially when their job prospects are so weak. But the more important question is, what do we do about the drag that existing student debt is causing to the economy?
Ok, I know what conservatives will say "No one put a gun to the student's head to go into debt for college." But in fact, that's exactly what happens when kids are told from the time that they are 5 years old that going to college is the key to the middle-class dream. What are kids supposed to do when they are told that? How many would say, "No, thanks Mom & Dad, I'd rather work at Burger King and make minimum wage."
The point is, we need to get rid of existing student debt and come up with a national plan for financing college that leaves kids with no debt at all upon graduation.
Think of it this way, if we would simply be investing in our economy by allowing college graduates to buy cars and homes rather than pay off inflated college debt. That scenario would be good for both democrats and republicans.
We can argue about whether students should be allowed to accumulate such huge debt, especially when their job prospects are so weak. But the more important question is, what do we do about the drag that existing student debt is causing to the economy?
Ok, I know what conservatives will say "No one put a gun to the student's head to go into debt for college." But in fact, that's exactly what happens when kids are told from the time that they are 5 years old that going to college is the key to the middle-class dream. What are kids supposed to do when they are told that? How many would say, "No, thanks Mom & Dad, I'd rather work at Burger King and make minimum wage."
The point is, we need to get rid of existing student debt and come up with a national plan for financing college that leaves kids with no debt at all upon graduation.
Think of it this way, if we would simply be investing in our economy by allowing college graduates to buy cars and homes rather than pay off inflated college debt. That scenario would be good for both democrats and republicans.
4
The judge wrote "the current standard does not allow it.”"
Hmm
The law does not allow a lot of things, bt judges from the Supreme COurt on down feel free to "interpret" law to allow what they wish.
Why, then, have not they not done so in these types of cases?
Could it be due to . . .financial . . . considerations?
Hmm
The law does not allow a lot of things, bt judges from the Supreme COurt on down feel free to "interpret" law to allow what they wish.
Why, then, have not they not done so in these types of cases?
Could it be due to . . .financial . . . considerations?
1
Sad thing is when you get a loan to go to one of those " WE HAVE JOBS JUST BEGGING FOR YOU!!" colleges and having them declare bankruptcy before you graduate leaving you with no education, no job, and a stack of debt!
1
Hey, I have a brilliant idea! Let borrowers refinance their loans! Restructure and slash the usurious interest rates!
Gee, I bet that just might make a difference.
Give our kids and their parents the same opportunity that you gave big banks.
Gee, I bet that just might make a difference.
Give our kids and their parents the same opportunity that you gave big banks.
3
If student loans can be easily discharged in a bankruptcy it will be harder for many to get a student loan. Liberals need to learn again that there is no free lunch or free tuition..........
These actions by the Bush administration & the GOP have done more to increase the cost of college education then anything else. The sky can be the limit in costs because the debtor is stuck with them even if the higher education institution totally mislead the student, .Oh, yes and cut public funding for public colleges forcing up individual costs and give tax breaks to the top 1%. Many states spend more on prisons than higher education. Or make like Florida and Georgia (thanks JEB and the GOP for cutting all school spending) that increased college tuition to public colleges, but set up a tuition scholarship that goes overwhelmingly to middle class students because its not based on need.. This has happened by accident? Of course not. Why are these debts permanent but not others?
6
Thanks for letting me know that this is George Bush's fault nearly 7 years into the Obama presidency. Bottom line is that the Federal government guarantees these loans and is on the hook for them. Rest assured, if banks were responsible you could discharge them in bankruptcy like other loans. But since it will cost the taxpayer you can't discharge them. Pretty simple - sorptive like trying to get out of tax debt from the IRS. Good luck.
1
I'd be so very, very glad when one or both of the following things happen:
1. The GOP becomes extinct and the Left Wing doesn't have any more competition in the race to be the worst at policy making and governance, and they're cornered into taking responsibility for all the chaos caused by their stupid philosophies - OR -
2. People finally realize that both parties are the same (differing only in the lies they tell at campaign season) and decide to throw them both overboard.
1. The GOP becomes extinct and the Left Wing doesn't have any more competition in the race to be the worst at policy making and governance, and they're cornered into taking responsibility for all the chaos caused by their stupid philosophies - OR -
2. People finally realize that both parties are the same (differing only in the lies they tell at campaign season) and decide to throw them both overboard.
1
I believe that you are incorrect. But even if you weren't, why shouldn't debts be discharged, as they used to be? And why is it that education is only for the rich? You seem to think debtors are not worthy of a fresh start, but I say they are, regardless of who the creditor is. Most debtors got themselves in a bad way through bad luck or bad judgment, not because they are criminals.
1
In today's age of frothy entrepreneurial gatherings I heard a Twitter founder solemnly state that "everyone is an icon" which resulted in raucous applause. Reality unfortunately differs greatly. At every step a person seeks to invest in themselves the IRS rules severely limit a person's ability to write off the interest of student loans. Trying to start a new career? Too bad not allowed. Even if a person passes that first test where they are simply upgrading their skills and remaining in their present career, they may be tripped up by the Adjusted Gross Income limitations, and God forbid should they be married and filing separately, or if some Tax Court can argue that the new education actually offers avenues to a new career.
Ultimately, in an age where corporations can declare bankruptcy, readily shed billions of debt, erase labor contracts, and rise like a sleek Phoenix, ---in some cases, with the largesse of taxpayer funded bailouts because they were Too Big To Fail, the American citizens with student debt are told not only to eat cake, but to pay multiples of it as well. While declaring bankruptcy to discharge student loans is possible it is highly improbable. Student loans are the modern day debtor prison that would have made even Charles Dickens marvel at the genius of it all.
Ultimately, in an age where corporations can declare bankruptcy, readily shed billions of debt, erase labor contracts, and rise like a sleek Phoenix, ---in some cases, with the largesse of taxpayer funded bailouts because they were Too Big To Fail, the American citizens with student debt are told not only to eat cake, but to pay multiples of it as well. While declaring bankruptcy to discharge student loans is possible it is highly improbable. Student loans are the modern day debtor prison that would have made even Charles Dickens marvel at the genius of it all.
6
Banks need to recognize and admitt the risk of the non-secured loans.
there really needs to be a cap on the total balance of the student loan - say 140%. in addition, there should be real measures to control the cost of college - like impose a requirement that universities must spend no less than 80% of all tuition and mandatory fees on education and direct housing. the increase in the cost of higher ed is due to an absurd level of bureaucracy and "overhead" that is funded by a bottomless pit of debt.
2
Get rid of the exorbitant interest rates and fees, and that will probably cut the loans in half, thereby enabling more to pay them back. When 15 years of your monthly $350 payments don't ever touch the principal, how can anyone expect the loan to be repaid?
9
The federal government is the one making the vast majority of the loans. Banks are mere intermediaries.
1
A college degree is like what a "union card" was in the dim past. Without it, you are lost. The colleges know this and have jacked up the fees to make sure they soak the students. Since 2008, there are fewer jobs, and the jobs that there are out there, pay less. So the student debts are going to hang around the former students necks until they die.
3
Doesn't it feel great to use someone else's money for charity?
3
A loan may be considered usurious because of excessive or abusive interest rates.
3
The idea that a decent education requires charity is sick. At least Germany has figured that out.
1
What is often missed in the entire student loan debacle is the fact that most borrowing has nothing to do with paying tuition and fees, but is pocketed as a "living expense" allowance. It is not uncommon to see a student exceed $90K in debt for a $30,000 program for example. Unfortunately, this is perfectly legitimate based on the federal definition of "Cost of Attendance" which includes "indirect cost" (room and board, transportation and other expenses, even if the enrollment is 100% online and those expenses have nothing to do with their enrollment), the exorbitantly high graduate loan limits, and lack of any kind of Graduate Plus loan limit. In addition, the heaviest borrowers are typically 30+ adults completing unnecessary 2nd and 3rd Master's degrees, not innocent 18-24 year olds being "victimized" by lenders as is often portrayed in the media. Income based repayment plans make this problem even worse, since it eliminates any incentive for the student or the school to reduce borrowing. Clearly the loan limits need to be lower and all borrowing is not necessary.
4
The main issue with the way student loans work are the same way that restrictions that have/had existed in various other areas of personal debt.
The strictures put in place to protect lenders from borrowers defaulting ended up backfiring. The very conditions that were put in place to discourage default ended up driving borrowers into death spirals. This happened with credit card debt before new rules were put in place to ban predatory practices. It happened when the banks refused to adjust loan balances to match market valuations after the real estate market crash. It happens when interest rates on student loans cannot be refinanced to our current lower rates or be discharged through bankruptcy.
Ultimately, the hangover from all of this debt has created a situation that has been a huge drag on the U.S. economy for many years. Yet, the financiers can create the biggest asset bubble in history and let it pop destroying their balance sheets and get away without having to comply with the conditions of their original charters or be responsible for paying off their counter-party contracts.
It is a double standard. This is not only an affront to people's sense of justice. It is also an economic policy disaster. The opportunity cost of upholding these regulations have done more damage to the economy and people's lives than they have saved in terms of debt recovery. This is the Vulture Economy.
Insanity is repeating oneself and expecting a different result. Power over logic.
The strictures put in place to protect lenders from borrowers defaulting ended up backfiring. The very conditions that were put in place to discourage default ended up driving borrowers into death spirals. This happened with credit card debt before new rules were put in place to ban predatory practices. It happened when the banks refused to adjust loan balances to match market valuations after the real estate market crash. It happens when interest rates on student loans cannot be refinanced to our current lower rates or be discharged through bankruptcy.
Ultimately, the hangover from all of this debt has created a situation that has been a huge drag on the U.S. economy for many years. Yet, the financiers can create the biggest asset bubble in history and let it pop destroying their balance sheets and get away without having to comply with the conditions of their original charters or be responsible for paying off their counter-party contracts.
It is a double standard. This is not only an affront to people's sense of justice. It is also an economic policy disaster. The opportunity cost of upholding these regulations have done more damage to the economy and people's lives than they have saved in terms of debt recovery. This is the Vulture Economy.
Insanity is repeating oneself and expecting a different result. Power over logic.
3
A couple observations to my fellow commenters:
1. The view that because corporations can file BK and "discharge" their debt, so should student loan debtors => when a company files BK typically the (depending on the value of the company), the creditors become the new owners of the company - their debt is converted down into equity. So if individuals were to be treated as companies in BK, your creditors would basically become your "owners" - not sure thats what you want either
2. The interest rate of the student loans reflect the risk of repayment taken by the creditor. While it seems that because they can not be discharged, the creditor is guaranteed to get their money back - this simply isn't true in that some people do not pay, and there is a time value of money and cost associated with actually collecting the loan plus interest. The lenders need to, at some level, be compensated for this.
Alternatively, if student loans were able to be discharged in BK, you'd see interest rates similar or greater to those of creit cards - think 25-30%. This clearly would be unsustainable as everyone would choose to file BK, no loans would be made and student lending would evaporate.
Which, interestingly, without the debt fueld bubble in tuiton prices, would probably cause colleges to cap their costs increases....which is the other part of the puzzle
1. The view that because corporations can file BK and "discharge" their debt, so should student loan debtors => when a company files BK typically the (depending on the value of the company), the creditors become the new owners of the company - their debt is converted down into equity. So if individuals were to be treated as companies in BK, your creditors would basically become your "owners" - not sure thats what you want either
2. The interest rate of the student loans reflect the risk of repayment taken by the creditor. While it seems that because they can not be discharged, the creditor is guaranteed to get their money back - this simply isn't true in that some people do not pay, and there is a time value of money and cost associated with actually collecting the loan plus interest. The lenders need to, at some level, be compensated for this.
Alternatively, if student loans were able to be discharged in BK, you'd see interest rates similar or greater to those of creit cards - think 25-30%. This clearly would be unsustainable as everyone would choose to file BK, no loans would be made and student lending would evaporate.
Which, interestingly, without the debt fueld bubble in tuiton prices, would probably cause colleges to cap their costs increases....which is the other part of the puzzle
4
If you can't afford Columbia or NYU then attend a city college or state system school were tuition is significantly less. If you can't afford room & board then go to college locally. New York City and State have some of the finest public colleges in the nation; givernment should assist qualified students in attending public colleges! If one chooses an elite college with high costs then they should be held responsible for their debts. I recall an interview with adebtor during the Occupy Wall Street demonstrations who stated that she went to Columbia for a degree in social work and her low social worker salary prevented her from paying off the loan and wanted the givernment to cover her debt. When asked why she incurred the debt when she knew that social work would not pay enough to payoff the the debt she stated that she wanted to go to Columbia. My taxes should not be used to indemnify a spoiled brat; my children went to good schools, both public and private, and all expenses were paid by two working parents.
11
Exactly! I agree. I hear the most absurd things from young people. They want to go to school that costs 40K a year to study English Literature and Art History and Sociology or teaching. Lets get real hear. That girl should have went to a CUNY school like I did and she would have gotten an excellent education in the field of social work for about the cost of a year at Columbia, even if none of it was covered by financial aide. People have got to have realistic conversations with their children about the cost of education vs actual earning potential. If you want to work in a field that doesn't pay much that's fine, but you need to the best education you can get at the lowest price possible. There comes a point when you are paying more for the reputation of the school than the actual quality. But no employer will pay you more than what your skills and experience are worth just because you went to a high priced private school.
7
If you had gone to a better school, you'd have known better than to write, "that girl should have went." Not all schools are created equal, and there can be real personal and professional benefits to going to a better school. What should concern us is the unlimited availability of cash to fund this, which results in hyper inflated costs.
2
What people get by attending a "high priced private school" that others do not get attending state educational facilities is social capital. It is necessary to get better jobs and acceptance at better graduate schools. Who you know can open gates that would otherwise be marked "closed". The right letter from a renown professor can make all the difference in having your application stand out from the crowd. Needless to say, the "right" connections can open doors to jobs in the same manner.
People who are ambitious try to get in to the most prestige university for those reasons. Had Obama attended Podunk U and got his law degree from an on-line source, he wouldn't be where he is or anywhere near it.
If what you want is an ordinary job earning an ordinary salary, most any accredited school will get you there. Everyone should stay as far away as possible from non-accredited schools, even if they tell you they will have accreditation "soon".
People who are ambitious try to get in to the most prestige university for those reasons. Had Obama attended Podunk U and got his law degree from an on-line source, he wouldn't be where he is or anywhere near it.
If what you want is an ordinary job earning an ordinary salary, most any accredited school will get you there. Everyone should stay as far away as possible from non-accredited schools, even if they tell you they will have accreditation "soon".
2
The real issue is the cost of education and the system in place for
financing. The "private" and government student loan servicing industry returns billions to investors, in a large part thanks to outrageous "loan rehabilitation"
fees, late fees and the specter of never being able to erase the debt because of laws passed by Congress to protect student loans from bankruptcy resolution. It is a classic case of eating one's children to stay alive.
I have experienced it first hand. A better solution would be for government money spent on the loans to go direct to the colleges and tuition to be free.
I have family members who will not be investing in homes & furnishings, the market, cars, travel etc. until they are in their thirties or forties. They have good jobs and are paying their loans. The drag on them for loans is also a drag on our economy and undermines our collective future. If they have children, their children will be like-wise indentured because their parents will be unable to create wealth while they were young.
Hurf Sheldon
N. Lansing NY
financing. The "private" and government student loan servicing industry returns billions to investors, in a large part thanks to outrageous "loan rehabilitation"
fees, late fees and the specter of never being able to erase the debt because of laws passed by Congress to protect student loans from bankruptcy resolution. It is a classic case of eating one's children to stay alive.
I have experienced it first hand. A better solution would be for government money spent on the loans to go direct to the colleges and tuition to be free.
I have family members who will not be investing in homes & furnishings, the market, cars, travel etc. until they are in their thirties or forties. They have good jobs and are paying their loans. The drag on them for loans is also a drag on our economy and undermines our collective future. If they have children, their children will be like-wise indentured because their parents will be unable to create wealth while they were young.
Hurf Sheldon
N. Lansing NY
2
I would argue that paying any kind of debt is a drag on the economy since it can't be spent elsewhere. Car and health insurance is a drag too.
1
The definition of the word "loan" needs to be changed because it appears that everyone from governments (Greece and Puerto Rico) to individuals who borrowed money to finance their education feel that their debts should be reduced or written off.
When one borrows money, whether it be for a house or car or education it is with a very clear contract to repay the money. Society can't function if borrowers are permitted to simply say that it will cause a hardship to repay what they owe.
Everything in life has risk to it. The inability to get a job in one's chosen field is no excuse for not paying back the money the individual borrowed.
When one borrows money, whether it be for a house or car or education it is with a very clear contract to repay the money. Society can't function if borrowers are permitted to simply say that it will cause a hardship to repay what they owe.
Everything in life has risk to it. The inability to get a job in one's chosen field is no excuse for not paying back the money the individual borrowed.
6
The nation needs an educated populace. The government should get out of the finance business of education which if it did then the prices of a college education would be lower because the universities would not be dependent on the sure thing of a loan from students. Also some foreign students do get breaks from our universities that other students cover with paying higher tuition that makes the costs high. Most people would probably disagree with me but I think college education should be free because your citizens represent what type of country you one to be. The one exception being like most of Europe that one must merit a college educated through passing exams like the BAC in France. Oops. that will mean that everyone will have to do their jobs from the parents to the public school officials from birth to 12 grade to prepare kids to take such exams. Those who do not merit a chance to go to college can be trained in a vocational feel that will enable them to support themselves with a little bit of lit, hist., etc. thrown in to produce a balanced person fro society.
2
I agree. The Income Based Repayment plan is essentially chapter 13 bankruptcy, except payments are over a longer period with the balance forgiven at the end. There's no incentive to reduce borrowing since the borrower is insulated from fully paying the loans.
When I went to college in the 70s, tuition was free at community colleges, and around $100-125 a semester in the Calif State Universities.
What happened?
TaxCut fever arrived in the 80 with Reaganomics & the Gingrich/Norquist Revolution. Cut the size of Government? Stop supporting public college, nobody wants to raise taxes to keep tuition low.
College Administrators, Sports Coaches, (but not profs) need to be paid like rockstars.
All campuses are loaded down with 5-star resort amenities, that supposedly students & parents 'demand'.
In every state, 80% of the colleges should be No-Frills, No Sports Teams, only intramural. No Admins or ANYONE, makes more than $125k/year. No endless diversity staffs. Everyone pays, no student athletes, no cost-shifting.
Running for Governor? Promise that 80% of the colleges will cut costs by 60%. OR ELSE.
What happened?
TaxCut fever arrived in the 80 with Reaganomics & the Gingrich/Norquist Revolution. Cut the size of Government? Stop supporting public college, nobody wants to raise taxes to keep tuition low.
College Administrators, Sports Coaches, (but not profs) need to be paid like rockstars.
All campuses are loaded down with 5-star resort amenities, that supposedly students & parents 'demand'.
In every state, 80% of the colleges should be No-Frills, No Sports Teams, only intramural. No Admins or ANYONE, makes more than $125k/year. No endless diversity staffs. Everyone pays, no student athletes, no cost-shifting.
Running for Governor? Promise that 80% of the colleges will cut costs by 60%. OR ELSE.
9
"When I went to college in the 70s, tuition was free at community colleges, "
You mean the student did not pay tuition.
Someone paid your tab and it sounds like they tired of doing so.
"No endless diversity staffs. "
Yeah, right, that's going to happen.
You mean the student did not pay tuition.
Someone paid your tab and it sounds like they tired of doing so.
"No endless diversity staffs. "
Yeah, right, that's going to happen.
1
My dual-national son was accepted to a prestigious Ivy League college with a "generous" financial aid package including $25K per year in loans (=100k total), with a higher than market interest rate accruing immediately. I went to university in the US, but I had 2.5K in loans per year for a total of 10K, and no interest accrued while I was in college or graduate school. I was able to pay back the loans easily even on my measly professor's salary. Things have really changed for the worse in the US. My son is now attending university in Europe for free.
8
What is"due hardship"? Perhaps if judges focused on this question they might make some headway. Due hardship might be seen as the hardships reasonably anticipated when the loan was taken out. Specifically if the entity urging an aspiring student to take out a loan promised or strongly implied that the education received would lead to certain kind of jobs and allow them to secure a certain level of income "due" hardships would be hardships that might be anticipated if those expectations had been fulfilled. Hardships beyond this would be undue unless the student had not diligently pursued his or her studies, not sought a job in an area for which he/ she had become qualified, etc. Applying this perspective would require lots of tweaking and allocations of proof burdens that there is no space to lay out here. What should be clear is that this perspective would go a long way toward disciplining those schools that induce students to train for jobs unlikely to exist or do not provide degrees with the value they have been asserted to convey.
Our universities share the blame, and the greed. For every dollar in student loans over the past ten years, universities raised tuition by 55 cents.
6
Isn't the real problem here OVERLENDING? why on earth loan someone 50% of the likely future income? Who could repay that? They don't loan mortgages like that!
And the loans need to be considered in light of what the student is studying, as well as their history of academic success -- why loan money to a D student who is highly likely to drop out? Why loan money to someone studying Art History or Gender Studies, which have a very low chance of landing that student a decent paying job -- whereas a loan for medical school is a GUARANTEE of full payment!
We are not using common sense here. I also sense a return to the "bad old days" when new graduates routinely defaulted on payable loans, just to avoid having to pay for what they had consumed -- I remember reading that it was a routine scam for someone to finish medical school owing $60K and up (this was the 70s, and that was a fortune) and then wipe the debt out in bankruptcy court -- after which, they landed themselves a nice six-figure job.
The examples shown here are disturbing -- why can't a paralegal find a job AT ALL? this field is booming. Why couldn't she take ANOTHER job and make at least partial payments? It sounds like she dropped out of the work force ENTIRELY at age 43 -- why? without answering that, it sounds like a scam.
Or the woman who took out loans to pursue a teaching degree in her 50s! most teachers retire at that age. These folks should have never been lent money in the first place.
And the loans need to be considered in light of what the student is studying, as well as their history of academic success -- why loan money to a D student who is highly likely to drop out? Why loan money to someone studying Art History or Gender Studies, which have a very low chance of landing that student a decent paying job -- whereas a loan for medical school is a GUARANTEE of full payment!
We are not using common sense here. I also sense a return to the "bad old days" when new graduates routinely defaulted on payable loans, just to avoid having to pay for what they had consumed -- I remember reading that it was a routine scam for someone to finish medical school owing $60K and up (this was the 70s, and that was a fortune) and then wipe the debt out in bankruptcy court -- after which, they landed themselves a nice six-figure job.
The examples shown here are disturbing -- why can't a paralegal find a job AT ALL? this field is booming. Why couldn't she take ANOTHER job and make at least partial payments? It sounds like she dropped out of the work force ENTIRELY at age 43 -- why? without answering that, it sounds like a scam.
Or the woman who took out loans to pursue a teaching degree in her 50s! most teachers retire at that age. These folks should have never been lent money in the first place.
7
Because each of those loans is a cash cow.
But people keep bringing up gender studies as though there are hordes of gender studies majors out there starving in the streets.
http://nces.ed.gov/programs/digest/d12/tables/dt12_317.asp
In 2010-11, 0.53% of bachelor's degrees were conferred in the entire group of area, ethnic, cultural, gender, and group studies, combined.
But people keep bringing up gender studies as though there are hordes of gender studies majors out there starving in the streets.
http://nces.ed.gov/programs/digest/d12/tables/dt12_317.asp
In 2010-11, 0.53% of bachelor's degrees were conferred in the entire group of area, ethnic, cultural, gender, and group studies, combined.
3
There are two relationships the state should never have with the citizen: that of executioner and creditor. For all the cry about forgiving foreign aid debt, mass student loan forgiveness should be championed here at home.
This would not only spur the economy, but reinvigorate a sense of citizenship among our population. Spending the rest of one's life in indentured servitude in exchange for a few years' worth of college classes does not sound like the American Dream.
To those who would decry the irresponsibility of the suggestion, I'll trade you the federal student loan program altogether. We'll close it down in exchange for forgiveness, and instead provide free college at public institutions for those students who can earn and maintain the right grades. Universities can provide additional scholarships if they have the means, and private loans can still be made (though they would be dischargeable in bankruptcy courts).
Trade schools and meaningful jobs would handle the rest. We need to redefine what a university education is all about--it shouldn't be a four year summer camp or a place to get a marketing degree. And it shouldn't foster billion dollar athletic programs at the expense of real academics.
Above all, it shouldn't be a place where you mortgage the rest of your life like some Old Testament morality play.
Our goal should be to wipe all student loan off the books--one way or another--within the next decade.
This would not only spur the economy, but reinvigorate a sense of citizenship among our population. Spending the rest of one's life in indentured servitude in exchange for a few years' worth of college classes does not sound like the American Dream.
To those who would decry the irresponsibility of the suggestion, I'll trade you the federal student loan program altogether. We'll close it down in exchange for forgiveness, and instead provide free college at public institutions for those students who can earn and maintain the right grades. Universities can provide additional scholarships if they have the means, and private loans can still be made (though they would be dischargeable in bankruptcy courts).
Trade schools and meaningful jobs would handle the rest. We need to redefine what a university education is all about--it shouldn't be a four year summer camp or a place to get a marketing degree. And it shouldn't foster billion dollar athletic programs at the expense of real academics.
Above all, it shouldn't be a place where you mortgage the rest of your life like some Old Testament morality play.
Our goal should be to wipe all student loan off the books--one way or another--within the next decade.
11
I assume you are one of the irresponsible people who didn't have the sense to know what you could reasonably pay back and now you want other taxpayers to bail you out.
1
Most student loan borrowing is for personal expenses. Should we wipe all that out too?
Borrowing of monies for college is the same as borrowing for anything else. You buy a car, you make the payments. Debt is the responsibility of the student. Taxpayers should not be held responsible for students stupidity. Calculate the ration of borrowing to payback. Simple process. Dollar sense begins before college.
I graduated from NYU with an MA in '98. I had a decent enough salary to pay the loan back ( borrowed 35K). Loan got sold to Sallie Mae. I got sick four years later, had to go on medical leave & lost my position at my job which I just started and didn't qualify for short-term disability. I deferred the loan for 9 years AFTER FILING FOR BANKRUPTCY IN 2004 and the loan was not purged. I finally was able to work a regular 40 hr work week and jumped on the income-based-repayment plan. MY LOAN IS NOW $90,000 due to capitalized interest. Do I see an end to this vicious cycle? No. My bankruptcy was not due to poor handling of bills. I was very sick for a very long time. Had there been some kind of clause for medical bankruptcy I think there would have been a better outcome. I pay my bills. I don't drive a fancy car or live outside my means. I have a credit card for emergencies and do not over-spend.
For a loan that started out at $35K and now 17 years later is three times the size...and I pay each month...either I'm going to an early grave (I'm still sick btw) or something's gotta give.
For a loan that started out at $35K and now 17 years later is three times the size...and I pay each month...either I'm going to an early grave (I'm still sick btw) or something's gotta give.
34
I'm sorry for your hardship. This probably won't be helpful, but is there any chance that you work for a government entity (state or federal) or a non-profit organization? Combining the income-based-repayment plan with the federal public service loan forgiveness program is a really wonderful opportunity for the people who qualify, and a lot of people don't seem to realize that this is possible. With the public service loan forgiveness, the remaining balance of the loan will be forgiven with no tax consequences after making 120 on-time payments.
Interest on interest is illegal in some states. The penalty in New York is forgiveness of all principal and interest. I don't know how federal law overrides this, if it does.
Why doesn't the government limit the amount of loans a student can get? I can't stand hearing that low wage workers have $190,000 in college debt. All this debt forgiveness idea is backwards. How about you can't borrow more than would cause "undue hardship" to pay back in ten years. Something like 15% of projected salary or income. What? We'd be infringing on their rights to borrow astronomical sums? What about the tax payers who eat their forgiven loans? In Finland, BTW, students have free college tuition and so can make a long long life as a perpetual student who doesn't work. Socialism has its pitfalls.
5
Which is more egregious?
A handful of freeloading lifetime students or millions of lives ruined by non-dischargeable student debt?
A handful of freeloading lifetime students or millions of lives ruined by non-dischargeable student debt?
1
The real problem is that university education is treated as a 'good' instead of a 'right' ...as in most other civilized countries.
How many Americans would get free education for the $2 trillion that Bush squandered in Iraq?
How many Americans would get free education for the $2 trillion that Bush squandered in Iraq?
12
If only our country supported peace instead of war... .
As the parent of a child who took out loans against parental wishes, I witnessed the absurdity of allowing students to borrow money. My child was allowed to take out loans even though I paid cash for three of the four years. Why were loans given?
My child spent all the money on clothes, alcohol, and going out. My child did not need the money for college tuition. My child's friend did the same; took out loans that were not for college tuition.
There are wrongs on both side of the issue. However, I believe that the student ought to have to pay up. However, perhaps there ought to be automatic payment withdrawals for those who are working.
Also, there ought to be mandatory financial management education prior to receiving school loans.
My child spent all the money on clothes, alcohol, and going out. My child did not need the money for college tuition. My child's friend did the same; took out loans that were not for college tuition.
There are wrongs on both side of the issue. However, I believe that the student ought to have to pay up. However, perhaps there ought to be automatic payment withdrawals for those who are working.
Also, there ought to be mandatory financial management education prior to receiving school loans.
7
Yes, it is so responsible of you to acknowledge what a problem this over-loaning business is--and students MUST be required to pay these loans back in full even if it takes 40 years!
I'm surprised your child was able to take out loans without a cosigner.
When we asked, we were told that my child's college friends were the co-signers.
1
Private student loans are a scam and should not be protected in the same way as federal student loans. similarly, for-profit colleges should be barred from the federal student loan program.
14
Private student loans were snuck into the 2005 massive bankruptcy bill. I say snuck in because with all the other changes made that year the private student loan provision was never commented on in the Congressional record. The bankruptcy code provision doesn't specifically say private loans are bindis chargeable; instead it refers to loans described in a section of the Internal a Revenue Code, which then refers to another IRC section, which then refers to yet another IRC provision. It doesn't get sneaker than that.
This article fails to mention the TAX impact of student loan forgiveness, which can be even worse than the student loan debt itself. I know this from recent personal experiences. My wife had her student loan forgiven in November 2014 on the basis of her total and permanent disability. As a result of her receiving forgiveness of her $94K loan balance, we had to pay over $34,000 of additional tax on April 15! Her original loan balance was only $37K!!
The same primary disability (a back injury from an auto accident in 1995) which eventually got the loan forgiven also prevented her from ever paying it off, as the accident occurred just a year after she graduated from college. This situation makes no moral sense to me -- the federal government agrees my wife is disabled and therefore need not pay her student loan BUT that same federal government says she (or her husband) therefore must immediately pay this Draconian tax. What sort of "relief" is this?
Actually I do believe there is a possibility for a degree of tax relief and I have just filed the appropriate applications. But understanding and completing these applications has taken most of my free time for this entire year, and is a process that is so unusual no tax professional in my locale would even assist me. And results are definitely not guaranteed, so for now I've got to just wait and hope.
This is an area of the law which, in my opinion, is unfair and unjust and simply must be changed.
The same primary disability (a back injury from an auto accident in 1995) which eventually got the loan forgiven also prevented her from ever paying it off, as the accident occurred just a year after she graduated from college. This situation makes no moral sense to me -- the federal government agrees my wife is disabled and therefore need not pay her student loan BUT that same federal government says she (or her husband) therefore must immediately pay this Draconian tax. What sort of "relief" is this?
Actually I do believe there is a possibility for a degree of tax relief and I have just filed the appropriate applications. But understanding and completing these applications has taken most of my free time for this entire year, and is a process that is so unusual no tax professional in my locale would even assist me. And results are definitely not guaranteed, so for now I've got to just wait and hope.
This is an area of the law which, in my opinion, is unfair and unjust and simply must be changed.
39
Good point. I covered that issue in the following story last year:
http://nyti.ms/1OghShh
http://nyti.ms/1OghShh
9
Forgiveness is only taxable if it is collectable. Someone with say $100,000 in forgiveness will not be taxed if they have a household of 4 with $60K in income for example.
Running a college is such a fantastic, risk-free money-making operation. Lie to your prospective students about employment and salary expectations. Have the government back their enormous student loans. Don't let the door hit them where God split them when they graduate with a worthless piece of paper! It's so common to read about college grads with $75,000+ in high-interest loans. My grocery store clerk the other day told me she was a top 25 law school graduate and had $190,000 in loans. What a farce this country has become. News flash, kids: you're better off starting your own business than believing the thieves and hustlers who run the modern-day universities.
9
She should have done her homework. A top 25 law school degree is almost worthless these days. Top 10 yes,, but top 25 no. Buyer beware. Do your homework, check out what you are getting into.
1
Maybe we should update Mario Puzo's comment (by the GF himself, Vito Corleone) in The Godfather: "A lawyer with a briefcase can steal more than a thousand men with guns." Now it would be: "A law school (or indeed the whole higher ed scam) can steal more than ..."
4
First, she probably took the loan out. Years ago. Second you are wrong about the value of a top 25 law school degree. Check on percent with jobs and average incomes of graduates from the top11 to. 25 schools on the U.S. news list. If you had said top 125 law school you still would have overstated the matter, but you would have had a point if your point was that there was a legitimate question as to whether the expected value of the degree was worth it's cost.
Something not mentioned-- Without being able to discharge private student loans in bankruptcy , the private lenders have zero intensive to work with the borrower when they are struggling to pay the dept.
In a way, allowing private loans to be discharged may help the "health" of private loans because there willl be more incentive to create rehabilitation programs, refinancing options, IBR, etc..which currently do not exist.
In a way, allowing private loans to be discharged may help the "health" of private loans because there willl be more incentive to create rehabilitation programs, refinancing options, IBR, etc..which currently do not exist.
21
What kind of country do we live in? 600 BILLION to bomb people.Almost every other western nation has inexpensive or free higher education.I don't when this system will implode but it will.It is called debt serfdom. Oh wait a minute the nightly news is on there is a story about a lost cat that found it's way home.
7
States have cut back on support of their university systems over the past 10-15 years, more so since the financial crisis. Therefore tuition has increased. If we want to address the student loan crisis, improving state financial support of higher education will be important.
8
States are increasingly seeing their budgets eaten up by Medicaid expansion and pensions. There is going to be even a smaller amount of money going forward for education so don't expect the states to up the ante for education going forward as the money is not there. See a recent AP article on this topic.
4
Anita, my state has had one tax cut after another. And now it's to the point that the "leaders" want taxes raised for the low income people for yet more tax cuts for the richest. And they have refused to expand Medicare, and Medicaid is only for families with under $8000 a year and two kids. Single people can't get it at all. Over a third of our state taxes go straight to corporations as "incentives" and "rebates" and such. So your blaming people who are sick or old for the problems is just more falsity from the right, and the wealth class has never had it so good.
1
People who take out a loan need to pay it back. It is hard to understand making an excuse for someone who borrowed money, signed a paper agreeing to the terms, then balks at paying the money back and wants, basically, to have the money given to them. If student loans are forgiven, we will just have a new generation of people who "borrow" way to much money for an education, on the assumption that they will not have to pay it back. With this attitude, I'm sure many will be tempted to "over borrow"and spend like crazy. Sure, universities cost a lot, but maybe college isn't for every one. Maybe we need to start looking at the fact that we exported so many good paying blue collar jobs to other countries, so that we no longer have a job type where college isn't needed.
7
Kids...these are kids. Do they have responsibility? Of course. But from the time they're 5, they're told "you can be anything...ANYYYYYTHING". Their futures are all bright...nice cars, lots of money, a perfect life. Then, they go to school...graduate and see the employment market.
"college isn't for everyone" - who decides who it's for? Those that can pay? Education should NEVER be considered a privilege.
"college isn't for everyone" - who decides who it's for? Those that can pay? Education should NEVER be considered a privilege.
2
If the "kids" can't pay it back, then their parents who promised them everything should have to pay it!
1
It is not just kids borrowing, it is 30+ adults returning for 2nd and 3rd Masters degrees taking practically unlimited sums of loans to live on. It is (some) Veterans fully covered by the Post 9/11 GI Bill, double dipping and pocketing all the financial aid borrowed since VA benefits are not counted as federal aid. It is students at community colleges or inexpensive state schools fully covered by Pell and or State Grants, borrowing for "personal expenses" that are borrowing the most. Borrowers are not victims.
1
Our national interest would be well served by going to a European model of Federal support for higher education at institutions observing tight limits on administrative expenses. Then we could forget about student loans But funding that would require appropriate increases in income tax rates on the wealthy.
Instead, this radical-right Congress makes no secret of its desire to "flatten the rates" -- meaning let the rich escape what even Reagan considered their fair share.
Instead, this radical-right Congress makes no secret of its desire to "flatten the rates" -- meaning let the rich escape what even Reagan considered their fair share.
6
Will you also advocate a European model of college admissions?
Get ready for the wailing and gnashing of teeth, for many are called but few are chosen.
That would bring down the overall cost considerably.
Get ready for the wailing and gnashing of teeth, for many are called but few are chosen.
That would bring down the overall cost considerably.
1
It's a little tiresome to hear people rant about banks. The federal government is the lender for most student loan debt and since 2008 has been the lender for almost all newly generated debt.
(Source: Bloomberg, http://www.bloombergview.com/articles/2015-04-17/washington-may-not-want....
I'm in no way reluctant to criticize the American federal government, but just understand it's not any more the money of the evil banks; it's now mostly your money. So it really should be up to the legislator, the peoples' representatives in Congress, and not the judiciary, to decide how to handle this issue.
Being a little more lenient for student-loan bankruptcies also strikes me as a bit of tinkering for not much. The real problem is the high cost of American university education.
(Source: Bloomberg, http://www.bloombergview.com/articles/2015-04-17/washington-may-not-want....
I'm in no way reluctant to criticize the American federal government, but just understand it's not any more the money of the evil banks; it's now mostly your money. So it really should be up to the legislator, the peoples' representatives in Congress, and not the judiciary, to decide how to handle this issue.
Being a little more lenient for student-loan bankruptcies also strikes me as a bit of tinkering for not much. The real problem is the high cost of American university education.
2
That's the problem - harsh laws and rulings against bankruptcy discharge of loans (public and private) lead to a glut of higher education lending. That lead to steep rises in how much schools charge.
Of course, there are other causes of the steep rise of college costs: lax federal lending standard (to for profit schools), lower state contributions (to public schools), and low interest rates since 2001 (slashing private schools' foundations' investment income.) But it was the bankruptcy laws and rulings that kept a lit off prices.
Of course, there are other causes of the steep rise of college costs: lax federal lending standard (to for profit schools), lower state contributions (to public schools), and low interest rates since 2001 (slashing private schools' foundations' investment income.) But it was the bankruptcy laws and rulings that kept a lit off prices.
3
The Krieger case mentioned in this Article is my case. I worked so hard as a pro se bankruptcy litigant http://www.abajournal.com/mobile/article/7th_circuit! So happy things are changing in this area it was worth all the legal work. Thanks NYT for publishing this article!!
11
The near collapse of our country in 2007 had as its root cause the guaranty of the federal government of loans that had no chance of being retired to borrowers who were incapable of meeting mortgages on the homes that they bought for far more than the homes were worth.
Then the London branch of AIG indemnified lenders for any losses on loans that they made, frequently to support the subprime loans noted above that had no more chance of being retired than of the Cubs winning the World Series.
In spite of what Congress should have learned from the subprime lending fiasco, we have replicated that scenario yet again, only in larger amounts, while ruining the lives of former students who took out large loans to attend mediocre colleges.
Give the serial failures of No Child Left Behind and then the misguided trillion dollar student loan indebtedness fiasco, this warrants dismantling the
dysfunctional US Department of Education. It should be replaced with a Department of Human Capital Development which would be staffed with professionals from the Brookings Institute and The Rand Corporation who would serve ten year terms to avoid being subject to the whims of the party in power at that time, as is the Federal Reserve Bank.
For compelling research follow:
The College Payoff Illusion - Edwin S. Rubenstein
High Debt and Falling Demand Trap New Vets
http://www.brookings.edu/~/media/projects/bpea/spring-2013/2013a_hoxby.pdf
For Poor, Leap to College Often Ends in a Hard Fall
6
"The near collapse of our country in 2007 had as its root cause the guaranty of the federal government of loans that had no chance of being retired to borrowers who were incapable of meeting mortgages on the homes that they bought for far more than the homes were worth."
How can this be true when many banks, investment houses, and mortgage companies went under during the financial crisis? Also many others were rescued by the federal government. If the loans had been guaranteed in the first place, none of this could have happened.
How can this be true when many banks, investment houses, and mortgage companies went under during the financial crisis? Also many others were rescued by the federal government. If the loans had been guaranteed in the first place, none of this could have happened.
2
Sad to see that some people still don't understand that it was the BANKS that made poor home loans (not the gov't). Once they made those loans they then turned around, bundled them and sold them to big "investors." Thus, they made money on the loan initially and again when they were bundled and yet again when they got much of that money back from the American government. It was the banks pushing unreasonable loans and insisting that individuals could take what they knew were unreasonable risks that are the source of the collapse. Those loans involved no risk to the bank if the borrower couldn't repay, which is why the borrowers got the shaft and the banks made out like bandits: their loans repaid by the federal government.
Bear in mind however, the government in our country isn't something "other." If you nominate and elect incompetents you get crapo policy. Go back to the drawing board. Anyone with common sense was telling legislators that the repayment rules on school loans were absurd and unethical. And if they bothered to ask a teacher, any one of them would tell you about the inadequacy, even the stupidity of the NCLB but our legislators are so filled with themselves that few of them have any room left for intelligent thought and inquiry. Just look at most Congressional "inquiries." They are exercises in bloviating and making themselves appear important and denigration for the examinee.
Bear in mind however, the government in our country isn't something "other." If you nominate and elect incompetents you get crapo policy. Go back to the drawing board. Anyone with common sense was telling legislators that the repayment rules on school loans were absurd and unethical. And if they bothered to ask a teacher, any one of them would tell you about the inadequacy, even the stupidity of the NCLB but our legislators are so filled with themselves that few of them have any room left for intelligent thought and inquiry. Just look at most Congressional "inquiries." They are exercises in bloviating and making themselves appear important and denigration for the examinee.
7
@Len Charlap: "If the loans had been guaranteed in the first place, none of this could have happened."
The guarantees have to be worth something in order to make any difference. When the guarantees are for much more than a house is worth then they mean next to nothing. Somewhere down the line it will all come down to what that piece of real-estate is worth.
Unless you have Nancy Pelosi leading the charge to bailout the banks.
The guarantees have to be worth something in order to make any difference. When the guarantees are for much more than a house is worth then they mean next to nothing. Somewhere down the line it will all come down to what that piece of real-estate is worth.
Unless you have Nancy Pelosi leading the charge to bailout the banks.
Call what these situations truly are; indentured servitude to a callous system that cares less about anything other than getting its money back regardless....makes for a hell of a life for one so indentured, eh?
9
I obtained my doctorate degree later in life & have been paying my student loans for twenty years but I still haven't paid them off. In addition to the exorbitant interest rates, the state mandates that I provide pro bono services to its citizens without any compensation or minimal compensation. When I first started my career & was barely earning anything, I would often have one-third of my work load devoted to pro bono services. While receiving no breaks on my student loans & no tax credits over twenty years I provided about $300,000 in unpaid professional services. Yet our state throws money at Boeing which receives hundreds of millions in tax benefits. This is very appalling.
13
The article points out that the average student debt doubled between 2005 and now, but doesn't present the math on the total student debt that has accumulated since 2005. The 2005 amendment giving the same protection to private lenders as government lenders was lobbied into law by investment bankers (and their corrupt lobbyists) who then securitized the student loan debt. This made loans more available and with larger limits that, in turn, gave rise to new and expanded private colleges that give worthless degrees to students overburdened by debt. Additionally, it allowed reputable universities to easily raise tuition and drown students in debt. Nice job congress.
14
Student loans are just another area to be strip-mined and despoiled. At least in old Europe, people could flee poverty and oppression and come to America. Where can debt-ridden anxious Americans turn?
8
Try Brazil. It's working great for American farmers who emigrate there.
Student debtors have to thank the Republicans for their predicaments. Weren't student loans made to be undischargeable in bankruptcy by Nixon, to punish Vietnam protesters? Nixon- also created Sallie Mae a for-profit company that has been extraordinarily profitable underwriting student loans.
Republicans today are chief backer of for-profit colleges that provide little education but saddle (mostly blue collar) students with unsustainable debt.
Republicans today are chief backer of for-profit colleges that provide little education but saddle (mostly blue collar) students with unsustainable debt.
12
And yet people in the South and Midwest keep voting into office representatives whose Republican policies are primarily punitive for people and giveaways to the rich. Go figure.
2
The article plainly states that " Before 1977, student loans could be discharged in bankruptcy alongside other debts like credit card balances." I believe President Nixon was out of office for quite a few years by then.
http://sunlightfoundation.com/blog/2012/02/29/snowe/
Did lawsuit factor in Olympia Snowe's departure?
Did lawsuit factor in Olympia Snowe's departure?
1
The cost of a college education needs to be reduced. Costs have risen because of the explosive growth of administrative employees and the spending colleges have done on expensive physical plants, neither one of which are central to the core mission of a university.
A factor in the growth is that the federal money in the form of Pell grants and federal student loans has made it possible for colleges and universities to raise their prices to whatever the market will bear. There is no logical explanation for the cost of a college education to be three times what it was 30 years ago on a constant dollar basis. Everything else that we buy from high tech equipment to toilet paper costs less today, in real terms, than it did thirty years ago. [Medical costs and housing excepted, both heavily affected by government involvement.]
Presidents of non-profit and state schools are pulling down seven and eight figure salaries. Full professors are getting huge salaries to teach one class per semester, and the bulk of instruction is provided by part time and grad student instructors. But universities have state-of-the-art health clubs, climbing walls, gourmet bistros, and dormitories where they charge students $1,000 per month to share a bedroom.
The federal funds need to be throttled back until the colleges and universities figure out how to deliver education at a reasonable cost.
It's easy enough to criticize the for-profits, but the private and public schools are just as bad.
A factor in the growth is that the federal money in the form of Pell grants and federal student loans has made it possible for colleges and universities to raise their prices to whatever the market will bear. There is no logical explanation for the cost of a college education to be three times what it was 30 years ago on a constant dollar basis. Everything else that we buy from high tech equipment to toilet paper costs less today, in real terms, than it did thirty years ago. [Medical costs and housing excepted, both heavily affected by government involvement.]
Presidents of non-profit and state schools are pulling down seven and eight figure salaries. Full professors are getting huge salaries to teach one class per semester, and the bulk of instruction is provided by part time and grad student instructors. But universities have state-of-the-art health clubs, climbing walls, gourmet bistros, and dormitories where they charge students $1,000 per month to share a bedroom.
The federal funds need to be throttled back until the colleges and universities figure out how to deliver education at a reasonable cost.
It's easy enough to criticize the for-profits, but the private and public schools are just as bad.
17
The root cause of the shortfalls in the Pell Grant program is that the grant amounts are not indexed to inflation.
The program started with the Pell Grant covering much of the cost of a college education; with inflation the limits of the grants are minimal.
To optimize upward mobility of those in the lower income, high potential category pin pointed by the Brooking Institute, we should recalculate the amounts covered by Pell Grants to reflect what the original program paid, adjusted to inflation.
The program started with the Pell Grant covering much of the cost of a college education; with inflation the limits of the grants are minimal.
To optimize upward mobility of those in the lower income, high potential category pin pointed by the Brooking Institute, we should recalculate the amounts covered by Pell Grants to reflect what the original program paid, adjusted to inflation.
4
Unfair. The number of professors who may been teaching one course and "getting huge salaries" (which cannot compare to what the administrators and coaches are earning) are few and those professors have other responsibilities, such as research. Universities want professors to do research because it is a cash cow for the university, not the professor.
It is true that higher education is being run like a business, hence the huge salaries at the top and the deluxe health clubs. The MBAs running the places sit on corporate boards and want their campus to keep up with what they see in the corporate world. All of this has contributed to the upending of the real mission of higher education.
Return the administration of universities to the collective governance model where the president was a former professor and understood the needs of education. Cap their salaries. Start hiring tenure track faculty so students and their professors get continuity, and professors aren't trying to counsel students in a hallway as they rush to their next class at another college.
Bring down the entirely outsized salaries of the coaches. In some states the highest paid state employee is the university football coach. Couldn't some of you alumni contribute to your alma mater even if the football team didn't have a winning streak?
Higher education has succumbed to the corporate model, and it isn't a pretty picture for anyone other than the administration.
It is true that higher education is being run like a business, hence the huge salaries at the top and the deluxe health clubs. The MBAs running the places sit on corporate boards and want their campus to keep up with what they see in the corporate world. All of this has contributed to the upending of the real mission of higher education.
Return the administration of universities to the collective governance model where the president was a former professor and understood the needs of education. Cap their salaries. Start hiring tenure track faculty so students and their professors get continuity, and professors aren't trying to counsel students in a hallway as they rush to their next class at another college.
Bring down the entirely outsized salaries of the coaches. In some states the highest paid state employee is the university football coach. Couldn't some of you alumni contribute to your alma mater even if the football team didn't have a winning streak?
Higher education has succumbed to the corporate model, and it isn't a pretty picture for anyone other than the administration.
10
My children's mother and I have been paying their student loan interest and they pay the actual tuition since they were in college. We also drop them some money when we can to pay down the debt. We didn't wait until they graduated because interest starts quickly and can add up.
Not everyone has the ability to assist their relatives and some choose not to even when they can help. It was clear to me when applying for student loans that the interest rates are ridiculously high and are an impediment to lower income people getting an education.
Whether we realize it or not, the cost of an education including the loan and interest costs prevent many low income and minority students from attending and completing college. These are the same groups that would benefit the most from additional education. Moreover, the FAFSA and financial aid process is confusing. Parents and counselors are often unable to understand the system or explain it to these kids who have to deal with their uninformed long-term decisions.
The system needs to be revamped to lower education costs and interest rates. With more online courses competing with brick and mortar campuses educations costs can decrease. We also need to peg interest at slightly above the prime rate.
If we allow former students to default on the debt the costs will be extended to other students and customers causing them additional hardship.
Not everyone has the ability to assist their relatives and some choose not to even when they can help. It was clear to me when applying for student loans that the interest rates are ridiculously high and are an impediment to lower income people getting an education.
Whether we realize it or not, the cost of an education including the loan and interest costs prevent many low income and minority students from attending and completing college. These are the same groups that would benefit the most from additional education. Moreover, the FAFSA and financial aid process is confusing. Parents and counselors are often unable to understand the system or explain it to these kids who have to deal with their uninformed long-term decisions.
The system needs to be revamped to lower education costs and interest rates. With more online courses competing with brick and mortar campuses educations costs can decrease. We also need to peg interest at slightly above the prime rate.
If we allow former students to default on the debt the costs will be extended to other students and customers causing them additional hardship.
2
I feel for you since my situation is similar. I got a cancer and metabolism disorder diagnosis within months of graduation, weeks after my student health insurance ran out and a couple of days after I started an internship into a well paid professional job at the age of 30.
It has been tough, humbling and humiliating by turns as I try to claw my way back in while keeping up with the tuition debt, the medical bills and the interview discrimination similar to what you described.
I am 40 now, with a modicum of light shining through via entrepreneurship. And I get requests from my university to contribute time, relationships and money as a successful alumni - my feelings are mixed because it was one of those overspending universities (top few most expensive universities) with too many overpaid administrative staff who couldn't and wouldn't do anything for its students in distress (except for some of the professors who were moved to try and intervene) and I am still dealing with the financial ramifications of the bad luck and bad timing from 10 years ago.
It has been tough, humbling and humiliating by turns as I try to claw my way back in while keeping up with the tuition debt, the medical bills and the interview discrimination similar to what you described.
I am 40 now, with a modicum of light shining through via entrepreneurship. And I get requests from my university to contribute time, relationships and money as a successful alumni - my feelings are mixed because it was one of those overspending universities (top few most expensive universities) with too many overpaid administrative staff who couldn't and wouldn't do anything for its students in distress (except for some of the professors who were moved to try and intervene) and I am still dealing with the financial ramifications of the bad luck and bad timing from 10 years ago.
3
That Ms. Roth's student loans were allowed to balloon to nearly three times the original amount-- with dismissal of the loans then flatly refused-- is not only cruel but incredibly stupid policy, a sign of a once-great country that has completely lost its way amid elite greed and ideological rigidity.
It's even more inexcusable since countries like Germany, Sweden, France, Norway, Chile and Brazil all offer higher education for free-- even for Americans and other international students who go there-- while actually spending less public money and achieving better results, with a better-educated population that is able to start business and work in specialized fields without debt.
More and more, my own engineering students are opting to emigrate to countries like Germany for further education. Also more and more for undergrad as well, one reason why we're seeing fewer and fewer of them here in the States. How can US politicians be so foolish to force Americans deep into student loan debt-- and then outsource precious jobs (or replace them with cheap-labor H1b hires in the USA), making it impossible even for STEM grads to become debt-free?
Our system is broken, a major reason why so many US students who do their studies in Germany, Scandinavia, France, Belgium or Brazil decide to stay there. Their kids won't have to worry about student loans, plus they'll avoid other areas of US policy blundering like health care, divorce, crime and failed infrastructure policies.
It's even more inexcusable since countries like Germany, Sweden, France, Norway, Chile and Brazil all offer higher education for free-- even for Americans and other international students who go there-- while actually spending less public money and achieving better results, with a better-educated population that is able to start business and work in specialized fields without debt.
More and more, my own engineering students are opting to emigrate to countries like Germany for further education. Also more and more for undergrad as well, one reason why we're seeing fewer and fewer of them here in the States. How can US politicians be so foolish to force Americans deep into student loan debt-- and then outsource precious jobs (or replace them with cheap-labor H1b hires in the USA), making it impossible even for STEM grads to become debt-free?
Our system is broken, a major reason why so many US students who do their studies in Germany, Scandinavia, France, Belgium or Brazil decide to stay there. Their kids won't have to worry about student loans, plus they'll avoid other areas of US policy blundering like health care, divorce, crime and failed infrastructure policies.
28
If you teach engineering, you surely know that data overwhelms anecdotes. Please provide data to back up your claims. Just how many students are fleeing to the countries you name? Are there truly fewer engineering students in the U.S. now?
JPE,
It's not my job (as an engineering professor as you note) to collect and divulge statistics on US immigration and emigration, in fact since the US government itself does not systematically collect emigration stats we have no detailed information on US emigration at all, from any source, only indirect data and carefully collected anecdotes. However, we have witnessed a substantial reduction in the number of young Americans majoring in STEM fields, and when researchers talk to students about this, the dimmed job prospects, lack of respect for their expertise, outsourcing and H-1B visa are major factors. The NYT comment system doesn't allow us to post links on the site, so you'll have to do your own research here. Some suggestions-- go onto Machine and Design's page, the Wall Street Journal (hardly a beacon of protection for US workers) which admitted this recently, USA Today and other NYT articles. Focus on the topic of declining US science majors in relation to poor career prospects and the H-1B visa, and you'll see clear evidence on this from many studies.
It's not my job (as an engineering professor as you note) to collect and divulge statistics on US immigration and emigration, in fact since the US government itself does not systematically collect emigration stats we have no detailed information on US emigration at all, from any source, only indirect data and carefully collected anecdotes. However, we have witnessed a substantial reduction in the number of young Americans majoring in STEM fields, and when researchers talk to students about this, the dimmed job prospects, lack of respect for their expertise, outsourcing and H-1B visa are major factors. The NYT comment system doesn't allow us to post links on the site, so you'll have to do your own research here. Some suggestions-- go onto Machine and Design's page, the Wall Street Journal (hardly a beacon of protection for US workers) which admitted this recently, USA Today and other NYT articles. Focus on the topic of declining US science majors in relation to poor career prospects and the H-1B visa, and you'll see clear evidence on this from many studies.
1
Every important US financial crisis results from corruption. The impending student loan debt crisis is no different. The majority of the money at issue passed into the hands of corporations running for-profit 'educational' institutions. Many of the corporations are long-gone but their principles still have the money and they'll use a little of it to keep lobbying our national legislature to protect their interests which, among many, include not raising taxes to bail-out the very same students they fleeced in order to get rich.
11
Another case of Republicans in Congress favoring banks and lenders over average citizens. When loan rates began to fall in the early years of the 21st century, Congress failed to require student loans to also be renegotiated so students could reap the same benefits as mortgage holders. In 2014, Republicans blocked Elizabeth Warren's bill to allow students to refinance their high interest debt with rates now available. How many people affected by this issue either fail to vote or vote against their own self interest or that of their children by sending Republicans to Congress?
27
The interest rates are pretty high for many and it compounds forever--many people-especially at the age of 18 or so don't understand tat you could borrow 50,000 and end up owing 150,000. Bad luck, life circumstances, poor wages, poor choices can cripple a person. Some people want to try and just fall further down the hole. Is it fair that a bank-which is guaranteed the money by the federal backing-can slam so many fees and penalties? Time to change things in the student loan world. It would benefit both borrowers and the federal government. The only people unhappy with changes would be banks and collection agencies.
19
You really show your cluelessness if you think this has anything to do with morals. This is an economic crisis, period. I went to college in the 1980s, when you could go to an excellent state university & pay for it by simply working hard all summer and 10-15 hours during the year. Your parents didn't even have to pay.
Now as a parent of five, I've watched as college tuitions have ballooned far more rapidly than any other sector I can think of. In NJ, Rutgers is $25K/year. That's over $100,000 per child! No student can possibly pay that from a summer job (if you can find one). And unless you're wealthy, you the parent cannot afford to help pay for that either--without taking out loans *too*.
I am not alone. For the vast majority of us, we are terrified of *paying* for college, & how the loans will impact our children --and us.
College is now a necessity at the same time costs are ballooning. The Times has been behind on this huge issue I think primarily because of its upper middle class bias, but so many highly educated families, if they have more than 2 children, end up borrowing extensively, either from Parent Plus, from their own house, from retirement, or private. On top of their kids.
My children will graduate with extensive debt (& they are lucky, with 75% paid for via scholarship). To make their education possible, I have also borrowed. What will happen to us *parents* when we retire?
The judge is absolutely right. We must reform our laws.
Now as a parent of five, I've watched as college tuitions have ballooned far more rapidly than any other sector I can think of. In NJ, Rutgers is $25K/year. That's over $100,000 per child! No student can possibly pay that from a summer job (if you can find one). And unless you're wealthy, you the parent cannot afford to help pay for that either--without taking out loans *too*.
I am not alone. For the vast majority of us, we are terrified of *paying* for college, & how the loans will impact our children --and us.
College is now a necessity at the same time costs are ballooning. The Times has been behind on this huge issue I think primarily because of its upper middle class bias, but so many highly educated families, if they have more than 2 children, end up borrowing extensively, either from Parent Plus, from their own house, from retirement, or private. On top of their kids.
My children will graduate with extensive debt (& they are lucky, with 75% paid for via scholarship). To make their education possible, I have also borrowed. What will happen to us *parents* when we retire?
The judge is absolutely right. We must reform our laws.
32
We just looked up Rutgers and in-state tuition is about $13,000/yr while out-of-state is $28,000. I know this because I live in NJ and wanted to know how much it compares to my alma mater, University of Florida, which is about $6800, or quadruple what I paid for one year of 30 credits when I graduated in 1997. College tuition is insane and will harm this country.
7
If Dilligad24's children are hard working, well motivated and exceptional in team work, they might consider looking into Dartmouth College.
If Dartmouth College does appear to be a good fit for their abilities and aptitudes, Dartmouth has alumni that have been so grateful and generous with their donations for financial aid that the average student loan indebtedness of new graduates is only a very manageable $16,000.
This allows many to participate in the very rewarding but low paying initial
programs of the Peace Corps or Teach For America.
Wherever they build their career, few of their peers will have developed the
work habits and team work propensity that the Dartmouth culture inspires.
If Dartmouth College does appear to be a good fit for their abilities and aptitudes, Dartmouth has alumni that have been so grateful and generous with their donations for financial aid that the average student loan indebtedness of new graduates is only a very manageable $16,000.
This allows many to participate in the very rewarding but low paying initial
programs of the Peace Corps or Teach For America.
Wherever they build their career, few of their peers will have developed the
work habits and team work propensity that the Dartmouth culture inspires.
1
Dilligad24--That's right. And the total in-state cost for Rutgers is $25K/year including room, board, books.
1
I went back to school in my 50's looking ahead to what career would make sense as I planned to work through my 60's.
I made a well informed decision and based on the job market thought myself to be heading for financial security in a profession that would provide me with challenging and well paid work for quite some time. So I took out student loans .
Midway through my education to become a family nurse practitioner I was diagnosed with a brain tumor. Not one that will end my life although I now have speech and voice issues as well as intense coughing and choking episodes. My arm and shoulder are impaired as well with limited movement and strength.
I keep applying for jobs. No one will hire me. Even when I've gone for 3, 4, 5 interviews at one facility for one position. They question why there's a gap since graduating (surgeries, speech and voice therapies to help me speak clearly and loudly enough for others to even hear my words , therapy to help me swallow so I don't choke or aspirate-which would lead to the need for a feeding tube. How about exhaustion? ).
They hear my raspy voice when I pick up the phone and apologize for "waking" me at 2 pm when I've been up since 8 am. I have slurred speech sometimes.
So all you judgemental folks-you never know what life brings when least expected.
Be grateful you have a good job and a home of your own. I may never have these things. But I'm not giving up either.
I made a well informed decision and based on the job market thought myself to be heading for financial security in a profession that would provide me with challenging and well paid work for quite some time. So I took out student loans .
Midway through my education to become a family nurse practitioner I was diagnosed with a brain tumor. Not one that will end my life although I now have speech and voice issues as well as intense coughing and choking episodes. My arm and shoulder are impaired as well with limited movement and strength.
I keep applying for jobs. No one will hire me. Even when I've gone for 3, 4, 5 interviews at one facility for one position. They question why there's a gap since graduating (surgeries, speech and voice therapies to help me speak clearly and loudly enough for others to even hear my words , therapy to help me swallow so I don't choke or aspirate-which would lead to the need for a feeding tube. How about exhaustion? ).
They hear my raspy voice when I pick up the phone and apologize for "waking" me at 2 pm when I've been up since 8 am. I have slurred speech sometimes.
So all you judgemental folks-you never know what life brings when least expected.
Be grateful you have a good job and a home of your own. I may never have these things. But I'm not giving up either.
32
Sincere apologies for the comment I wrote. I was in complete error for not singling out that a catastrophic health issue should be an automatic exception to anyone with college loans. Clearly, individuals such as yourself have enough on your plate without adding increased stress and hardship to an already overwhelming situation.
7
The Department of Education does have a Disability Waiver for student loans. They do not advertise it but it is there. I hope this will help you.
1
You know what Marge- no hard feelings. I may have had a stereotypical view regarding this issue if I didn't have this unfortunate experience myself.
Yesterday I called for some info on these loans as my interest is accruing and I'm frightened. I was told about a disability clause that if I had a physician sign : I was going to die or am totally and permanently disabled or unable to have employment for the next 60 months I could get my loans discharged.
Well. I'm not dying and don't consider myself permanently and totally disabled. So although they're deferred they're still my responsibility.
Yesterday I called for some info on these loans as my interest is accruing and I'm frightened. I was told about a disability clause that if I had a physician sign : I was going to die or am totally and permanently disabled or unable to have employment for the next 60 months I could get my loans discharged.
Well. I'm not dying and don't consider myself permanently and totally disabled. So although they're deferred they're still my responsibility.
Our children's minds are our nation's greatest natural resource.
Too bad we're squandering it.
Too bad we're squandering it.
8
I'll probably get blasted for writing this, but if a person who entered college was smart enough to get in to begin with, how is it that the loan repayment structure is such a surprise upon graduation and when the loan repayment is due? I am having a difficult time empathizing with anyone who was willing to accept and sign for student loans in the beginning but after graduation complain that the monthly installments are too high and can not be met based on their monthly employment salary.
This sounds so similar to a number of years ago when the housing market was at a high point and people bought $500,000 homes with only a yearly income $55,000. Suddenly their low interest loan ballooned and they could no longer make the mortage and had to foreclose on a house they could never afford in the first place.
I had student loans. And it was tough and difficult to repay them and it took many years to do so, but I found ways to do it and eventually repaid them. I apologize for sounding harsh, mean and horrible. I just think the flip side of accepting a degree from a college or university is to repay the student loans. Anything less is a breach of contract.
This sounds so similar to a number of years ago when the housing market was at a high point and people bought $500,000 homes with only a yearly income $55,000. Suddenly their low interest loan ballooned and they could no longer make the mortage and had to foreclose on a house they could never afford in the first place.
I had student loans. And it was tough and difficult to repay them and it took many years to do so, but I found ways to do it and eventually repaid them. I apologize for sounding harsh, mean and horrible. I just think the flip side of accepting a degree from a college or university is to repay the student loans. Anything less is a breach of contract.
10
Gee....how nice for you.
Bet you didn't go to school when a state undergrad was $100,000. (Neither did I but I can do math.)
Median wage for a new BA is $35,000.
50% of engineering and STEM grads can not find jobs.
ANd I guarantee that the poster above did NOT ask to have a brain tumor that is making her unemployable.
And so what if it is a breach of contract? That is not exactly a violation of the 10 commandments or some universal moral precept.
Contracts get breached every day - such as by corporations who promised to pay their share of pensions or to pay certain wages.
Are you outraged over that?
Being unable to perform your side of a contract does not mean you are going to hell - stuff happens -stuff happens that you never thought would.
Bet you didn't go to school when a state undergrad was $100,000. (Neither did I but I can do math.)
Median wage for a new BA is $35,000.
50% of engineering and STEM grads can not find jobs.
ANd I guarantee that the poster above did NOT ask to have a brain tumor that is making her unemployable.
And so what if it is a breach of contract? That is not exactly a violation of the 10 commandments or some universal moral precept.
Contracts get breached every day - such as by corporations who promised to pay their share of pensions or to pay certain wages.
Are you outraged over that?
Being unable to perform your side of a contract does not mean you are going to hell - stuff happens -stuff happens that you never thought would.
13
Sure, people should repay their loans. But why should student loans exist in their own different class of debt, the only one that cannot be discharged in bankruptcy?
People and corporations (who we now know are people too) can take out huge loans to start businesses, and when they fail, loans can be discharged in bankruptcy court. You can run up $100,000 in credit card debt and have it discharged in bankruptcy. Why is student loan debt protected?
Because the banks paid our representatives to vote that special protection into law.
Ever wonder why college tuition has gone up so much faster than the rates of inflation and earnings capacity? Maybe it's because lenders are willing to give borrowers so much money for tuition, knowing it can never be discharged in bankruptcy. If lenders did not have that protection, they'd be much more careful about lending. All that easily available money from lenders enables schools, colleges and universities to easily raise tuition. Go study that chapter on inflation from your first year economics course in college: the problem of rising tuition is basic inflationary economics.
And the whole system is a total racket. Remove the special protection of not being able to discharge student loan debt in bankruptcy and tuitions won't go up nearly so far or fast.
People and corporations (who we now know are people too) can take out huge loans to start businesses, and when they fail, loans can be discharged in bankruptcy court. You can run up $100,000 in credit card debt and have it discharged in bankruptcy. Why is student loan debt protected?
Because the banks paid our representatives to vote that special protection into law.
Ever wonder why college tuition has gone up so much faster than the rates of inflation and earnings capacity? Maybe it's because lenders are willing to give borrowers so much money for tuition, knowing it can never be discharged in bankruptcy. If lenders did not have that protection, they'd be much more careful about lending. All that easily available money from lenders enables schools, colleges and universities to easily raise tuition. Go study that chapter on inflation from your first year economics course in college: the problem of rising tuition is basic inflationary economics.
And the whole system is a total racket. Remove the special protection of not being able to discharge student loan debt in bankruptcy and tuitions won't go up nearly so far or fast.
3
I suggest that if one eliminates the lower rated schools from the population studied, the percentage of engineering and STEM graduates who are able to obtain jobs in their field of study will be far above the 50% noted above.
4
Gosh. Sounds like everyone here is working for our corporate overlords in scorning any field of study that doesn't lead straight to a cubicle.
To bring back an allusion that only recipients of an old-fashioned education will recognize, those with "impractical" educations are somewhat like the lilies of the field. We need them as much as we need wheat, but to feed other hungers...
A first sensible step might be to freeze interest. Trust me, after the first year or so, the banks have made plenty of profit on the initial debt. Let them settle for principal, repaid slowly. Allow suspension of payments without that relentless ticking clock so people can actually get a leg up on life.
You can't bemoan the increasing failure of people to go into altruistic fields if no one can afford to do so. You can't whine about the dearth of volunteerism if no one can afford to volunteer their time because they're working five jobs just to keep from losing ground.
And, really. It's a GOOD thing to read lots of books in college and do a lot of talking about stuff. That helps people to THINK....
To bring back an allusion that only recipients of an old-fashioned education will recognize, those with "impractical" educations are somewhat like the lilies of the field. We need them as much as we need wheat, but to feed other hungers...
A first sensible step might be to freeze interest. Trust me, after the first year or so, the banks have made plenty of profit on the initial debt. Let them settle for principal, repaid slowly. Allow suspension of payments without that relentless ticking clock so people can actually get a leg up on life.
You can't bemoan the increasing failure of people to go into altruistic fields if no one can afford to do so. You can't whine about the dearth of volunteerism if no one can afford to volunteer their time because they're working five jobs just to keep from losing ground.
And, really. It's a GOOD thing to read lots of books in college and do a lot of talking about stuff. That helps people to THINK....
17
I've had student debt dating back over 20 years. I became ill and made so little money over the years that very little of it was ever paid off - yet there it remains growing larger and larger every year.
I can't imagine that the originators of the student loan program intended this. I would have been happy to pay off the relatively modest amount (at the time) of the loan at the time but wasn't able to.
I reached out to apply for bankruptcy and was told I didn't have a chance.
The loan didn't work out for me and it didn't work out for the lenders and I'm sorry about that - but isn't enough enough????
I can't imagine that the originators of the student loan program intended this. I would have been happy to pay off the relatively modest amount (at the time) of the loan at the time but wasn't able to.
I reached out to apply for bankruptcy and was told I didn't have a chance.
The loan didn't work out for me and it didn't work out for the lenders and I'm sorry about that - but isn't enough enough????
15
When you are living on social security and nothing else, the bankers will stop hounding you. If you have any other source of income in retirement, you will continue to pay until you die. It is the 21st century version of indentured servitude.
1
There should be no such thing as a student loan - all should be outlawed, along with payday loans, title loans, interest on credit cards, etc. In fact about the only loans that should be allowed are mortgages and car loans. For each of these there should be government set interest rates, and if a lender can't make money at that rate, he/she shouldn't make the loan.
I know there will be those who will say that this will exclude many from being able to borrow, but that's the point. Lenders are too loose with loans and we need to go back to a time where you SAVED to make a major purchase, not where you borrowed for any and all purchases.
I know there will be those who will say that this will exclude many from being able to borrow, but that's the point. Lenders are too loose with loans and we need to go back to a time where you SAVED to make a major purchase, not where you borrowed for any and all purchases.
5
Recently, the New York Times printed an article by someone who bragged about walking away from his student loans and even though he had written subsequent books, he felt he was not responsible to pay. He encouraged others to do the sampaid every penny of my college experience I resent these people who take out these loans, knowing they have no intention of paying that off. We lived a spartan existence for 5 years. We didn't ask for help nor expected it. We wanted to do it on our own. For those that got loans? That's fine for them, but that debt doesn't go away. It's now over $1 trillion dollars and taxpayers will be forced to pay the freight. That's disgusting. I never heard of one incident where a gun was put to anyone's head when they took out the loans. Yet suddenly, these very same people who profited from this by achieving personal and professionally have a light bulb go off and the loan they so willingly accepted now should be forgiven. BULL.
Too many of these people are art history or other less profitable areas. So their debt should be forgiven because they choose an area that doesn't pay? I and those who are tax payers are not on the hook for this. Instead of forgiving their loans they should garnish their wages, prevent them from taking out any other loans until it is paid. What's to say that they won't do it again? Forgiving loans teaches their kids their is no accountability for your actions or decisions. And we have Obama to thank for that. What a fool.
Too many of these people are art history or other less profitable areas. So their debt should be forgiven because they choose an area that doesn't pay? I and those who are tax payers are not on the hook for this. Instead of forgiving their loans they should garnish their wages, prevent them from taking out any other loans until it is paid. What's to say that they won't do it again? Forgiving loans teaches their kids their is no accountability for your actions or decisions. And we have Obama to thank for that. What a fool.
6
Bankruptcy is to prevent slavery (owe your soul to the company store).
It is based on the theory that people with equal bargaining positions do not enter into agreements they cannot pay. It's intended to prevent exploitation.
Students intend to repay their loans from the money they earn working in their chosen field.
People selling educational loans should not expect to get paid if their customers do not get paid.
I have no problem with a lender who loans an 18 year old kid $50,000 to study for an non-existing job to have to eat the loan.
It is based on the theory that people with equal bargaining positions do not enter into agreements they cannot pay. It's intended to prevent exploitation.
Students intend to repay their loans from the money they earn working in their chosen field.
People selling educational loans should not expect to get paid if their customers do not get paid.
I have no problem with a lender who loans an 18 year old kid $50,000 to study for an non-existing job to have to eat the loan.
11
Before we go the route of wiping out debt, we need first to do away with high cost diploma mills. Many recent articles -- including here in the NY Times -- have highlighted an abusive system that saddles people with tens of thousands (and sometimes six figures) of debt for a worthless degree, or even no degree. These are faux-schools invariably prey on those whose hopes/dreams for opportunity were stymied by family, social, or personal circumstances that limited their chances for admission to reputable schools. Focus on the abusive institutions first. Someone who went to a reputable state or private school need not be relieved of debt burdens: Get a job, or build a business, or get a job that pays more.
9
Amen!
1
Student Loan is just another harbinger in the long menace of the fundamentally flawed economic system. where newly minted college graduates and others that flunk out are leaches on a system perpetuated by the bankers and the US Government. In fact this idea that everybody and his/her mother needs a college educated is pure simple bunk. What this nation needs is more community college for people to learn how to be mechanics, grocery store clerks, butchers, fish mongers, sanitary engineers,
bicycle mechanics, truck drivers, bus drivers, train conductors, bank clerks, cooks, chefs, and some million plus other avocations for society to function. Community college should be either free so subsidized by employers and corporations who needs such work forces . Or some small stipend . I was once a college student with an Institution international education scholar ship for 4 years. I worked part-time for my room and board, plus every summer for other expenses. In the summers lived with farm family of very decent people and helped evenings and weekends on farm other home chores, moved the lawn , took care of the garden, helped out in other chores and duties on the farm. The good folks treated me as part of their family and in return I respected and contributed my obligation with pleasure and decency. In addition I learned something about American way of life and what so called patriotism is all. Then earned stipend for my MS and PhD.
bicycle mechanics, truck drivers, bus drivers, train conductors, bank clerks, cooks, chefs, and some million plus other avocations for society to function. Community college should be either free so subsidized by employers and corporations who needs such work forces . Or some small stipend . I was once a college student with an Institution international education scholar ship for 4 years. I worked part-time for my room and board, plus every summer for other expenses. In the summers lived with farm family of very decent people and helped evenings and weekends on farm other home chores, moved the lawn , took care of the garden, helped out in other chores and duties on the farm. The good folks treated me as part of their family and in return I respected and contributed my obligation with pleasure and decency. In addition I learned something about American way of life and what so called patriotism is all. Then earned stipend for my MS and PhD.
2
There are legitimate instances of real people facing real hardships. But, many students just do not want to pay back what they willingly borrowed. A clear case of a failed contract at best and in many instances pure fraud.
Since all too many students are willing to borrow six figures in order to make low five figures and end up in dire straits, perhaps the government should step in and put a lending cap on majors that will not enable the student to uphold their obligation.
Ironically, this article came under the heading of "your money". Since I actually am having to foot the bill from every default, scam, and irresponsible person around, I wish people would pay their bills. But like the heading says, it is my money so I guess other folks do not mind spending it. I will just be forced to give them more.
If the argument is education for the sake of education then the true scholar will not mind taking a class every now and then when they can afford it and find time off from their responsibilities of funding their own life.
Since all too many students are willing to borrow six figures in order to make low five figures and end up in dire straits, perhaps the government should step in and put a lending cap on majors that will not enable the student to uphold their obligation.
Ironically, this article came under the heading of "your money". Since I actually am having to foot the bill from every default, scam, and irresponsible person around, I wish people would pay their bills. But like the heading says, it is my money so I guess other folks do not mind spending it. I will just be forced to give them more.
If the argument is education for the sake of education then the true scholar will not mind taking a class every now and then when they can afford it and find time off from their responsibilities of funding their own life.
4
the government should step in and put a lending cap
___
Sigh....do find about a subject before pontificating.
THERE IS a cap on Federal Student Loans
There is a cap per year depending upon grade level (freshman an not borrow as much as seniors)
There is a cap IN TOTAL on Federal Student loans
What is unlimited and uncapped are PRIVATE student loans from banks.
___
Sigh....do find about a subject before pontificating.
THERE IS a cap on Federal Student Loans
There is a cap per year depending upon grade level (freshman an not borrow as much as seniors)
There is a cap IN TOTAL on Federal Student loans
What is unlimited and uncapped are PRIVATE student loans from banks.
7
My working-class parents were very wary of me being saddled with student debt. My mother came up with a great solution - she would work for several years in a job she hated (at the local university) to get dependent tuition benefits for me. Grants and merit scholarships covered the rest, allowing me to graduate from an expensive private university with only $2500 in loan debt (this was 25 years ago).
The tradeoff? I had no choice in what college I would attend (tuition exchange agreements at that time offered few alternative options for schools), and the one in our hometown was a very poor fit for me culturally. I hated, hated, hated my four years at that university, and wound up taking a "fun" major instead of something more "useful," just so I could say I enjoyed something about my stay there.
But there is a happy ending... if you want to look at it that way. A bachelor's degree won me the right to a job where I could sit down all day (whitish-pinkish collar)... something my parents never had; they had to stand in department stores and factories. I have nothing you would call a "career," the sort you are supposed to have the key to after "an education," but I'm still debt-free.
Thanks, Mom.
The tradeoff? I had no choice in what college I would attend (tuition exchange agreements at that time offered few alternative options for schools), and the one in our hometown was a very poor fit for me culturally. I hated, hated, hated my four years at that university, and wound up taking a "fun" major instead of something more "useful," just so I could say I enjoyed something about my stay there.
But there is a happy ending... if you want to look at it that way. A bachelor's degree won me the right to a job where I could sit down all day (whitish-pinkish collar)... something my parents never had; they had to stand in department stores and factories. I have nothing you would call a "career," the sort you are supposed to have the key to after "an education," but I'm still debt-free.
Thanks, Mom.
10
'...wound up taking a "fun" major instead of something more "useful," just so I could say I enjoyed something about my stay there...'
This is part of the problem right there, that students think that college should be 'fun' and that the world will pay them well for their 19th Century French Poetry degree.
Odds are good that no foreign student is majoring is a useless degree.
Good for your mother that she sacrificed for you, but she should have put her foot down when you foolishly decided to major in a field that did not have a clear path to a career.
This is part of the problem right there, that students think that college should be 'fun' and that the world will pay them well for their 19th Century French Poetry degree.
Odds are good that no foreign student is majoring is a useless degree.
Good for your mother that she sacrificed for you, but she should have put her foot down when you foolishly decided to major in a field that did not have a clear path to a career.
While tuition is outrageously expensive, there is still choice and loan repayment is part of the character equation. Too often in this country people are finding ways to avoid debts. The handmaiden to this is the seeming decline in the desire to earn a living, and instead to seek wealth through lawsuits and other fraudulent means. I paid more than 150,000 in tuition, but I wouldn't have gone to a school that was too expensive. America is in a race to the bottom in character.
3
Does this sound inherently similar to the subprime mortgage crisis? Our federal government profited $41.2 BILLION dollars in 2013 off student loans and is set to make an additional $185 BILLION profit over the next 10 yrs. All profits SHOULD be utilized to lower interest for new loans and to refinance higher interest rate loans. Why did WE the tax payers bail out Wall Street with 0.25% loans, but we charge students 6, 7, 8 and 9%??? Regarding bankruptcy, if student loans do not offer any consumer protections then they should not be reported on a borrower's credit report. Is it okay that someone who irresponsibly racked up credit card debt and gambling debt is allowed to wipe their slate clean in bankruptcy? Students are struggling to repay their student loan debt; many of them have lenders who do absolutely nothing to assist them, forcing them into default. This is a life-changer and guess what? The repercussions have yet to rear their head because this subject is way too new. I know first hand that recent graduates graduated into the worst economy, second only to the Great Depression. This is delaying the borrower in the milestones of life we all strive to achieve-move out of our parents home; rent an apartment/buy a house; buy a new car; get engaged and get married; have a family; Because of their default and their inability to discharge this debt, they are STUCK. And, guess what Bryan--it will effect you in some way or another in the years to come.
Nothing will change until graduates and students do something to stop this abuse. Stop paying your loans and send the bank of record a nicely wrapped red brick instead. It will send the right message and it will stop these predatory banks dead in their tracks, so they can deal with all of those bricks.
Non-violent protest works. So, send a message they have to clean up. It will cost less than $10.00 to send one. Use the US Postal Service and exercise your heart muscle.
Non-violent protest works. So, send a message they have to clean up. It will cost less than $10.00 to send one. Use the US Postal Service and exercise your heart muscle.
6
So exactly what is the message that you are trying to send to the banks, Marla? To me it sounds like you are saying,"Don't make any more student loans," which may not be what you intended. It certainly isn't a message that future students will appreciate.
That higher education - no less all K-12 education - in this country is not free is an embarrassment and extraordinary waste of our human talents and resources. Student debt is just one tragic facet of this political, economic and cultural mistake.
I benefited from superb public education - Bronx HS of Science, CCNY, and University of Michigan - all substantially free. This is the way it should be for all who wish to advance their curiosity, knowledge and lives. I wish that were true.
While a number of other Western countries have figured this out, the US still operates on the belief that education has to be earned, not given. What does that mean for our future? It doesn't bode well.
I benefited from superb public education - Bronx HS of Science, CCNY, and University of Michigan - all substantially free. This is the way it should be for all who wish to advance their curiosity, knowledge and lives. I wish that were true.
While a number of other Western countries have figured this out, the US still operates on the belief that education has to be earned, not given. What does that mean for our future? It doesn't bode well.
9
When I was in college in the early 1980s, interest on student loans was not charged until the student began working. Now, interest begins accruing from the minute the loan is taken out. We are deliberately shackling young people now into indentured servitude. All you rich baby boomers who are complaining about "moral" obligations need to remember how much you benefited from the GI Bill, better terms on your student loans, and lower tuition rates.
17
We have become such a morally bankrupt society that encourages free loading and completely absolves us of personal responsibility. Shame on us.
4
Reconsidering forgiveness of student loans must look at the bigger picture and outrageous cost of higher education because otherwise we are just subsidizing and encouraging the salaries, overhead and administrative expenses that have grown way beyond inflation.
3
We provided billions in aid to the airline industry after 9/11 and these same carriers turned around and filed bankruptcy to get rid of pension obligations they no longer wished to make good on. Companies in other industries have done the same.
Unless you have a similar outrage over this corporate dodging of debts and obligations, you have no business at all criticizing those seeking relief from crushing debt incurred in the form of student loans.
Unless you have a similar outrage over this corporate dodging of debts and obligations, you have no business at all criticizing those seeking relief from crushing debt incurred in the form of student loans.
21
OMG, the NYT found some sympathetic anecdote to posit that reneging on student loans should be easier.
Where were they when Greece wanted to default...that's right they were on the same page.
Where were they when Greece wanted to default...that's right they were on the same page.
1
Europe just agreed to help out Greece after years of demanding austerity.
For student debtors, we've already forced them to give up buying a house, getting married and having children. Isn't that enough? The overhang of student debt is holding back the economy, ensuring that the entire Obama tenure will underperform. Bringing millions of buyers back into housing markets will lead to a powerful recovery. The number of births in the US is at a ten-year low. Forgiving student debt will mean that college educated people can afford to have children, not just those born to people on public assistance.
That tens of millions of Americans have become debt slaves just because they bought into the notion of higher education should be left in the past like the Confederate flag.
For student debtors, we've already forced them to give up buying a house, getting married and having children. Isn't that enough? The overhang of student debt is holding back the economy, ensuring that the entire Obama tenure will underperform. Bringing millions of buyers back into housing markets will lead to a powerful recovery. The number of births in the US is at a ten-year low. Forgiving student debt will mean that college educated people can afford to have children, not just those born to people on public assistance.
That tens of millions of Americans have become debt slaves just because they bought into the notion of higher education should be left in the past like the Confederate flag.
8
@Rick- >>Europe just agreed, ...
NO SUCH THING, YOU'RE DREAMING. Greece agreed to tighten it's belt tighter, reduce pensions, alter retirement plans and police it's dreadfully leaky tax system. NO LOANS WERE FORGIVEN; where did you get that notion? Greece owes over $300 BILLION and remains indebted, as it should. As has been said previously, students were smart enough to get into college/university but didn't realize all the loan repayment documents they were signing were LOAN origination documents? The notion (also expressed) that if students don't get work in their chosen field of study the lending institution should eat the interest and/or loan: WHY? The lender didn't choose, approve, supervise or otherwise play any part in what the student did. This is crazy, people borrow money and then balk at repaying. Crazy.
NO SUCH THING, YOU'RE DREAMING. Greece agreed to tighten it's belt tighter, reduce pensions, alter retirement plans and police it's dreadfully leaky tax system. NO LOANS WERE FORGIVEN; where did you get that notion? Greece owes over $300 BILLION and remains indebted, as it should. As has been said previously, students were smart enough to get into college/university but didn't realize all the loan repayment documents they were signing were LOAN origination documents? The notion (also expressed) that if students don't get work in their chosen field of study the lending institution should eat the interest and/or loan: WHY? The lender didn't choose, approve, supervise or otherwise play any part in what the student did. This is crazy, people borrow money and then balk at repaying. Crazy.
Why is it that people don't see the connection between the gradual elimination of the ability to discharge student debt and the rise in tuition and student indebtedness?
As long as banks do not have to shoulder the risk of making huge loans to college students, who are years away from their first full-time job, they will continue to encourage students to take out larger loans, which will encourage colleges to keep raising tuition--creating the situation we have now of unsustainably high college tuition rates and high student debt.
As long as banks do not have to shoulder the risk of making huge loans to college students, who are years away from their first full-time job, they will continue to encourage students to take out larger loans, which will encourage colleges to keep raising tuition--creating the situation we have now of unsustainably high college tuition rates and high student debt.
6
For those who feel people with student loans have a moral obligation to pay their debt no matter what, doesn't higher education have an even higher moral obligation to tell students the truth about their career prospects and earning potential before they take on 5-6 figure debt? Also, parents need to stop telling their kids they have to go to college because its part of some big plan they've had since the kid was born. I went to college with a lot of kids who were not given a choice. And college isn't like high school. No one is calling home to tell your parents you didn't do your homework, or you don't pay attention, or you failed that midterm that counts for 30% of your grade. Maybe its time we change the narrative. College is not a fool proof path to future success. Its at best a stepping stool and at worst a very expensive hiatus from the real world.
2
Before my recent retirement, when I was practicing neuropsychology, I met a woman in her late 40s who described her situation:
She had attended nearly 2 years of college, doing well, when forced to quit to care for her sick mother (she was an only child). When her mother died she attempted to return to college (acquiring more debt) but was soon sidelined by her own health issues.
When she recovered enough to work part-time, still lacking a degree she was unable to repay her student loans. She took whatever jobs she could find, but never made enough to pay more than a fraction of the interest on her constantly burgeoning debt. Bankruptcy, of course, did not discharge it.
At last, with her health once again deteriorating (partly due to stress) she realized that even if she finally found a decent job most of her income would go toward paying off that decades-old student loan, yet an increased income (on paper) would disqualify her for the social services her life now depended on.
Laws intended to make sure she paid had backfired--she could NEVER pay back the loans, never return to school, and never work for more than a pittance. This ambitious woman had been destroyed.
She had attended nearly 2 years of college, doing well, when forced to quit to care for her sick mother (she was an only child). When her mother died she attempted to return to college (acquiring more debt) but was soon sidelined by her own health issues.
When she recovered enough to work part-time, still lacking a degree she was unable to repay her student loans. She took whatever jobs she could find, but never made enough to pay more than a fraction of the interest on her constantly burgeoning debt. Bankruptcy, of course, did not discharge it.
At last, with her health once again deteriorating (partly due to stress) she realized that even if she finally found a decent job most of her income would go toward paying off that decades-old student loan, yet an increased income (on paper) would disqualify her for the social services her life now depended on.
Laws intended to make sure she paid had backfired--she could NEVER pay back the loans, never return to school, and never work for more than a pittance. This ambitious woman had been destroyed.
55
Much to my chagrin I assumed some Stafford 'student' loans some years ago, not appreciating that the loans were plainly high-interest bank loans. I was subsequently told that the ONLY circumstances under which these loans can be discharged are total and permanent disability . . . and death. Period.
12
'...not appreciating that the loans were plainly high-interest bank loans...'
'Appreciating'?
You borrowed money and spent it, but did not bother to check out the terms?
How is this anyone's fault but yours?
'Appreciating'?
You borrowed money and spent it, but did not bother to check out the terms?
How is this anyone's fault but yours?
When I was young (back when dinosaurs roamed the earth [mid-1960s]) the CUNY colleges were tuition-free; my last year at Hunter (1969-70) cost something like a $45/semester student fee, plus books, subway tokens and lunch (most of us who were of standard college aged lived with Mom and Dad and so didn't have to pay room and board). The state colleges, around the country, if they weren't tuition-free were quite inexpensive. It didn't require going into massive debt to get a college education.
Step up to the plate, state legislatures--fund public higher education so that student loans are limited to those attending elite private colleges, not the average Joe or Judy.
Step up to the plate, state legislatures--fund public higher education so that student loans are limited to those attending elite private colleges, not the average Joe or Judy.
43
Exactly what Bernie Sanders is trying to do for educating our nation: free state college tuition. Check out his platform at www.berniesanders.com
2
Student loans are a complicated issue. On the one hand I am very grateful that I had the opportunity to obtain an education despite having absolutely no financial assistance from my family. On the other hand, the hundreds of dollars a month I'm spending to repay them is painful given the limited salaries and general wage stagnation of our economy. And I'm one of the more fortunate amongst the people I know paying loans. I worked in a law firm right out of college and started at $32k a year. The lawyers who had just graduated were paid bet $50-55k to start but their debt was 5-6x higher than us underlings who only had 4 yr degrees. Very few had the chops to eventually make it to a big firm with a substantial salary increase. I have friends getting or that have completed masters degrees only to find themselves not in a better position professionally and also saddled with additional dept. In a way student loans have effectively kept the lower and middle classes chained to debt for decades so they are unable to push back or go against the capitalist machine. If I start a business and it fails I can file bankruptcy and start over, but if their are no jobs in the field I secured an expensive degree in I'm stuck paying back student loans forever while working at the Gap and living with my parents or 5 roommates.
32
That college loans will be wiped-off the books in the near future is a virtual certainty.
The manner in which this will occur will be very similar to procedures already in place
at many federal agencies.
The Department of Education will contract out for a new integrated management information system capable of bringing together in one place all the data on outstanding college loans in the U.S.
The new system will replace the dozens of such systems the Department currently employs. It will be housed in a picturesque building on the banks of the Potomac designed to handle the requirements of the complex super-computers that will be housed there, at an approximate cost of $54 million to build and equip, not counting likely overruns.
In 3 to 5 years when the building is completed, the President of the U.S. and the head of the Dept. of Education will attend the opening ceremony and red, white and blue ribbons will be cut. Tours of the building will be conducted for distinguished visitors. A male file clerk spotting a comely young woman in the crowd will turn around at his desk to get a better look at her and accidentally brush his computer keyboard with his sleeve.
Voila!
The manner in which this will occur will be very similar to procedures already in place
at many federal agencies.
The Department of Education will contract out for a new integrated management information system capable of bringing together in one place all the data on outstanding college loans in the U.S.
The new system will replace the dozens of such systems the Department currently employs. It will be housed in a picturesque building on the banks of the Potomac designed to handle the requirements of the complex super-computers that will be housed there, at an approximate cost of $54 million to build and equip, not counting likely overruns.
In 3 to 5 years when the building is completed, the President of the U.S. and the head of the Dept. of Education will attend the opening ceremony and red, white and blue ribbons will be cut. Tours of the building will be conducted for distinguished visitors. A male file clerk spotting a comely young woman in the crowd will turn around at his desk to get a better look at her and accidentally brush his computer keyboard with his sleeve.
Voila!
1
Education has been turned into a business - with administrative hires and salaries trumping faculty expenditures.
Just another sign that Americans are moving in the direction of the mean standard of leaving, worldwide. Only the top 5% of Americans can afford to negotiate outrageous medical expenses, education expenses, and necessary expenses for shelter in America, today.
Living in America today is a stress-filled exercise for most people. The monied classes - aided by GOP greed and clueless neo-liberal philosophies have sent this nation into a downward spiral, the bottom of which most Americans could not have imagined even 20 years ago.
We're going to have to ride this out and hope that sanity prevails. Our intellectual and social diversity may save us, but as of now we have no group of leaders who are on the side of the average American.
Just another sign that Americans are moving in the direction of the mean standard of leaving, worldwide. Only the top 5% of Americans can afford to negotiate outrageous medical expenses, education expenses, and necessary expenses for shelter in America, today.
Living in America today is a stress-filled exercise for most people. The monied classes - aided by GOP greed and clueless neo-liberal philosophies have sent this nation into a downward spiral, the bottom of which most Americans could not have imagined even 20 years ago.
We're going to have to ride this out and hope that sanity prevails. Our intellectual and social diversity may save us, but as of now we have no group of leaders who are on the side of the average American.
22
When a law stops working because its very context has changed, it's time to change the law.
19
Time for the institutions that pump out degrees with little or no value to be taken to task. Student loans should not be made available for programs in fields that are already saturated or where the salary levels can't possibly meet basic living expenses and loan repayment.
The crime here is in educational and financial institutions and the government taking advantage of young adults with little or no financial planning experience or trusting older students who imagine these degree programs will actually provide them with better paying jobs.
Many of our most heralded educational institutions should be ashamed of the worthless degree factories they have created. The government has done nothing to stop what would be considered fraud if it were part of any non-educational institution or business... FALSE ADVERTISING!
Colleges and universities in the U.S. are the ones who should be taken to task and our government should quit condoning their lax approach to establishing viable degree programs by exercising more discriminating doling out of funds for loans. This would be the best way to protect people from student loans they can't possibly pay.
The crime here is in educational and financial institutions and the government taking advantage of young adults with little or no financial planning experience or trusting older students who imagine these degree programs will actually provide them with better paying jobs.
Many of our most heralded educational institutions should be ashamed of the worthless degree factories they have created. The government has done nothing to stop what would be considered fraud if it were part of any non-educational institution or business... FALSE ADVERTISING!
Colleges and universities in the U.S. are the ones who should be taken to task and our government should quit condoning their lax approach to establishing viable degree programs by exercising more discriminating doling out of funds for loans. This would be the best way to protect people from student loans they can't possibly pay.
10
Please correct the headline to: Judge rules that transferring your student debt to other people should be very difficult to do.
6
Too many Americans live in a virtual prison -- whether it is in an actual jail cell for decades for non-violent crimes, or up to their neck in debt for decades for student loans.
Either way, the sentence is too long.
Either way, the sentence is too long.
16
Another blow for individual responsibility, and another punishment for those who do the right thing.
Interest rates will rise when the debt is dischargeable. Why would the banks keep rates low? Because the guarantee is strong. Take that away, rates go up.
How about people stop studying things that make them unemployable? If you are taking out loans, give up on drama, art, English, etc, and study a trade or academic subject that will get you a job. It has worked for generations. My grandparents worked menial jobs and in turn, my parents went to college.
The only difference now is the welfare trough has gown.
It is the end on the USA as we know it.
Interest rates will rise when the debt is dischargeable. Why would the banks keep rates low? Because the guarantee is strong. Take that away, rates go up.
How about people stop studying things that make them unemployable? If you are taking out loans, give up on drama, art, English, etc, and study a trade or academic subject that will get you a job. It has worked for generations. My grandparents worked menial jobs and in turn, my parents went to college.
The only difference now is the welfare trough has gown.
It is the end on the USA as we know it.
12
If you're really a surgeon, I feel sorry for your patients.
How about we outsource surgery to the world-class doctors in Cuba, and cut out overpaying US med school graduates and their incessant whining about malpractice insurance and their own monstrous student loan debts?
And my history degree was instrumental in developing my ability to read, absorb, and analyze large amounts of information. This skill has been pretty helpful in the management-track jobs I've held in publicly-held corporations.
How about we outsource surgery to the world-class doctors in Cuba, and cut out overpaying US med school graduates and their incessant whining about malpractice insurance and their own monstrous student loan debts?
And my history degree was instrumental in developing my ability to read, absorb, and analyze large amounts of information. This skill has been pretty helpful in the management-track jobs I've held in publicly-held corporations.
4
No, difference between your grandparents' time and now is the difference between the cost of a degree relative to salaries. When I was young (and I guess I'm younger than your grandparents) one could pay one's way through a state school working part time and summers at minimum wage.
2
And how do you know what course of study will land you a job???
I would give the opposite advice: Study the things that interest you the most. I hate to see young people betraying their potential because the older generation thinks that a degree should amount to a job. We perform best at the things we love.
I speak as someone from the older generation who has done quite well with two degrees in philosophy, which, even when I was earning them, were not considered a wise course of study from a practical point of view. But that was shortsighted. When you have a mind trained to to think logically and to discern fine distinctions, and you live in a world in which many people can't think their way of a paper bag, it's amazing how employable you are.
I'm appalled by the amount of student debt in this country; things were quite different when I was young. I went to school entirely on scholarships and fellowships, but a degree at a respectable state school certainly didn't tun up debts of the magnitude that students face today. I don't think telling students to give up what they love so as to ensure them a job is the way to go, however. My parents (working class, no college) never tied education to a job, and as far as I'm concerned, that is one of the things they got exactly right. And my impression is that most parents err on this point these days and cause a lot of family turmoil in the process.
I would give the opposite advice: Study the things that interest you the most. I hate to see young people betraying their potential because the older generation thinks that a degree should amount to a job. We perform best at the things we love.
I speak as someone from the older generation who has done quite well with two degrees in philosophy, which, even when I was earning them, were not considered a wise course of study from a practical point of view. But that was shortsighted. When you have a mind trained to to think logically and to discern fine distinctions, and you live in a world in which many people can't think their way of a paper bag, it's amazing how employable you are.
I'm appalled by the amount of student debt in this country; things were quite different when I was young. I went to school entirely on scholarships and fellowships, but a degree at a respectable state school certainly didn't tun up debts of the magnitude that students face today. I don't think telling students to give up what they love so as to ensure them a job is the way to go, however. My parents (working class, no college) never tied education to a job, and as far as I'm concerned, that is one of the things they got exactly right. And my impression is that most parents err on this point these days and cause a lot of family turmoil in the process.
4
Tuitions for higher ed need to be regulated like health insurance premiums. Most universities spend tons on dormitories, student centers, and fancy gyms, instead of facilities for students to use for learning. Today many hospitals and universities look like resorts. Since states can no longer collect as much taxes as before, the burden is placed on students and their families. Now only the rich can afford higher education. This is no democracy.
11
Lower the interest rate to 2-3%, but do not wipe out the debt, as it does not magically disappear, the taxpayers pay the bill.
It is unfortunate that so many people borrow money without any concept of how much they will owe and how long it will take to pay back, but it is hardly surprising, as the same people major in fields without doing due diligence as to job prospects.
Even before the internet existed, many people went to the library to research careers, as the point of a college education for all but the richest amongst us is to earn a good living in a field with plenty of jobs.
It is noticeable that many comments from people with student loans never mention what their degree is in, but rest assured it is not in Pharmaceutical Sciences or even Accounting.
Newsflash: There were no good paying jobs for anyone with a Fine Arts degree even 30 years ago and any degree with '...Studies' in it is just about worthless. And, no, you cannot 'be anything you want', no matter what your parents told you. No one can. Accept it and move on.
It is unfortunate that so many people borrow money without any concept of how much they will owe and how long it will take to pay back, but it is hardly surprising, as the same people major in fields without doing due diligence as to job prospects.
Even before the internet existed, many people went to the library to research careers, as the point of a college education for all but the richest amongst us is to earn a good living in a field with plenty of jobs.
It is noticeable that many comments from people with student loans never mention what their degree is in, but rest assured it is not in Pharmaceutical Sciences or even Accounting.
Newsflash: There were no good paying jobs for anyone with a Fine Arts degree even 30 years ago and any degree with '...Studies' in it is just about worthless. And, no, you cannot 'be anything you want', no matter what your parents told you. No one can. Accept it and move on.
9
Still believe people can be anything they want. What they should not want to be, though, is stupid, and that is what taking out more debt than one can manage for an expensive 'education' is.
What I see hear is an opportunity for 'higher ed' to become a kind of late-adolescent welfare state, wherein people with no work history and a limited work ethic take on massive amounts of debt and then walk away from the debts when they are due, because life is too hard to require them to pay back what they owe. Kind of a decline and fall 'twofer,' combining both dumbing down and infantilzation. So progressive! Can't wait to start bailing other people out.
What I see hear is an opportunity for 'higher ed' to become a kind of late-adolescent welfare state, wherein people with no work history and a limited work ethic take on massive amounts of debt and then walk away from the debts when they are due, because life is too hard to require them to pay back what they owe. Kind of a decline and fall 'twofer,' combining both dumbing down and infantilzation. So progressive! Can't wait to start bailing other people out.
The problem with student loans is not necessarily the interest rate (although, for loans that are so secure for the lender, the fact that the cap on these loans can go as high as 9% for govt loans and even higher for private lenders is, frankly, criminal). The problem is all of the fees and other manoeuvres that add to the balance such as compounding. Loan balances can balloon way beyond the amount of debt taken out in ways that even diligent students could not anticipate. Remember, students taking out these loans are still very young. They are not even old enough to drink, but they are considered old enough to sign away their lives! 20 years ago, I took out over $100,000 in student loans when I was fresh out of undergrad to attend law school. I was attending a top 5 school, got a good job afterwards, lived frugally, and paid off my loans in 3 years. But even though I thought I had educated myself, I was caught short by the capitalization of interest that I did not pay during the 3 years I was in school. It added over $10,000 to my loan principle. When I was taking on my loans, I just did not appreciate what the capitalization term meant. And believe me, nobody, including my school's financial aid officers, made any effort to highlight this term. A lot of people have an interest in young people with little to no experience in the adult world of finance not appreciating the implications of the fine print on their loans. Enhanced disclosure might help.
1
Forgiving student loan debt is just like forgiving Greek debt. Neither is acceptable in any way, shape or form. If you accept a loan in good faith, then you need to repay the loan according to the terms of the agreement. Begging for a loan deferment is breaking your word, and your word is all you have in life.
5
In Europe & other parts of the world higher education is considered a Human Right where the government pays not only for educational costs but provides a stipend so students can focus solely on their education. They see that an educated society benefits all. I believe its a moral atrocity to strap our kids to student loan debt while more privileged children, (including my own) never have to worry about such burdens. We need to stop looking at students as villains in this country who wish to rid themselves of debt they never deserved to incur...Let's hope humanity evolves to a place where higher education is one day viewed as a human right..
21
It is a mystery to me why the cost of getting a degree has become so expensive. When I enrolled in Purdue University years ago, my tuition and fees were $180 per year and living in some rather dank places, I had money in the bank when I graduated.
Today for profit diploma mills charge hug fees for diplomas that are not worth the paper they are written. This has gone on for many years - why are our politicians not doing anything about this rip-off. The diploma mills have lots of money and as a result we have the best politicians money can and does buy.
Today for profit diploma mills charge hug fees for diplomas that are not worth the paper they are written. This has gone on for many years - why are our politicians not doing anything about this rip-off. The diploma mills have lots of money and as a result we have the best politicians money can and does buy.
12
Colleges themselves play a role in this indebtedness. They figure out what you can pay and where you can best get the money to do so. If you get a scholarship, they reduce the amount of aid available. And when the final cost is outlined, the colleges do everything they can to sign up kids or their parents for loans, either federal or private. And for those moralizing about how people need to pay their debts and keep their word, okay, lets eliminate bankruptcy altogether. No matter what you do, no matter how badly the economy tanks, health crises intervene, etc., if you owe money to a private entity you have to pay it. How would that work?
If banks can get bailed out, so can our kids.
If banks can get bailed out, so can our kids.
1
Part of the problem is obviously the interest rate. It is usury. I have a lower interest rate for buying a house. Not fair at all. (And it is awful how much college costs and the debt we saddle these youngsters with is untenable.)
11
Why is that unfair? The home loan is secured by a tangible good (the house), which the bank can take possession of and sell if you default, to recoup their money. They cannot do that with a person's education. I would be surprised if the home loan rate was higher.
The Brunner test does not appear draconian to me, including the third prong - "that situation is likely to persist for a significant part of the repayment period." If the economic situation of the individual is likely to change then the debt should be paid.
2
What about people who become disabled after entering college? Mental illness, automobile accidents, PTSD from sexual assault and many other misfortunes can all befall college students and cause disabilities that make them unable to finish or unable to work. Should we soak the disabled because illnesses and accidents happen? Should disabled people who started college starve to pay for student loans? What if someone becomes disabled shortly after finishing college and can no longer work? Should they starve to pay a big lender? Don't get me started on the fact some lenders have gone after the parents of deceased students for the loan.
11
What about the 99.999999% who can work after college?
Unfortunately there are no free lunches or guarantees in life. When people evade school loan obligations, the burden is shifted to taxpayers, bank depositors, pension funds holding bank stocks, and insurance companies. The consequences can have broad repercussions -- it is not sticking it to the one percent.
In addition, the public has been supportive of student needs over the years. It has funded state colleges and universities and supported favorable borrowing rates and tax deductions for student loan interest.
Welcome to the real world.
In addition, the public has been supportive of student needs over the years. It has funded state colleges and universities and supported favorable borrowing rates and tax deductions for student loan interest.
Welcome to the real world.
7
Make the loans dischargeable, but then make them subject to prudent loan underwriting. If that seems unfair, perhaps there is a reason then can not be discharged.
1
Many of these people have been unemployable for decades, someone should have told them not to waste their money on more education to silk purse their sows ear
2
Thanks to our corrupt, bought-and-paid-for congress, students and their parents are now slaves to student loan debt. Many parents will be paying these debts out of their Social Security checks. Money in politics brought us to this point and, until we remedy that, there is really no hope for America.
11
Donald Trump has had 4 corporations file for bankruptcy 4 times- the last in 2009- despite his personal wealth and his "10 billion dollars".
Where is is personal responsibility? Did Mr. Trump not know that he was taking on too much debt? What about his creditors?
But an average 40-50 year old struggling to pay bills, perhaps taking care of an ailing parent, he or she has to prove that the future is hopeless just to get any help. Why is this not demanded of corporations?
Where is is personal responsibility? Did Mr. Trump not know that he was taking on too much debt? What about his creditors?
But an average 40-50 year old struggling to pay bills, perhaps taking care of an ailing parent, he or she has to prove that the future is hopeless just to get any help. Why is this not demanded of corporations?
116
Corporations borrow money from private investors who have the opportunity to perform due diligence and can either invest or not in the corporation given the results of under writing. The USG hands out money to all applicants without performing any due diligence as to whether a recipient can ever replay the loan. If the USG acted like investors in corporations there would be a lot fewer student loan defaults and a lot less money lent out to students.
That is how Trump became super rich. He has been able to weasel out of debts numerous time leaving debt holders on the limb. Yet from what I read Americans, seem to admire him instead of making him pay up. But Americans admire the rich famous or infamous. Someone poor gets no sympathy on debt relief. Every time corporations are asked to pay social dues their CEO and Republicans scream "job killer" and the public believes this. My suggestion is kick out the bums completely in the next election cycle. Get mad and do your part.
It shouldn't be any more difficult to discharge student loan debt than the case of any other debt.
I don't think most people realize that student loans are classed with things like fines and penalties and are treated worse than things like gambling debts or mortgages on vacation homes.
Politicians need to take a break from promising things like "no debt education" in the future and focus on dealing with present day matters like existing debt where their promises can be actually measured. This is a situation that won't go away and will get worse with time.
I don't think most people realize that student loans are classed with things like fines and penalties and are treated worse than things like gambling debts or mortgages on vacation homes.
Politicians need to take a break from promising things like "no debt education" in the future and focus on dealing with present day matters like existing debt where their promises can be actually measured. This is a situation that won't go away and will get worse with time.
9
BANKSTERS AND ECONOMIC TERRORISTS have gamed themselves into the position of oppressing students from the 99% to favor the 1% of wealthy banksters and economic terrorists. The idea that students who begin higher education in earnest should acquire a permanent debt is clearly discriminatory against the 99%. What with higher education bringing less and less return on the investment every year, while tuition rises higher and higher, pretty soon we're going to see people completing certifications and degree equivalents using free online courses. The grad school I attended between 1969-71 cost $2,000 per year full time! Now the same course of study at the same place would cost upwards of $200,000. When I speak with high school students, I encourage them to do as much college level work for free while still in high school, especially for gifted kids in advanced placement courses. This is one place where trickledown will be effective--free online college education! The start will be with free university community colleges after high school, which will rely more and more on free online courses reviewed and accredited by each school. Higher cost institutions had better be ready for the leapfrogging that will happen during the next few decades. For the times they are a-changing!
8
In 1976, state funding paid for 76% of student costs. Now, after decades of happy tax-cutting, it pays for 17% in my state. Guess who's on the hook for the rest. Discussions of college costs which omit this factor are really missing the elephant in the room. If you don't pay taxes, you don't have public goods and services. And the costs fall on us individually, whether for education or medical care, retirement or natural disaster. Some who feel safe in their wealth want that, thinking they'll come out ahead. But for a nation of 370,000,000 people, it's a disaster in itself, a growing one.
8
Virtually every corporate debtor can have its debt reduced or discharged. Businesses and individuals write off business-related debts each day. Contracts are rewritten, union benefits are scaled back (this happened in the GM bankruptcy), sole proprietors that get into trouble can have their debts expunged. The difficulty in discharging student loan debt and certain consumer debts results from certain "giveaways" to the big banks by Congress at the time that the bankruptcy laws were last amended. The consumers -- students and their families -- had no one at the table to advocate on their behalf. As a result, their debts were placed in a separate category, and they are forced to repay exorbitant amounts in interest and penalties, even if they have no chance of obtaining a job. They are also excoriated as "immoral" if they file bankruptcy -- i.e., try to use the same process that high-rollers employ each day to restructure or expunge debt.
The censorious critics on this site should try going down to 1 Bowling Green in lower Manhattan -- the S.D.N.Y. bankruptcy court, open to the public -- and sitting in on a couple of bankruptcy hearings. They will learn that people such as Janet Roth are asking only for what every business person or individual with business-related debt obtains each day: a clean start. Ask Donald Trump; he's been down there a few times himself.
The censorious critics on this site should try going down to 1 Bowling Green in lower Manhattan -- the S.D.N.Y. bankruptcy court, open to the public -- and sitting in on a couple of bankruptcy hearings. They will learn that people such as Janet Roth are asking only for what every business person or individual with business-related debt obtains each day: a clean start. Ask Donald Trump; he's been down there a few times himself.
11
Another trial balloon article from the NYT for rewarding deadbeats at taxpayers' expense. Judges Pappas and Kaplan and any other interested parties can start a charity to pay off the debt willing incurred by borrowers who now decide they rather not repay the loans. This taxpayer and millions of others are not interested in having our pockets picked.
4
The student loan problem is really an indication of our society's lack of support for education, a lack of support that our economy -- and the rest of us -- ultimately pays for in weaker consumers.
1
I am a New Jersey Bankruptcy lawyer and have represented clients experiencing serious debt problems for many years. My thanks to Ms. Bernard for her excellent article about discharging student debt in Bankruptcy. The decisions of bankruptcy judges discussed in the article, and more generally those that govern personal debt, are too often influenced by the privileged circumstance into which judges are born, and by their own lives, which have been - for the most part- predictable and successful. Perhaps the unspoken assumption of some judges that unmanageable debt is the result of irresponsible behavior or a lack of effort has changed recently. The 'Great Recession' has reminded us that " The race is not to the swift nor the battle to the strong, nor does food come to the wise or wealth to the brilliant or favor to the learned; [b]but time and chance happen to them all." Ecclesiastes 9:10-12
8
An excellent addition to this otherwise fine article would be the high cost of lawyers in preventing the discharge of student debt. For instance, one bankrupt parent was unable to proceed because he couldn't afford the $6,000 a lawyer would have charged to discharge his daughter's ballooning debt. Not everyone can proceed by him- or herself. The process is not simple.
7
The short version of how courts have interpreted undo hardship is that the judge asks if the borrower is dead. If the answer is no, repaying the loan does not qualify as an undue hardship. The standard has made a mockery of bankruptcy protection and needlessly ruined countless thousands of Americans' lives.
9
There should be 2 types of student loans. Type A is hard/impossible to wipe out and Type B is like any other debt. Presumably the interest rates on B would be higher than A to adjust for the risk of default. Just like when a homebuyer decides between variable or fixed interest rates.
This doesn't help the situation for existing loans, but would help future debtors.
This doesn't help the situation for existing loans, but would help future debtors.
2
Making loads that the lender KNOWS will likely NOT be repayable is what took down our US economy and now that of Greece. When is a lender supposed to suffer the consequences of "risk" instead of rewriting the laws to guarantee repayment? Isn't risk the reason we let people charge astonishing interest? Not to mention that for student loans there is ZERO risk because the holder of the loan is mostly the US Gov. We the people are making gobs of money off the backs of the students, including my own son. Despicable.
1
Did the lender force your son to borrow money and spend every dime?
I'm sorry but there is no scenario at all when I want to pay the debts of someone who took out student loans and did not pay, and by forgiving student loans I, as a taxpayer, are effectively paying the loans for them. What court do I show up at when I feel its unfair that I continue to pay my home mortgage?
6
My student loans are $307 and some change per month. They're set to be paid off when I'm about 80 years old. (I'm 53 now.)
It's not a burden currently, but frankly I don't feel secure in my job. There were layoffs this year, and next year is unlikely to be better. I'd have a hard time replacing the income if I lost this job.
I'm also planning on moving in with my mom in a few weeks, because she has Alzheimer's. This will increase my daily commute from 1 hour each way to 1 1/2 hours each way. I'd like to find a job closer to her house, but, again, I'd have to take a cut in pay which would likely make that $307 per month much more painful.
And, of course, after I retire, that monthly payment will be a serious burden, possibly to the end of my life.
It's not a burden currently, but frankly I don't feel secure in my job. There were layoffs this year, and next year is unlikely to be better. I'd have a hard time replacing the income if I lost this job.
I'm also planning on moving in with my mom in a few weeks, because she has Alzheimer's. This will increase my daily commute from 1 hour each way to 1 1/2 hours each way. I'd like to find a job closer to her house, but, again, I'd have to take a cut in pay which would likely make that $307 per month much more painful.
And, of course, after I retire, that monthly payment will be a serious burden, possibly to the end of my life.
4
Bankruptcy is already too easy..... Also the federal backed loans are part of the reason why college tuition has gone up so much.
2
It's time for people to take responsibility and honor their commitments.
High time.
High time.
5
Never get sick.
1
I wonder why lenders don't seem to apply any sort of lending standards to student loans? Oh, yes, that's right. They know Federal student loans are guaranteed and that it is extremely hard to have the debts discharged. So why should they use lending standards? What is the upside to them?
Let's make student loan debt dischargeable, just like other debt. Then lenders will have to look at things like credit reports on both the borrower and co-signer, the potential future earnings of the borrower, etc. My guess is a lot less student loans would be made. And colleges would have to respond, or go out of business. Who knows? Tuition might even come down. (Not likely I know.)
Right now, the lenders have little at-risk. Let's change that.
Let's make student loan debt dischargeable, just like other debt. Then lenders will have to look at things like credit reports on both the borrower and co-signer, the potential future earnings of the borrower, etc. My guess is a lot less student loans would be made. And colleges would have to respond, or go out of business. Who knows? Tuition might even come down. (Not likely I know.)
Right now, the lenders have little at-risk. Let's change that.
7
in your world people (particularly people of color) would be screaming about the loan practices being unfair, and likely lawsuits alleging racism.
1
Okay, so on one side, we have financially sophisticated, ruthless people, who have money to lend. Others have a very expensive product - education - to sell. Together they own and operate a number of congressmen who rubber-stamp laws written by the lenders, laws that allow predatory loans to indenture students for a lifetime. Other laws will allow the 'educators' to raise the price of their product without any controls whatsoever, and without any guarantees whatsoever.
On the other side, we have several million financially unsophisticated, unworldly but teachable young people. Because the national economy can not absorb them into a decent starter job, they decide to go to college. If they've chosen that college well, over the next several years they will acquire some very expensive but useful information about how the world works, along with saleable skills.
Along the way, they will forget that what they (and 99% of this nation) are really waiting for the recovery of this nation's ailing economy, as we try to outlive the damage done by the greed and ineptitude of decades of Republican presidents and Kochpublican congressmen. The Kochlicans will continue to export whole industries while muttering about the shortcomings of U.S. workers. The lenders will rage against the moral weakness of minimum-wage college graduates who, for some reason, can't pay hundreds of dollars a month for an education that is effectively useless.
What could possibly go wrong?
On the other side, we have several million financially unsophisticated, unworldly but teachable young people. Because the national economy can not absorb them into a decent starter job, they decide to go to college. If they've chosen that college well, over the next several years they will acquire some very expensive but useful information about how the world works, along with saleable skills.
Along the way, they will forget that what they (and 99% of this nation) are really waiting for the recovery of this nation's ailing economy, as we try to outlive the damage done by the greed and ineptitude of decades of Republican presidents and Kochpublican congressmen. The Kochlicans will continue to export whole industries while muttering about the shortcomings of U.S. workers. The lenders will rage against the moral weakness of minimum-wage college graduates who, for some reason, can't pay hundreds of dollars a month for an education that is effectively useless.
What could possibly go wrong?
5
No sympathy
These people had a choice. Incur debt or pass. They were tricked into incalculable debt, but, considering they were smart enough to graduate from High School, they made, in their mind, with their education, a rational choice.
Can I say I made a mistake in my mortgage? Can I say, despite a ream of paper, I made an irrational choice in the credit cards I chose?
No.
People like Trump can dump the investments of thousands by bankruptcy. And he's leading in polls.
So what?
What ever happened to personal responsibility?
These people had a choice. Incur debt or pass. They were tricked into incalculable debt, but, considering they were smart enough to graduate from High School, they made, in their mind, with their education, a rational choice.
Can I say I made a mistake in my mortgage? Can I say, despite a ream of paper, I made an irrational choice in the credit cards I chose?
No.
People like Trump can dump the investments of thousands by bankruptcy. And he's leading in polls.
So what?
What ever happened to personal responsibility?
6
There is little reward for personal responsibility. Victimhood, on the other hand, has a great deal of cachet.
Um, no, actually if your mortgage or credit cards turn out to be too much for you, you can: you are perfectly able to walk down to the bankruptcy court and have those debts discharged. Bankruptcy protection is available to everyone, not just the Donald Trumps of the world. Everyone except for people with crippling student loans, that is.
2
Virtually every corporate debtor can have its debt reduced or discharged. Businesses and individuals write off business-related debt each day. Contracts are rewritten, union benefit are scaled back (this happened in the GM bankruptcy), sole proprietors who get into trouble can have their debts expunged.
The difficulty in discharging student loan debt and certain consumer debts result from "giveaways" to the big banks when the bankruptcy laws were last amended. The consumers -- students and their families -- had no one at the table to advocate on their behalf. As a result, they are placed in a separate category, forced to repay exorbitant amounts in interest and penalties even if they have no chance of obtaining a job and excoriated as "immoral" if they file bankruptcy -- i.e., try to use the same process that high-rollers employ each day to restructure or expunge debt.
The censorious critics on this site should try going down to 1 Bowling Green in lower Manhattan -- the S.D.N.Y. bankruptcy court, open to the public -- and sitting in on a couple of bankruptcy hearings. They will learn that people such as Janet Roth are asking only for what every business person or individual with business-related debt obtains each day: a clean start.
Ask Donald Trump; he's been down there himself.
The difficulty in discharging student loan debt and certain consumer debts result from "giveaways" to the big banks when the bankruptcy laws were last amended. The consumers -- students and their families -- had no one at the table to advocate on their behalf. As a result, they are placed in a separate category, forced to repay exorbitant amounts in interest and penalties even if they have no chance of obtaining a job and excoriated as "immoral" if they file bankruptcy -- i.e., try to use the same process that high-rollers employ each day to restructure or expunge debt.
The censorious critics on this site should try going down to 1 Bowling Green in lower Manhattan -- the S.D.N.Y. bankruptcy court, open to the public -- and sitting in on a couple of bankruptcy hearings. They will learn that people such as Janet Roth are asking only for what every business person or individual with business-related debt obtains each day: a clean start.
Ask Donald Trump; he's been down there himself.
6
The real question is why it has taken so long for judges to speak out against unfair laws that don't merely impose an unjust burden on people, but tie judges' hands as well?
Also, if corporate persons are allowed (and even encouraged by Wall Street) to use bankruptcy as a strategic tool to "unlock shareholder value" by freeing themselves from creditors, employees, pensions, and unions, why shouldn't non-corporate persons in genuine need have a way to discharge student debt the same way they can discharge any other debt?
The law, as it stands, is grossly unfair. It not only needs to acknowledge the reality of today's student debt burden and job prospects, but the inappropriate abuse of bankruptcy by corporations. But of course, the law benefits banksters by "privatizing profit and socializing loss," and allows a flourishing collection industry to collect exorbitant rents. Lobbyists and donors for those industries would never allow their elected officials to derail the gravy train. And that's even more grossly unfair.
Also, if corporate persons are allowed (and even encouraged by Wall Street) to use bankruptcy as a strategic tool to "unlock shareholder value" by freeing themselves from creditors, employees, pensions, and unions, why shouldn't non-corporate persons in genuine need have a way to discharge student debt the same way they can discharge any other debt?
The law, as it stands, is grossly unfair. It not only needs to acknowledge the reality of today's student debt burden and job prospects, but the inappropriate abuse of bankruptcy by corporations. But of course, the law benefits banksters by "privatizing profit and socializing loss," and allows a flourishing collection industry to collect exorbitant rents. Lobbyists and donors for those industries would never allow their elected officials to derail the gravy train. And that's even more grossly unfair.
9
Further, considering that the security of student loans has fundamentally changed since the Brunner test was introduced, the question is why the courts have not done what they do all the time in other scenarios and distinguished the facts of modern cases from the facts at the time Brunner was handed down in order to effectively overrule it.
Sad that our people have to live like this. Taxes are already high and it takes a lot to pay them but such a boost is a thing that not everybody can cope with. Instead of making our life easier official do everything to make it harder and harder.
1
If student loans are to be forgiven, what's in it for those of us who resisted the temptation to take one in the first place (and no, we weren't all completely subsidized by Mommy and Daddy, and anyway Mommy and Daddy weren't made of money)? Can we have our mortgages forgiven? It seems only fair.
3
If college tuitions were reduced by at least half, many students would not need loans or would need much smaller loans. Of course, in order to reduce college tuitions, the compensation and fringe benefits of college administrators and professors would have to reduced as well. The federal government should mandate a cap of $125,000 per year for all salaries paid by public colleges and universities and schools that receive any government funding. That would reduce the cost of a college education and help the middle class much more than loans.
1
You mean college administrators not professors. I know few professors who make over $125K a year.
2
Good luck retaining faculty in law, medicine, economics, and engineering with that salary cap. By the way, most humanities faculty at public colleges, I'd guess, earn less than 125000 annually (not to mention the countless adjuncts and lecturers and part-timers, many of whom earn poverty wages).
Much of the increase in the cost of college is due not to rising salaries but to the consistent decline in state funding for universities.
As the Washington Post notes,
"Researchers found that the money public colleges collect in tuition surpassed the money they receive from state funding in 2012. Tuition accounted for 25 percent of school revenue, up from 17 percent in 2003. State funding, meanwhile, plummeted from 32 percent to 23 percent during the same period. That’s a far cry from the 1970s, when state governments supplied public colleges with nearly 75 percent of their funding, according to data from the Federal Reserve Bank of Cleveland."
Much of the increase in the cost of college is due not to rising salaries but to the consistent decline in state funding for universities.
As the Washington Post notes,
"Researchers found that the money public colleges collect in tuition surpassed the money they receive from state funding in 2012. Tuition accounted for 25 percent of school revenue, up from 17 percent in 2003. State funding, meanwhile, plummeted from 32 percent to 23 percent during the same period. That’s a far cry from the 1970s, when state governments supplied public colleges with nearly 75 percent of their funding, according to data from the Federal Reserve Bank of Cleveland."
1
There's really no such thing as "wiping out student loan debt"; the money has been spent and someone has to pay. If the taxpayers can get stuck with the debt, this will further encourage colleges and universities to increase the already exorbitant salaries and benefits of "administrators" and others who profit from the availability of student loans. Taxpayers should not be in the student loan business, and the ultimate solution is for public higher-ed to return to the much cheaper model of a service provided by modestly-paid public servants.
21
Same thing happens when corporations stiff creditors in bankruptcy. There is no policy reason why student loans should be treated differently.
Ah, yes, let's require instructors to have Ph.D.s and Master's degrees and then pay them $35,000 per year. That'll get them in the door begging to teach.
Yeah - no. The solution is for the wealthy to pay taxes at rates they should be paying and for wages to increase so that the middle class and working poor can be taxed appropriately, as well.
Your solution smacks of privatization. Read a history book to learn about societies in which only a few can read, write, and analyze.
Would be nice if the anti-tax crowd, for once, directed its ire to billionaires' subsidies, rather than at the single mother trying to make something of herself. She isn't the one costing you.
Yeah - no. The solution is for the wealthy to pay taxes at rates they should be paying and for wages to increase so that the middle class and working poor can be taxed appropriately, as well.
Your solution smacks of privatization. Read a history book to learn about societies in which only a few can read, write, and analyze.
Would be nice if the anti-tax crowd, for once, directed its ire to billionaires' subsidies, rather than at the single mother trying to make something of herself. She isn't the one costing you.
1
Not totally true. For many people a large chunk of their loans is not "money that has been spent" by the public, but fees and penalties that are no more than a windfall for the government on behalf of the taxpayer. So all of us, as taxpayers, are effectively giving ourselves a tax break off the back of the debtors hit with the usurious penalties. And for private loans, you are really talking about giving a gift to the shareholders of those companies; it has nothing to do with you and me except in our role as shareholders, most likely through our 401(k)s and the like. Personally, I have no interest in making my money through taking advantage of those least able to afford it. Profiting in such circumstances feels too much like blood money.
2
Many of these commentators are so tiresome.
THey rant on about "moral" obligation. Well they don't say that when the debtor in bankruptcy is a corporation or city seeking to wipe out the wages it agreed to pay & cut them or dump its pension obligations. Then they snigger & say 'serves those workers right - they don't deserve the pay or pension.
Fact: When student loans were more easily dischargeable, interest rates were the same or lower than now.
Fact: Without Federal Student Loans (started after WWI for GIS & 1960s for all) ONLY those from the top 10% income households could afford college.
Fact: No one - no one at all - knows exactly how their life will go. They do not KNOW that they will never get ill, never have family get ill, never have trouble finding a job after losing one at age 45 or 55, never have anything go wrong & always have a well-paying job to pay the student loans.
When borrowers take out student loans, it is in the hope that they will be able to get a better job - they are gambling on the future.
The future can often not work as hoped & planned. For the vast majority, the bet pays off - but not for all.
BTW, 50% of new engineers can NOT FIND A JOB. We have too many with degrees in all fields & not enough jobs needing the degree.
BTW If you wanna whine about colleges wasting money, then start with the obscene salaries for football & basketball coaches - highest paid college staff are coaches & it is in the $ millions for 1 of them.
THey rant on about "moral" obligation. Well they don't say that when the debtor in bankruptcy is a corporation or city seeking to wipe out the wages it agreed to pay & cut them or dump its pension obligations. Then they snigger & say 'serves those workers right - they don't deserve the pay or pension.
Fact: When student loans were more easily dischargeable, interest rates were the same or lower than now.
Fact: Without Federal Student Loans (started after WWI for GIS & 1960s for all) ONLY those from the top 10% income households could afford college.
Fact: No one - no one at all - knows exactly how their life will go. They do not KNOW that they will never get ill, never have family get ill, never have trouble finding a job after losing one at age 45 or 55, never have anything go wrong & always have a well-paying job to pay the student loans.
When borrowers take out student loans, it is in the hope that they will be able to get a better job - they are gambling on the future.
The future can often not work as hoped & planned. For the vast majority, the bet pays off - but not for all.
BTW, 50% of new engineers can NOT FIND A JOB. We have too many with degrees in all fields & not enough jobs needing the degree.
BTW If you wanna whine about colleges wasting money, then start with the obscene salaries for football & basketball coaches - highest paid college staff are coaches & it is in the $ millions for 1 of them.
236
Football and basketball programs are important sources of revenue for the schools.The better the teams, the more revenue they generate for the schools. Coaches are the single most important factor is college team sports success. They are often worth every penny they make. Allowing judges to discharge student debt will result is fewer loans and higher interest rates for students because the capital markets will assess that debt as much riskier. And asking taxpayers to guarantee debt repayment by students is absurd.
1
Unfortunately, the students who make all that possible have to wait until they turn pro to reap the rewards. But, you're right. Athletes should not be the highest paid people in our society. It disgusts me so much that I have given up all team sports.
2
Oh, please. Two wrongs don't make a right. People need to take responsibility and live up to their commitments for a change. And pointing to corporations or football coaches is simply deflecting the issue, a tactic that unfortunately seems all too typical today.
3
Why should people with education loans be treated differently in bankruptcy from large corporations or wealthy property developers who go belly-up and walk away unscathed to build another day? It's just another case of favoring corporate and banking interests over those of ordinary people. Meanwhile, student debt is crippling many young people, who can't even imagine buying homes or cars or starting families. Yeah, I know, they should have thought of that before they took on the debt. But one of the reasons college costs have soared is because of the collusion between the government, banks and schools to make college "affordable" by loaning money. And just try launching a career, or even getting a decent job without college. Even with a degree it's not easy. Bankruptcy is not a crime, and its benefits should extend to the little people as well as the wealthy and powerful.
173
Bankruptcy is a whole different thing for Todd Christley than my daughter and her husband.
Excellent response.
It is ridiculous that universities direct students to loans as part of the financial aid package. Financial aid should consist of things that do not burden students, such as scholarships (a tiny pool shrinking inward from the margins) and work/study where students can schedule their commitment to the work around their classes. Universities have stopped giving scholarships because of cut-backs to education budgets and high salaries to the burgeoning administrative staff and coaches. Shame on us all for allowing this.
Not all that long ago I recall being told of how law students did it. Nearing graduation, law students got numerous credit card pre-approval notices with rather high credit limits (all based on the expected future income). The students accepted the cards and upon graduation took out the maximum cash advance which they used to pay off their students loans. Shortly after these now lawyers filed for bankruptcy and their credit card debts were wiped off. Sure their credit scores took a beating but they knew the law and it would only affect them for 5 years. After the 5 years, they were Scott free.
50
That fairytale you were told was spun by the American Bankers' Association and their business partners in Congress in the 1970's. The FACTS were that of all the bankruptcies that took place when student loans were fully dischargeable during bankruptcy, student loan debt was the largest component in less than 1% of the cases.
The "lawyers and doctors running from graduation to bankruptcy court" soap opera was concocted by the banking industry as part of the effort to deflect attention from the stagflation of the time. Also, the animosity towards higher education and college students was running high at the time (and it still is) due to student protests against our military failure in Vietnam.
Evidence by the Congressional Budget Office and other reputable entities including the Federal Bankruptcy Courts themselves at the time soundly disproved the charges, but right-wing ideology won the day. And people like you are still buying into it.
The "lawyers and doctors running from graduation to bankruptcy court" soap opera was concocted by the banking industry as part of the effort to deflect attention from the stagflation of the time. Also, the animosity towards higher education and college students was running high at the time (and it still is) due to student protests against our military failure in Vietnam.
Evidence by the Congressional Budget Office and other reputable entities including the Federal Bankruptcy Courts themselves at the time soundly disproved the charges, but right-wing ideology won the day. And people like you are still buying into it.
7
You were and are the victim of "conservative" mythology. BK Yale and Harvard students favorite corporate dodge. Donald Trump never met a bankruptcy he did not like, so sauce for the goose, good for the gander as my hill relatives used to philosophize.
us army 1969-1971/california jd thanks to public education/gi bill/student loans
us army 1969-1971/california jd thanks to public education/gi bill/student loans
1
A shark is born swimming.
If anything, this proves that the bankruptcy rules for discharging student loan debt should be more similar to other forms of debt.
If anything, this proves that the bankruptcy rules for discharging student loan debt should be more similar to other forms of debt.
I think that if colleges and universities are going to be allowed to charge such high tuition, they should be responsible for helping every student find a decent, related job, and making sure they graduate. If a student cannot get a decent, degree-related job, maybe he/she wasn't well enough educated. No reason anyone should pay for a product that is defective.
29
So a nanny state.
Schools, alas, do not control trade agreements, corporate down-sizings, or the economy at large. You're pushing on a rope here.
The deeply misguided attitude reflected by this comment infantilizes students by putting all the responsibility on the institution and none of the responsibility on the student to take advantage of the opportunities provided by a college education. It shows the entitled, lazy, and transactional attitude of modern students (and parents) toward a college education and misunderstands the purpose of higher education and its institutions. College students are young adults, encountering the freedoms AND the responsibilities of adulthood for the first time. They are old enough to drive, vote and fight for their country, and to make their own mistakes. Paying tuition does not by itself entitle a student to a degree, much less a job. In spite of the herculean efforts of faculty to improve the effectiveness of their teaching (despite limited incentives to do so at research universities, where research productivity is more important than teaching effectiveness), no professor can literally force students to come to class, or actually do their coursework or participate in any meaningful learning while they are in college, outside of the incentive of grades. Except to the extent that states regulate the tuition charged by public universities, tuition rates are, to a large extent, set by the marketplace; universities can only charge what the market (i.e., the supply and demand) for higher education will bear.
1
Colleges and other granters of career-specific degrees of any kind should be required to screen applicants rigorously before accepting students on significant financial aid: if they accept a student who is clearly not capable of attaining a career for which they have applied, and a judge can determine that that was the case, the institution should share responsibility for unpayable loans. A simpler fix: for-profit institutions of higher learning should, like for-profit prisons, be abolished. Their incentives are simply mind-boggling wrong-headed. What are we thinking?
17
Are the public schools any better? No.
Excellent idea - for profit education, prisons and highway ship (Indiana tollways) are terrible ideas. The shared institutions and public services are what bring us together as a country.
US taxpayers should not be in the student loan business. Banks can lend money to students and take the risks. Or better yet let the colleges lend the money!
32
Great idea, but I wondered if that would be even remotely possible until I saw this chart:
END OF FISCAL YEAR 2013, ENDOWMENT:
Harvard University (MA) $32,689,489,000
Yale University (CT) $20,708,793,000
Princeton University (NJ) $18,786,132,000
Stanford University (CA) $18,688,868,000
Massachusetts Institute of Technology $10,857,976,000
University of Michigan—Ann Arbor $8,272,366,000
Columbia University (NY) $8,197,880,000
Texas A&M University—College Station $8,072,054,790
University of Pennsylvania $7,741,396,000
University of Notre Dame (IN) $6,959,051,000
http://www.usnews.com/education/best-colleges/the-short-list-college/art...
END OF FISCAL YEAR 2013, ENDOWMENT:
Harvard University (MA) $32,689,489,000
Yale University (CT) $20,708,793,000
Princeton University (NJ) $18,786,132,000
Stanford University (CA) $18,688,868,000
Massachusetts Institute of Technology $10,857,976,000
University of Michigan—Ann Arbor $8,272,366,000
Columbia University (NY) $8,197,880,000
Texas A&M University—College Station $8,072,054,790
University of Pennsylvania $7,741,396,000
University of Notre Dame (IN) $6,959,051,000
http://www.usnews.com/education/best-colleges/the-short-list-college/art...
An educated citizenry creates a better country. You are against that idea?
1
I paid off my student loans can I get some free stuff too.?
We have gotten used to people and businesses unable to pay debts and then expecting the government to come in and fix it. This is a dangerous attitude. Anyone getting a loan should have carefully considered how they are going to pay it back. It should not be the taxpayers responsibility to fix this. The law as it is now allows forgiveness in the hardship situations which should cover the circumstances where it is justified. To open the door wider seems like a mistake. Fixing the problem should not be the taxpayers job. Let these colleges finance, and banks. Then if someone wants to default the college or bank can decide how they want to handle it.
10
education should be free for all in my view. California flourished under that situation until the lunk head draft dodging McCarthy loving union traitor Alzheimer headed Reagan was elected governor. Of course, educated citizens are less likely to accept "do as I say" of those in charge. Maybe you are a member of that class.
1
Did you not read the part about how Congree protected private, nongovernmental loans from discharge?
I take it you did not read the article? Hardship has been defined so harshly by the courts that for decades now the only way to show it has been, in 99.99% of cases, to be on your death bed. Literally. The point of this article has been to publicize the small number of cases where judges have not followed the prevailing punitive definition of "hardship", which has not even been rational in a world where loans are not automatically dischargeable in bankruptcy after a 5 or 7 year waiting period. I personally am grateful that I was able to get a good enough job and cheap enough apartment to be able to pay off the $130,000 that I owed in student loans relatively quickly. But I really feel for the people who, despite decades of sacrifice and good faith efforts to pay, have been left with debts that are getting higher, not lower.
2
Whether or not student loans are forgiven overlooks and excuses the runaway costs of college education. A large part of the problem is that colleges are unable to budget their resources, they have become like the medical field and feel whatever the costs they are entitled to it. When student loans were much smaller if in existence at all the cost of a college education was much less, even adjusted for inflation, the salaries and monetary expectations of people connected with colleges were more in line also, I seldom see the two issues addressed in the same article.
29
It's a much more difficult issue than you think. College professors used to make as much as doctors and lawyers. Now we make about a quarter as much, if that. Standards of living for faculty have plummeted. Why? Because despite the false promises of MOOCs teaching productivity can't possibly improve as fast as productivity overall. It still takes the same amount of time to teach the same number of students as well as we ever did. More time, maybe, because we have to teach them more now than fifty years ago. So we work much harder than out elders did, for a much lower real salary, and a much worse standard of living. Tuition increases above inflation (which I have to pay for my kids, by the way) make a slight but only slight dent in this.
This picture of the "runaway" cost of college education is not completely accurate; in fact, a large fraction of the increase in *public* college tuition over the last several decades is directly attributable to declines in state appropriations for higher education. The actual costs of operating universities have certainly increased far more slowly than tuition rates. Faculty salaries in many fields are stagnant or in outright decline, and in the higher-paying fields (hard sciences, engineering, law, medicine, economics, etc), most university faculty earn significantly less than they could in the private sector, but they have foregone some compensation for increased job security and academic freedom. University faculty are, for the most part, people with Ph.Ds from elite institutions, and when it comes to the quality of higher education faculty, it is true that you get what you pay for. On the other hand, most institutions of higher ed certainly suffer from increased administrative bloat and bureaucracy, but public institutions are still typically much more efficient than their private counterparts (who charge much higher tuitions) in this regard. Nonetheless, even at public colleges, except to the extent that they are regulated by state governments, tuition rates are still largely set by the marketplace. Universities cannot charge more than the market for higher education will bear, or they will price themselves out of business...
1
Wow, I certainly hit a nerve with jeoffrey and Andrew, and to both I say baloney. I know creative writing professors who have published nothing that is ever read outside of academic circles who are paid well over a hundred thousand dollars. And decades ago well known, published were paid peanuts, a quarter or semester at a time on a temporary basis and were well served. I can give you many anecdotal examples of overpaid professors and certainly of overpaid and unnecessarily over-educated administrative staff. My point is, if the leadership of the colleges is so good why are they not expected to adjust their budgets, in conjunction with crying about not getting enough money from the state or raising tuition. The privilege of being able to pursue your academic calling is just that a privilege, but you both seem to want your cake and eat it too, I want to do pure research and be paid (with a very lucrative pension) as though I am showing up every day for work at the high tech factory, something must give, tuition is through the roof.
Federally guaranteed loans not repaid become the burden of the U.S. taxpayers. Judges should be given latitude to decide these hardship cases. For profit colleges are often misrepresenting their value and should have to refund a portion of the loans where students drop out or cannot find jobs in their field within two years. Non profit colleges should colleges should be held to the same standard. Students will be better prepared to have the skills necessary to be gainfully employed. Colleges will thus be held partially responsible for the value added or not added to these students. They need skin in the game.
10
One really has to question the value of the education at that point in life. Quite often college is not a good idea for many individuals.
16
And who is to decide when college is a good idea?
Perhaps the same folks who will decide whether or not continuing life is a good idea for many individuals?
Perhaps the same folks who will decide whether or not continuing life is a good idea for many individuals?
9
Taxpayers should decide who they want to get free stuff
Judge Kaplan is one of the most pleasant Judges I've ever appeared in front of. He's absolutely right as well. I'm not sure why the same modification programs available for homeowners cannot be replicated for student loans. The housing market will continue to decline with the milennial generation waiting longer to invest in real property considering that its just not feasible with the burden of student loans and poor job outlook. Hopefully things are on the upswing.
38
Moreover, Sunzari, the interest rates on student loans are far higher than they are on current mortgage loans. Student loans are a huge profit center for the banks, who lobbied hard for these changes in the bankruptcy law. Another example of how we Boomers (and the people we elect to "public service" [haha!]) are sticking it to our descendants.
49
Risk determines interest rates. There is some collateral with property not so with students loans. They're unsecured like most consumer debt.
The other problem is the colleges have no 'skin in the game' and hence rake in the dough whether or not the student even graduates. There are many majors that are just a waste of time and if someone besides us had to give a student a loan would think twice or three times. My husband and I took forever to pay back our loans and we saved to send our kids to a good state school. I'm starting to feel like we were chumps.
This article shows why the taxpayer should not be involve in financial post-secondary education. Let private banks and lenders loan that money. They should not loan that money unless they can logically expect to be repaid. If they make bad loans, let the lenders suffer the consequences of their actions. This would also eliminate the problem of those semi-fraudulent for-profit "colleges" which offer nearly worthless programs.
32
Do you apply your thinking to business also? You favor no bankruptcy laws then?
I don't see where you get our of my response that I don't believe in bankruptcy laws; quite to the contrary, I do. However, as a staunch believer free markets and free peoples, I don't think that student loans are a government responsibility. Were student loans strictly a private matter, prudent financial institutions would require co-signers or other means to ensure repayment. We are probably stuck with income based repayment of loans currently in effect, but that should end immediately. Getting the government out of the student loans business would also have the effect of helping to lower tuition. It would be a win-win situation to get the overreaching federal government out of this business.
If too big to fail banks, car companies, airlines and other legal creatures of capitalism can so easily be forgiven billions in debt, surely someone who has made the effort to find work and pay their student loan debts deserve a fairer standard by which their hardship cases can be addressed.
It was mentioned that students loan debts are larger than ever. Another factor is age. With the trend toward temporary work and the very limited prospects of finding a permanent, secure job after graduation that both covers one's living expenses and student debts, the world has changed in other ways than mere legal interpretation can justly address. Many students, faced with job loss, some of it repeated over and over, look to education to break them from an ongoing cycle of poverty and debt. Sometimes this succeeds, but often it doesn't.
The net result is that students are both deeper in debt and considerably older. It's one thing to be looking at paying off $50,000 if one is 30 and has the luck to find a decently paid, stable job. It's another thing entirely at 50, where people should be planning for retirement, yet may be facing a lifetime of payments and the possibility they may never earn enough to pay off.
Most ridiculous of all is that the government earns considerable interest, as do private borrowers covered under these rules. The courts seem more intent on preserving that profitablility than in just recompense by rules that apply across the rest of the social order.
It was mentioned that students loan debts are larger than ever. Another factor is age. With the trend toward temporary work and the very limited prospects of finding a permanent, secure job after graduation that both covers one's living expenses and student debts, the world has changed in other ways than mere legal interpretation can justly address. Many students, faced with job loss, some of it repeated over and over, look to education to break them from an ongoing cycle of poverty and debt. Sometimes this succeeds, but often it doesn't.
The net result is that students are both deeper in debt and considerably older. It's one thing to be looking at paying off $50,000 if one is 30 and has the luck to find a decently paid, stable job. It's another thing entirely at 50, where people should be planning for retirement, yet may be facing a lifetime of payments and the possibility they may never earn enough to pay off.
Most ridiculous of all is that the government earns considerable interest, as do private borrowers covered under these rules. The courts seem more intent on preserving that profitablility than in just recompense by rules that apply across the rest of the social order.
77
I agree with everything you said except the profitability part at the end. This might be true if all loans were actually being fully repaid, but right now at least 50 percent of them are not. A large portion are in default and another portion are on some sort of reduced payment plan that would not even pay off principal even if there were no interest at all. Those not being repaid has more to do with their starting balance rather than the interest rate.
The bankruptcy code last underwent major amendments in 2005. And during that process, armies of lobbyist for creditors descended upon Washington to preserve their favored position in the bankruptcy process. Did the average student have a lobbyist in those meetings, protecting their interests? No.
Nearly a decade later the problem has worsened. The purpose of the bankruptcy process is to permit a debtor to restart - on a manageable path. Not all debts are necessary discharged. Instead the debts are restructured in manner that allows the debtor to meet the obligations they have incurred. The tragedy of the "undue burden" test is that it prevents bankruptcy judges from granting debtors this very relief. This is particularly unfair and burdensome when one considers that the interest rates on student loans are, frankly, usurious.
Some commenters have argued that debtors must be held accountable for their debts. The bankruptcy process is designed to insure this principle. Debts are prioritized by the judge based on several preferences and whether the debt is secured or unsecured. Student loans are unsecured debts meaning they are not backed by a physical good or other capital - like credit card debt. Usually unsecured debts are given the lowest priority in the bankruptcy process. But unlike other unsecured debt, student loans do not receive such a low priority. In fact, they are placed above other secured debts. Seems like all unsecured debts should be treated equally.
Nearly a decade later the problem has worsened. The purpose of the bankruptcy process is to permit a debtor to restart - on a manageable path. Not all debts are necessary discharged. Instead the debts are restructured in manner that allows the debtor to meet the obligations they have incurred. The tragedy of the "undue burden" test is that it prevents bankruptcy judges from granting debtors this very relief. This is particularly unfair and burdensome when one considers that the interest rates on student loans are, frankly, usurious.
Some commenters have argued that debtors must be held accountable for their debts. The bankruptcy process is designed to insure this principle. Debts are prioritized by the judge based on several preferences and whether the debt is secured or unsecured. Student loans are unsecured debts meaning they are not backed by a physical good or other capital - like credit card debt. Usually unsecured debts are given the lowest priority in the bankruptcy process. But unlike other unsecured debt, student loans do not receive such a low priority. In fact, they are placed above other secured debts. Seems like all unsecured debts should be treated equally.
52
American consumer capitalism demands that money be more important than people, and that the worst sins in society pertain to losing money. Taking on debt to finance higher education and then not paying it back thus becomes a moral failing of the first order. This ethic is writ large across the Greek bailout, just as it was the overriding principle in not bailing out individual homeowners in the 2008 recession even while broadly protecting the holders of the predatory loans that caused the crisis. We are a sick society with destructive values that demean our humanity at every turn.
48
No one is forced to buy a house they can't afford, or a new eXpensive car or even an education. Did we hold a gun to their heads?
Greed and money and Republicans, bad ju-ju, for students!
11
Except that colleges that are gaming the system are mostly run by Democrats.
The bankruptcy laws are already too lenient, which is not fair to those of us who actually pay off our debts before purchasing cigarettes, booze, drugs, vacations, and fancy clothes.
A fairer solution (but not one I endorse) would be for the courts to give every citizen $50,000.
Still, I suspect a lot of these debtors would not pay off their loans even in that case. Instead, they would spend the money before it burned a hole in their pockets.
A fairer solution (but not one I endorse) would be for the courts to give every citizen $50,000.
Still, I suspect a lot of these debtors would not pay off their loans even in that case. Instead, they would spend the money before it burned a hole in their pockets.
10
"Those of us?"
Are you, Cassandra, one of "us" or, are you one of "those?"
Are you, Cassandra, one of "us" or, are you one of "those?"
If we lived in a rational country, college and technical educations would be subsidized by the government, and nobody would need to take out a student loan, ever. College educations aren't like a Ferrari or trips to Europe (although they cost more than either.) They aren't a gift or an entitlement but a solid investment in our country's future. Having an educated populace benefits the country in so many ways, from increasing income and tax collection, to jumpstarting science and innovation, to decreasing our medical costs (people with educations are healthier) to improving our social fabric (educated people marry, have stable families, and commit far fewer crimes.) Giving every one who wants one a free education would pay off many times over for the US. Instead, because of the hysterical lies of the right wing nut jobs, our population is scandalously under-educated, and those who have managed to get a degree, are hobbled for life by Dickensian levels of debt. Discharge all the student loans now, and make education free. We'd save billions.
84
There is no system that someone undeserving will not try to game so the real question here is whether student debt relief should remain so difficult that many deserving of relief are denied.
The reason so few try is because debtors deserving of relief are told that seeking relief is not only difficult to receive but expensive to seek because each hurdle requires a great deal of proof with attendant costs not least of which is sometimes expert witnesses.
Perhaps placing greater discretion in our judges to accord relief is what is needed. Let them truly act as gatekeepers and trust that they will be able to recognize who is gaming the system versus who deserves relief.
The real problem is the obsessive focus upon those in severe financial difficulty as all quasi criminals. Too many impute an intent to never repay educational loans to too many when for most those very loans were marketed to them as their only avenue to enter the middle class. Anyone who has spent even a little time with consumer bankruptcy cases knows that many are left owing educational debt that will never be repaid and those so burdened are stuck living a subsistence lifestyle.
As the article recounts, the difficulty in dealing with student debt has been increased under both Rs and Ds even though the evidence continues to mount of the human toll; ruined lives. While it is true none are forced to borrow 18 year olds aren't equal to bankers in measuring risk so who really is to blame for bad loans?
The reason so few try is because debtors deserving of relief are told that seeking relief is not only difficult to receive but expensive to seek because each hurdle requires a great deal of proof with attendant costs not least of which is sometimes expert witnesses.
Perhaps placing greater discretion in our judges to accord relief is what is needed. Let them truly act as gatekeepers and trust that they will be able to recognize who is gaming the system versus who deserves relief.
The real problem is the obsessive focus upon those in severe financial difficulty as all quasi criminals. Too many impute an intent to never repay educational loans to too many when for most those very loans were marketed to them as their only avenue to enter the middle class. Anyone who has spent even a little time with consumer bankruptcy cases knows that many are left owing educational debt that will never be repaid and those so burdened are stuck living a subsistence lifestyle.
As the article recounts, the difficulty in dealing with student debt has been increased under both Rs and Ds even though the evidence continues to mount of the human toll; ruined lives. While it is true none are forced to borrow 18 year olds aren't equal to bankers in measuring risk so who really is to blame for bad loans?
14
I'm OK with a waiting period; the Brunner case that had the Banko in one year appears to be a scam to get out of it. But having it drag on and on even under a valid bankruptcy caused by other circumstances is patently wrong.
I say the primary reason it's not discharged is because the Govt and Higher Education are in an incestuous relationship where the Feds fund them by throwing lots of money at students, and the universities don't have any incentive to control costs.
If you discharge the majority of the unpayable student debt, then the whole pyramid scheme collapses and then maybe you'll see the colleges become more student-friendly. I pay tuition to have a Prof teach me, not for him to sit in an ivory tower doing BS research.
I say the primary reason it's not discharged is because the Govt and Higher Education are in an incestuous relationship where the Feds fund them by throwing lots of money at students, and the universities don't have any incentive to control costs.
If you discharge the majority of the unpayable student debt, then the whole pyramid scheme collapses and then maybe you'll see the colleges become more student-friendly. I pay tuition to have a Prof teach me, not for him to sit in an ivory tower doing BS research.
9
Here is the glitch in Mr. MOntana's viewpoint: There are three parties in the student loan debacle - the student, the college, and the lender. Colleges & universities may do some low-key career guidance to new students but rarely do they have anything on the line, such as refunds, if the student does not get a job in their field. The lender, especially private loansharks, require no collateral or loan history or document of likely livelihood once the student has graduated and merrily loan thousands at exorbitant interest rates so THAT THEIR SHAREHOLDERS WILL PROFIT. So of the three parties, guess who is holding the expanding payback bag? You guessed it - the student who may have an exceedingly difficult time supporting themselves in the present economy, much less the parasites previously mentioned. Not quite so simple as Mr. Montana implies.
14
Of course, there are huxsters waiting to sell you all sorts of things you neither need nor can afford: loans you can't afford, worthless degrees you can't use, semesters abroad you can't afford, etc. etc. And it's not just for-profits either - there are lots of liberal arts colleges that will happily sell you a very pricy and completely useless philosophy degree. But college is not the only place this happens - they'll just as happily sell you a car or house you can't afford. But presumably, you, as a rational, thinking adult, can puzzle through what the cost of a loan will be be, and what the value of a college degree will be. Absent real injury or illness why ought people to be relieved of the obligation to repay, when its taxpayer money on the line and they did not do their own due diligence?
10
Yours is the correct neoliberal attitude, summed up elegantly by Wendy Brown. I prefer a wider, more generous definition of morality, not to mention rationality: “neoliberalism normatively constructs and interpellates individuals as entrepreneurial actors in every sphere of life. It figures individuals as rational calculating creatures whose moral autonomy is measured by their capacity for ‘self-care’ —the ability to provide for their own needs and service their own ambitions.”
People need to be able to have unpayable debts discharged.
But colleges and universities, both for-profit and traditional, are gaming the system, even setting tuitions so high that income-based repayment will invariably limit the amount repaid to less than the amount due, with the taxpayer eating a large loss at the end.
The solution is to make colleges and universities liable for any unrecovered student loan defaults above the national average default rate for qualified students attending reputable institutions.
But colleges and universities, both for-profit and traditional, are gaming the system, even setting tuitions so high that income-based repayment will invariably limit the amount repaid to less than the amount due, with the taxpayer eating a large loss at the end.
The solution is to make colleges and universities liable for any unrecovered student loan defaults above the national average default rate for qualified students attending reputable institutions.
14
Could it be that colleges, both public and private, are training more people than the economy requires? Is this why we probably have one of the most over-educated and under-utilized workforces in this nation's history?
Too many colleges. Too many colleges promoting fantasies. Too many people squandering their savings and too many taxpayers on the hook.
Starbuck's baristas don't need a college degree and, like soda jerks before them, they can probably do without a high school diploma. The reality is that not everybody needs to go to college or should go to college.
Too many colleges. Too many colleges promoting fantasies. Too many people squandering their savings and too many taxpayers on the hook.
Starbuck's baristas don't need a college degree and, like soda jerks before them, they can probably do without a high school diploma. The reality is that not everybody needs to go to college or should go to college.
9
The purpose of a high school diploma is not simply to find work. Or perhaps you prefer that voters remain uneducated and uninformed, so that they are more easily misled into voting against their own interests.
The fundamental policy problem is that we should not be financing higher education (and housing) through credit markets. Higher education, like primary and secondary education, should be available to all without charge. We would then not have to deal with the repayment problem. Unfortunately, American society is too short-sighted and too conservative to raise the taxes needed to support free higher education. The problem exists not only at the federal level but also at the state level, where state universities have raised tuition through the roof.
22
Nice fantasy. I attended college (one year) in France and worked in Japan for 20, both countries having the subsidized high schools and universities that Thal is (perhaps) thinking of. In fact, my wife graduated from an elite public high school and university in Osaka with the taxpayers picking up most of the tab.
There is a catch. She tested brilliant during primary and middle school and passed the rigorous entrance exams on the first try. Less gifted students in these countries are diverted to occupational training tracks early on. If their parents have money, there are plenty of cushy private schools willing to take it, but the taxpayers are not on the hook. The system Thal refers to may indeed exist in other countries.
Free university level education is available for the price of a library card (or more recently, an Internet connection). What most Americans hope to do at college is purchase prestige. I did it for my own daughter and it has made little difference in her financial prospects. However, she is a smart, cosmopolitan mom so my granddaughter is benefiting from my earlier largess.
There is a catch. She tested brilliant during primary and middle school and passed the rigorous entrance exams on the first try. Less gifted students in these countries are diverted to occupational training tracks early on. If their parents have money, there are plenty of cushy private schools willing to take it, but the taxpayers are not on the hook. The system Thal refers to may indeed exist in other countries.
Free university level education is available for the price of a library card (or more recently, an Internet connection). What most Americans hope to do at college is purchase prestige. I did it for my own daughter and it has made little difference in her financial prospects. However, she is a smart, cosmopolitan mom so my granddaughter is benefiting from my earlier largess.
One of the biggest problems in this mix is that for-profit schools, which are notorious for high-pressure sales tactics and poor-quality programs that don't lead to jobs, are allowed to be part of the subsidized student loan system. And private lenders, at the other end of the process, were included in the non-dischargeable category in 2005. Student loans also carry a usurious interest rate in this era when savings accounts pay virtually zero interest. There is so much wrong with this system, rigged to benefit private enterprise at the expense of the government and individual student borrowers, that it's hard to know where to start. Here are some ideas, though: 1) exclude for-profit schools from the subsidized student loan system; 2) force/allow student loan interest rates to sink to market norms but keep a cap on them (which was the original intention); 3) remove the bankruptcy provisions that prevent private loans from being discharged in bankruptcy. AND free up the federal bankruptcy judges to use their discretion and judgment by ditching the now-irrelevant Brunner test, which was meant to protect the taxpayers' interests in seeing tax-supported, federall guaranteed student loans repaid. It is beyond belief how for-profit enterprises have shoehorned themselves into those safe harbors that were meant to protect the public interest.
168
What are we thinking as a society when we create laws that burden our youngest citizens? Our future is in the hands of the 20 and 30 year olds who are carrying some big time debt. As a senior, I am satisfied with social security and with medicare. The program should be adjusted (to raise the cap, etc.) are funded and provide relief to individuals when they retire. The fact that we have yet to figure out how to help our youth grow, mature and become tax paying citizens with a stake in our future, I am thinking will only come back to haunt us as a nation. Figuring out how to invest in our future should not be this hard. Holding them to a different bankruptcy standard is crazy.
Maybe those high interest rates are to cover the cost of all the bad debt. All the loans that end up being written off or rates reduced. This has more to do with people going away to school where it's expensive for tuition and room and board instead of locally where it is more affordable. But hey! In our current world why shouldn't everyone, without regard to future obligations, go away for 4 years, go to football games, join a fraternity, party. Maybe even Cancun on spring break. After all our public leaders have taught them all its OK to spend more than you take in.
The Income based repayment (IBR) and Pay as you Earn (PAYE) payment plans are already similar to Chapter 13 bankruptcy - You pay a small percentage of your income (which can even be $0) and the balance is forgiven at the end of the repayment period. There is in fact no incentive to borrow less once you've exceeded your ability to repay because of these programs.
What is needed is a serious consideration of the nature of the schools which instituted these debts.
We have too many people seeking too many degrees in a climate in which too few degrees have any reasonable chance of producing an income commiserate with their expense.
We don't subsidize the purchase of MacMansions or Maseratis, why are we providing federal funds to those seeking a degree in Assyriology or Astrology.
The best of all that has been said or thought is a noble aspiration but no reasonable excuse to visit my checkbook every April 15.
I have, on my own time and own expense, learned and enjoy the intellectual and aesthetic experience of reading the classics in a half dozen dead languages, but I have no reasonable expectation of federal emoluments anymore than have the patrons of NASCAR, NFL or the local strip club.
Think before you debt.
We have too many people seeking too many degrees in a climate in which too few degrees have any reasonable chance of producing an income commiserate with their expense.
We don't subsidize the purchase of MacMansions or Maseratis, why are we providing federal funds to those seeking a degree in Assyriology or Astrology.
The best of all that has been said or thought is a noble aspiration but no reasonable excuse to visit my checkbook every April 15.
I have, on my own time and own expense, learned and enjoy the intellectual and aesthetic experience of reading the classics in a half dozen dead languages, but I have no reasonable expectation of federal emoluments anymore than have the patrons of NASCAR, NFL or the local strip club.
Think before you debt.
6
According to the article, the average college debt is $31,000. This is only slightly higher than the average new car loan of $27,430.
8
The thing is, if you default on the car loan, they repo the car and your credit is slammed for a while. No one, at age 68, is working two jobs and more than 12-hour days, because some time in the past they bought a car they couldn't pay off or sell.
Good for the judge. Good to see mpathy and compaaion.
5
A judge with a conscience. And not a moment too soon. With student debt ballooning, and jobs increasingly hard to come by (Online psych-out-the-boss personality tests for jobs at McDonald's?!), at the rate things have been going I've been half expecting a three-strikes-you're-out law used as an excuse to put unlucky student loan-holders into labour camps. Just as China does now to high school students who prefer hanging out with their friends after class to spending their 'spare' time in government-sponsored 'voluntary' extracurricular groups.
Time's long past to overturn this country's last bastion of indentured servitude for its own people. It won't be easy, especially since so many politicians (including all but TWO of the presidential candidates for '16 so far, the two respecters of freedom and liberty being Rand Paul and Bernie Sanders) back that other indentured servitude programme, H1-B, which has made all but the best-connected elite American citizens or green card holders virtual pariahs in the IT industry.
America's leaders being supportive of Americans who are trying to support themselves in the current parkour game of an economy. Is that really too much to ask?
Time's long past to overturn this country's last bastion of indentured servitude for its own people. It won't be easy, especially since so many politicians (including all but TWO of the presidential candidates for '16 so far, the two respecters of freedom and liberty being Rand Paul and Bernie Sanders) back that other indentured servitude programme, H1-B, which has made all but the best-connected elite American citizens or green card holders virtual pariahs in the IT industry.
America's leaders being supportive of Americans who are trying to support themselves in the current parkour game of an economy. Is that really too much to ask?
11
Although there are countless justified ways to point fingers and accuse the government, the banks, and all the lenders for the state of the ridiculous student loan program operation, I seldom hear any blame placed or accepted by the people most in charge: the borrowers. Expecting the public to offer condolences and to accept and payoff these loans is no more fair or understandable than the state of the program itself. I do not have the answer, but expecting me and my descendants to pay off student loans entered into voluntarily should not be one of the available answers.......As is pointed out elsewhere here, the Congress and the Presidency were in Republican hands when student loans were removed from bankruptcy. Political blame should not be used in this case. Student blame is the right thing.
10
There were plentiful jobs in certain fields in pre-Recession America that will not soon return, and some will not return at all. If one's educational debt represents entree to these fields, then repayment of the debt has been compromised. Those entities responsible for the collapse of markets and investments should be held accountable, not the person who has striven to be educated.
8
I have mixed reactions to this.
I was low-income and got student loans; without them, I could not have attended college. I was the first person in my entire family to ever graduate with a 4-year college degree. I paid my loans back on time.
On the other hand, many of these current lenders are exploitative and then run to the courts to force people into poverty when the loan's excessive, ridiculous terms cannot be met.
If lenders lose money, though, the availability of the loans will seriously diminish and students in circumstances similar to mine might not get the chance to earn a college degree and change their lives. It's a hard call to make.
Regardless, I don't think loans should ever be completely wiped out. The borrower should be required to pay back something every month, even if it's $15 and even if it's paid monthly to a charity (who won't complain about the cost to process the money). Or the debtor could be required to provide a box of school supplies to a local school once a year.
I was low-income and got student loans; without them, I could not have attended college. I was the first person in my entire family to ever graduate with a 4-year college degree. I paid my loans back on time.
On the other hand, many of these current lenders are exploitative and then run to the courts to force people into poverty when the loan's excessive, ridiculous terms cannot be met.
If lenders lose money, though, the availability of the loans will seriously diminish and students in circumstances similar to mine might not get the chance to earn a college degree and change their lives. It's a hard call to make.
Regardless, I don't think loans should ever be completely wiped out. The borrower should be required to pay back something every month, even if it's $15 and even if it's paid monthly to a charity (who won't complain about the cost to process the money). Or the debtor could be required to provide a box of school supplies to a local school once a year.
13
My alma mater, an Ivy League institution, annually petitions me to give them money. I give them nothing. I do so not out of spite, but out of silent protest to the absurd inflation of college 'costs' owing to the ease with which students receive government-backed loans. Further, these so-called 'non-profit' institutions engorge themselves on government backed loans in the same way that the entire U.S. economy was brought to its knees by the garbage peddled by banks in order to make a profit. I see little if any difference, between colleges and Wall Street in this regard. A pox on both their houses.
Meanwhile, however, we have bred an class of Americans who believe that money borrowed is not money owed but, rather, is 'free'. Moral relativism rules. Have a college loan? Don't pay it. I dated a girl once who blithely told me she declared bankruptcy after racking up tens or thousands of dollars in debt. She figured not paying was easier than working hard to pay what she owed.
We need to go back to the Puritan ethic of the value of hard work and the value of money.
Meanwhile, however, we have bred an class of Americans who believe that money borrowed is not money owed but, rather, is 'free'. Moral relativism rules. Have a college loan? Don't pay it. I dated a girl once who blithely told me she declared bankruptcy after racking up tens or thousands of dollars in debt. She figured not paying was easier than working hard to pay what she owed.
We need to go back to the Puritan ethic of the value of hard work and the value of money.
13
It seems ridiculous that congress has granted special protection to private lenders who provide student loans. At least the interest rate on those loans should then reflect the reduced risk to the lender. They should be dirt cheap if there is next to no risk involved.
199
Many years ago, it was possible to take out student loans from government entities or government-insured lenders and discharge them in bankruptcy. And many young graduates met the traditional standard for bankruptcy. That legitimate public policy problem was followed by a response -- the undue hardship standard -- and harsh interpretations of that standard that created a large-scale, needless tragedy.
3
Having unsuccessfully tried to litigate the discharge of "private" student loans in federal bankruptcy court, I would agree that Marie Brunner has done more damage to student borrowers than any tuition rate hike. A totality of the circumstances standard would allow the Court to truly weigh whether this debtor should receive a hardship discharge.
One additional factor should be that loans be discharged that include co-signers such as parents or spouses, or greater interest rates. Student loans were declared non-dischargeable because they are awarded based on "need" and NOT "creditworthiness." Add creditworthiness and those loans should no longer be classified student loans and dischargeable without an adversary lawsuit in the bankruptcy court. I'm seeing grandparents saddled with student loan debt as a result of being a co-signer which should NEVER happen.
One additional factor should be that loans be discharged that include co-signers such as parents or spouses, or greater interest rates. Student loans were declared non-dischargeable because they are awarded based on "need" and NOT "creditworthiness." Add creditworthiness and those loans should no longer be classified student loans and dischargeable without an adversary lawsuit in the bankruptcy court. I'm seeing grandparents saddled with student loan debt as a result of being a co-signer which should NEVER happen.
9
Pathetic ! Nothing like enabling a person who signed a contract and does not honor their commitment. Great example for the future youth of America and others who do not know what they sign nor do they know how to handle money.
11
The judges are correct. Besides, public higher education should be free. In the end, a better educated populace benefits us all though higher earnings and tax revenues.
10
Nothing is ever free. Someone else always pays for it.
1
The most interesting thing is that businesses and corporations can wipe away their debts with the stroke of a pen and start up again the next day with no ill effects. The bankruptcy act of 2005, or the let's punish the students act, passed the senate by a vote of 74 to 25, all the 25 no votes were by Democrats and all the yes votes were by Republcians and 16 Democrats who voted with Republcians. Clinton abstained.
16
Businesses pay market rates for their debt. If students paid market rates for their debt too, I would have no problem with it being discharged. Of course, market rates for student debt could very well be 12% or higher given the high rate of default. Are you ok with that?
1
The fallacy of your argument is that, when businesses borrow money there is significant vetting by the lender as to the business' ability to repay. If it handles its affairs poorly, bankruptcy court will DISSOLVE the business to repay creditors, not let it off over and over and over.
For students, there are no assets to encumber. It's a good faith loan only. If the student handles his/her affairs poorly would you argue for the court to do the same thing to this person???
For students, there are no assets to encumber. It's a good faith loan only. If the student handles his/her affairs poorly would you argue for the court to do the same thing to this person???
I'm always surprised when I read these articles that the average loan balance is so low. Given the current cost of college, educational, and living expenses. That students are borrowing "only" $5 to $7 a year would indicate that they are also receiving significant student aid, assistance from their families, and working part time. Higher education is a significant investment and can pay off over time but must be made wisely. A 1:1 loan balance to what you can expect as a starting salary is not unreasonable and the ratio can be even higher for some careers where there is an expectation that you will make significantly more a few years down the road. I do believe that the interest rate on student loans should be calculated off of the 10 year treasury rate as mortgages typically are.
2
The entire system of financial assistance to college students must be revisited and restructured. We must devise a system that permits middle class and poor students to receive a college education without putting them into debts they cannot repay. College education should not be only for the children from wealthy families, all qualified students should have the opportunity to receive a college education. It would be very interesting to find out what it cost to educate a college student, is it really $30,000 a year or more? What are all the costs involved, besides the professors salaries, the upkeep of facilities, etc.? What are other countries doing? This problem must be resolved very soon, it is already taking a toll on our graduates.
7
I'd be interested to learn the ratios of student loan defaults by major. I'm guessing not too many engineers default; perhaps the largest are English majors, or perhaps Drama Studies.
7
Fyi. I have 3 children with student loans in repayment at this time,BA,major art,minor English,BFA art, BFA theater,dance. They are all paying off their loans,all are gainfully employed. I know business majors that are not doing as well. You should not make assumptions based on what people decide to major in while at school. That really doesn't make any difference in their ability to pay on their student loans.
5
The interest rate on a loan should be pegged to the default rate of the college and major. It will serve as a powerful signal as to what fields the market rewards and penalize.
Studying engineering at MIT: 2% interest rate for you. Studying gender studies at NYU? 12% for you.
Studying engineering at MIT: 2% interest rate for you. Studying gender studies at NYU? 12% for you.
1
You might want to look that up. Personally, as an English major, I paid off my student loans and have dedicated my career to helping improve student writing skills. Other English majors go on to law school (at one point, the highest number of admissions to law schools were English majors), start their own businesses, work as grant writers, and can basically find work in many fields because many fields demand writing skills. American business surveys year after year list writing skills as one of the top five requirements to succeed. For a major that is so disparaged (as are all the liberal arts), it never fails that the skills of writing, reading, and critical thinking are the ones most in need - and a liberal arts education provides those skills.
5
Businesses obtain relief in Bankruptcy as a matter of course. It clears the deck to start fresh. Certainly human beings who sought student loans in the hope of a better future deserve the same. Holding people to student loan debt until death is a more rigid standard then we apply to marriages which often do not last until death do us part.
10
I totally agree. If "Corporations are people" then People certainly are people, right?
9
Corporations are people.
People are corporations!
People are corporations!
3
These pseudo colleges/universities that pop up only to make money via gov't guaranteed student loans are never held accountable when over 90% of their graduates can not find work. They can not find work because no business views their pseudo degrees as having any value. Because they really do not have any value, as the classes/course/degrees are all bogus.
When then should the students be held to a stricter standard?
It's like a ponzi scheme, with the pseudo colleges receiving money only to use that money not on classes and instructors, but to pay for more and more TV ads and slick brochures and mailings that lure more and more unsuspecting young people into buying into their bill of goods.
Our country no longer protects the vulnerable from these and other unscrupulous and greedy 1%' ers.
When then should the students be held to a stricter standard?
It's like a ponzi scheme, with the pseudo colleges receiving money only to use that money not on classes and instructors, but to pay for more and more TV ads and slick brochures and mailings that lure more and more unsuspecting young people into buying into their bill of goods.
Our country no longer protects the vulnerable from these and other unscrupulous and greedy 1%' ers.
10
All colleges are bad. They don't care what the student spends money on. Useless degree? Who cares, just pay up. If you think only 'for profit' colleges are to blame you're sadly misled. Some of the worst offenders are state colleges. It doesn't matter to them what happens if a student doesn't graduate or graduates with a useless degree. They got their money.
As someone who recently filed for bankruptcy and has more than $100,000 in student loan debt, I can tell you why I did not try to get relief from student loans: I did not know it was an option. My lawyer simply told me that it was not possible to have student loans discharged. This article is the first I have even heard there was any method to do so.
I suspect this is the same for most bankruptcy filers - given our inherently perilous financial situation, we tend to hire one of the cheap attorneys who solicit our business and do the bare minimum or less for us. (I can cite many other examples of this lawyer's ineptitude, likely rising to malpractice, but that's a story for another day)
I suspect this is the same for most bankruptcy filers - given our inherently perilous financial situation, we tend to hire one of the cheap attorneys who solicit our business and do the bare minimum or less for us. (I can cite many other examples of this lawyer's ineptitude, likely rising to malpractice, but that's a story for another day)
127
In my middle age innocence, I decided to go to college to become a teacher. Now, I have upwards of $90,000 in student loan debt -- for undergraduate and graduate studies -- and had to file for bankruptcy a few years ago because I was unable to keep afloat with the measly hourly pay I earned while trying to find full-time employment in the field for which I'd trained.
Now I sit here, at 77 years of age, getting top scores in every civil service exam for every job I think I could live with, and never making it past the interview they have to allow me, waiting for the government to decide to take a chunk from my monthly social security check -- my only income -- and wondering what I'll do then.
It would be nice to think that this debt -- which I incurred in a burst of stupid belief that no age discrimination was going to keep me from earning enough to repay it -- might be discharged before I'm thrown into the streets to die of hunger.
Now I sit here, at 77 years of age, getting top scores in every civil service exam for every job I think I could live with, and never making it past the interview they have to allow me, waiting for the government to decide to take a chunk from my monthly social security check -- my only income -- and wondering what I'll do then.
It would be nice to think that this debt -- which I incurred in a burst of stupid belief that no age discrimination was going to keep me from earning enough to repay it -- might be discharged before I'm thrown into the streets to die of hunger.
21
Alma, Contact the relevant State Bar Association and file a complaint against this lawyer.
5
Meanwhile, Corinthian Colleges, one of the worst abusers of the student loan system among for-profit college chains, filed for bankruptcy this spring and will escape much of its debt. Who owns the biggest piece of Corinthian? In 2013, it was Wells Fargo Bank. The banksters get theirs, coming and going. The rest of us? Not so much.
4
America should be ashamed of itself. We'll fail to innovate and in everything else as long as we pay kids to play basketball and instead of to study and create.
10
The banks insist upon their pound of flesh, and the ounce of blood to go with it.
9
The challenge which is so often not explained is that the banks servicing the loans set up the original repayment plans and ensuing interest in such a way that most (if not all) of what you are paying goes to interest and thus the principle rises steadily. At a very early point in the history of the loan, the principle reaches a point where it is generating such high interest that there is no way an average person, even when employed, can ever pay it off. You are told that you need to pay the principle off as soon as you can, but most people who need a loan to get through college are not necessarily going to start out with a high paying job right out of college and thus, by the time they do start earning more, trying to pay off an ever burgeoning computer generated figure is hopeless. So millions of students end up supporting banks. This is what is happening. It has noting to do with personal responsibility. It is a scam by the banks that has gone on for many years and since it is legal (we sign the loans) it is yet another example of Wall Street looting the public. The false story is given out that people just don't have a sense of personal responsibility and expect taxpayers to pay for them to hide what has really been going on.
40
Elizabeth Warren has pointed out the outrageous unfairness of this for years. In a country whose politicians constantly expound that our children are our future, it is reprensible that they have done nothing while those children's futures have been put in such a straightjacket due to the greed of the banking industry.
9
So when you receive a loan from a bank, them wanting you to pay it back according to the terms you agreed is "greed"? I weep for the future of this country.
1
Like debt for medical issues, student debt is yet another attack against those least able to defend themselves in an increasingly predatory economic climate. I guess that former students are just not "too big to fail."
94
Senator Elizabeth Warren, an expert on bankruptcy, has repeatedly raised the issues around student loan debt and proposed solutions that Republicans have rejected. However, there are also some steps that could and should be taken by executive action. http://www.nytimes.com/politics/first-draft/2015/06/10/elizabeth-warren-....
10
Most people in this country that Elizabeth Warren talks a lot but says little that stands up to scrutiny. How I wish she would run for President and win the Democratic nomination. It would ensure a Republican victory.
It seems to me that schools should be forced to take some responsibility for this, else the cost of education will continue to skyrocket, and student loan interest rates will go up. Both factors would make higher education less affordable and thus less accessible.
Nearly every day one sees advertisements for private for-profit schools touting "degrees" qualifying the person to "work in a/an (insert professional adjective here) office". If such training is actually needed, then it can easily be obtained at a local community college for far less money.
Nearly every day one sees advertisements for private for-profit schools touting "degrees" qualifying the person to "work in a/an (insert professional adjective here) office". If such training is actually needed, then it can easily be obtained at a local community college for far less money.
45
Run up almost any sort of debt and you can get relief: owe a student loan and you're marked for life. They just sit, wait, and take.
77
So the answer is to continue running up debt, knowing you will not have to pay it back?
Great idea! Free money for everyone!
Great idea! Free money for everyone!
1
Pay your bills like a man. Of course, there are fewer and fewer of them
1
The reason is simple. Most loans require collateral to reduce risk and allow low interest rates. Students have no collateral, and to allow them below market interest rates, payment needs to be strongly enforced.
One of Mrs. Clinton's many gifts to the banking industry?
4
How did you reach Mrs. Clinton? In 2005 when student loans were removed from bankruptcy the Congress and Presidency were Republican. Mrs. Clinton has never been a Republican.
84
I guess history isn't your strong suit. Mrs. Clinton ran for Senate in 2000 for the first time. The bill was passed in 1978. If you can't do the math, it's a good thing you never took out a student loan.
16
Mrs. Clinton was most certainly a Republican at one time though perhaps not during any meaningful period of her life. She describes herself as a Goldwater girl during his candidacy for presidency and was a member of Young Republicans. The fact that she wasn't old enough to vote is the qualifier of whether this was meaningful.
5
It may well be a wonderful thing for students who have taken out too many students loans to discharge them in bankruptcy, at least for them. But remember, that money came from somewhere.
To be precise, it came from other citizens. And although the taking of the loans was entirely voluntary -- nobody makes you take a student loan -- the process by which the money was collected from others - taxation - is entirely coercive. You don't get to opt out of paying taxes, regardless of how much you may disagree with how that money is used. It seems to me that this un-level playing field must be considered here.
If someone takes money from me involuntarily, and the explicit legal promise from them is that it will be repaid, isn't there some moral obligation to ensure that this is actually done? And isn't there also some moral obligation to require that people are held accountable for their own decisionmaking in taking on large debts, apparently without thinking about how they'll repay them? And ought not people to consider the consequences of taking out this debt and what it's going to cost them down the road when they go into repayment?
Making it too easy to discharge student loans is a slippery slope; and the slippage comes at the expense, not of the government, but of the taxpayers whose involuntary contributions in the form of taxes fund the government, and whose money is, in fact, the debt being discharged. These discussions always seem to omit this fact.
To be precise, it came from other citizens. And although the taking of the loans was entirely voluntary -- nobody makes you take a student loan -- the process by which the money was collected from others - taxation - is entirely coercive. You don't get to opt out of paying taxes, regardless of how much you may disagree with how that money is used. It seems to me that this un-level playing field must be considered here.
If someone takes money from me involuntarily, and the explicit legal promise from them is that it will be repaid, isn't there some moral obligation to ensure that this is actually done? And isn't there also some moral obligation to require that people are held accountable for their own decisionmaking in taking on large debts, apparently without thinking about how they'll repay them? And ought not people to consider the consequences of taking out this debt and what it's going to cost them down the road when they go into repayment?
Making it too easy to discharge student loans is a slippery slope; and the slippage comes at the expense, not of the government, but of the taxpayers whose involuntary contributions in the form of taxes fund the government, and whose money is, in fact, the debt being discharged. These discussions always seem to omit this fact.
32
John Montana
Your comment omits facts and invents facts.
Some loans are government. Some are NOT.
And here is a fact, lenders make money off those loans, and lenders had congress right them sweetheart exemptions from the law of the land that applies to other loans, and the private education industry recently got in on the sweetheart deal. In theory it was to promote education. In practice it has become a scam.
But heh, go on talking about government this and taxpayer that because it is what you like to talk about. Understandable. Some kids want to hear the same fairy tale four, five hundred times.
Your comment omits facts and invents facts.
Some loans are government. Some are NOT.
And here is a fact, lenders make money off those loans, and lenders had congress right them sweetheart exemptions from the law of the land that applies to other loans, and the private education industry recently got in on the sweetheart deal. In theory it was to promote education. In practice it has become a scam.
But heh, go on talking about government this and taxpayer that because it is what you like to talk about. Understandable. Some kids want to hear the same fairy tale four, five hundred times.
140
So Montana also has narrow-minded, self-centered people. Or do I mean Colorado?
16
If there is a moral obligation that people are held accountable for their own decisionmaking, there would also be a moral obligation that accurate information is available for that decision. Right now there isnt. Students signing up for loans have no easy access to the information that would lead them to a good decision, such as placement and completion rates for the various schools and subject matters, or at least a warning that many schools manipulate information.
Generally there is such an obligation to repay, but when the repayment is impossible or unduly burdensome it is no longer obligatory. This is what bankruptcy is about. Also, when the obligation involves duress or bad information, it loses force accordingly. If the taxpayers let their governments operate or profit from a racket, they rather than the racket's targets should take the hit.
I suppose if my relations with a bank or phone company are voluntary, it is OK for them to overcharge me or cheat me or sneak extra fees into an accounting made complex so extra fees would pass unnoticed. Whether it's a government or a private concern, our money should not be wasted and if we have to watch them like hawks to prevent this, we should be able to inflict some pain on them in return.
Generally there is such an obligation to repay, but when the repayment is impossible or unduly burdensome it is no longer obligatory. This is what bankruptcy is about. Also, when the obligation involves duress or bad information, it loses force accordingly. If the taxpayers let their governments operate or profit from a racket, they rather than the racket's targets should take the hit.
I suppose if my relations with a bank or phone company are voluntary, it is OK for them to overcharge me or cheat me or sneak extra fees into an accounting made complex so extra fees would pass unnoticed. Whether it's a government or a private concern, our money should not be wasted and if we have to watch them like hawks to prevent this, we should be able to inflict some pain on them in return.
100