Student Debt Protests (2 Viewers)

[IvanKaramazov]

My two issues:

1) Student debt cannot be discharged in bankruptcy.

I agree that this is ridiculous. Fix that, and the student loan problem -- to the degree that it's a problem at all -- goes away almost instantly.

Sarcasm here, right?

No.

Student loan debt is an exaggerated problem. A large majority of students graduate either debt-free or with trivial amounts of debt that they should have no problem paying off, given the ROI of a college degree. Even some of those who graduate with six figures of debt will be fine -- that freshly-minted cardiologist isn't going to be driven to the poorhouse because of his student loans.

The real problem cases are the folks who got fleeced by for-profits or who took out loans in good faith but find themselves unable to repay them despite their best intentions (like Gawain). Those are exactly the kinds of reasons why we have bankruptcy protection in the first place. If people can get mortgages, car loans, credit card loans, etc. discharged, I don't see why we shouldn't allow student loans to be discharged either. Yes, there's no collateral underlying them, but a) that's an argument for why their interest rates should be higher, not for why they should be non-dischargeable and b) there's no collateral behind credit card loans either and nobody thinks they should be exempted from bankruptcy filings.

 

[Judge Smails]

why are so many foreigners coming here to go to college if it is free in theirs?

They still get paid. My daughter is dating a foreign exchange student from Sweden. I know they pay crazy taxes, but that country has it down. He went back to work (high wages) during the summer but basically gets everything paid for. Education, healthcare, etc.

 

[RedmondLonghorn]

My two issues:

1) Student debt cannot be discharged in bankruptcy. We offer an out to anyone else who finds themselves in untenable financial situations. We've granted student loan debt immunity for some odd reason due to lobbying from lenders.

2) Federal student loan interest rates are much higher than loans from other sources. I owe Citibank 30K at 4% and the Feds 67K at 6.8%. Federal consolidation would increase this rate. Because of my debt load I cannot private consolidate. The juice I pay the Feds is much higher than what I'm paying to a private lender. Why is the government in the business of making money off of loans to students? If the concept behind government funded education is that a better educated workforce is a private good, why are the government interest rates so high?

Here is my understanding of these two issues:

1) Most other kinds of debt are backed by collateral and/or are provided on the basis of credit-worthiness. Federally sponsored student debt is neither. And allowing personal bankruptcy to discharge student debt would set up some very perverse incentives.

2) Citibank can say "no". Citibank is a private lender that gets to make a lending decision based on its own criteria. Federally sponsored debt is pretty much available to anybody who wants it. It is then packaged up and sold off to investors. It is pretty crappy debt, in terms of the default rate, so of course it is going to have a high interest rate to account for all of the defaults.

1) Up to 1976 all student loan debt was dischargable. 1976 saw the first restriction, where federal debt had to be more than 5 years old. In 1990, the Feds went from 5 to 7 and in 1998, no discharge was possible without an extreme hardship showing. Private student loan debt was granted same protection in 2005. The exclusion of student loan debt only is relatively recent and quite recent for private lenders.

2) The fact that student loan debt follows you hurts your default argument. Even with high default rates, there's no way to escape student loan debt, especially federal. Wages are garnished, tax returns are seized and once someone is in default a lot of the forgiveness options are off the table. You can't claim we need high interest rates to protect from deadbeat debtors, but also have the debt protected where there is no way to escape it. This isn't credit card debt which gets sold for pennies on the dollar. Because collection efforts never have to stop (no statute of limitations) there's no bad debt, with the exception of completely judgment-proof individuals.

Thanks for the details on point #1. That is a curious history.

On point 2, just because a debt can't be erased doesn't mean it is "performing". If almost 30% of student debt (that is in its repayment period) isn't being paid back on schedule, which is the rate right now, that is a problem for lenders, even if they don't fear bankruptcy wiping out their principal. If they faced the risk of losing principal too, then the rates on student debt would be that much higher.

 

[Judge Smails]

The thing that makes me laugh the most about this is that people talk about the financing as the problem yet ignore the fact that the cost of college has risen leaps and bounds above inflation. Why? Largely because there is cheap and overly accessible financing available to all.

Instead of protesting the financing- maybe these people should protest the ridiculous cost of college these days.

Where does the money go?

Now we are getting to the root of the problem. The problem is like other government related entities - hugely underfunded pensions. It's a crisis. They get high cost tenured professors and the pensions are out of control. The way out is higher tuition fees.

Pension reform is a must. They keep making "tough decisions" for those of us in the private sector, raising social security age etc. Time for them to get very real with their own pensions. The rest of us in the private sector should march against that.

 

[Cold Dead Hands]

Not every protest is BS. Not everybody who protests is spoiled or undeserving. Lots of knee jerk reaction in here.

I think that for those college students below a certain income level, government ought to help out with the student loans, maybe eliminate them altogether. It shouldn't be for everyone. But it's time to increase the safety net.

They have this already. It is called financial aid at a state school.

 

[RedmondLonghorn]

Yes, there's no collateral underlying them, but a) that's an argument for why their interest rates should be higher, not for why they should be non-dischargeable and b) there's no collateral behind credit card loans either and nobody thinks they should be exempted from bankruptcy filings.

Many credit card companies have lax standards, but they still have standards. They don't provide an unlimited line of credit to borrowers with a credit score in the 500s. The federal student loan program basically does exactly that.

I agree that making student debt dischargable, after a reasonable period, say 7 years, makes sense, but it would lead to higher rates. I see at least as many people complaining about the rates as I do about the bankruptcy issue.

 

[RedmondLonghorn]

Not every protest is BS. Not everybody who protests is spoiled or undeserving. Lots of knee jerk reaction in here.

I think that for those college students below a certain income level, government ought to help out with the student loans, maybe eliminate them altogether. It shouldn't be for everyone. But it's time to increase the safety net.

They have this already. It is called financial aid at a state school.

And Pell Grants.

 

[Judge Smails]

Go f**k yourself should be the standard reply to all protests.

Well, I was looking out my hotel window watching the Hands Up/Ferguson protest in downtown Newark and walking out and giving that reply never came to my mind....

 

[IvanKaramazov]

Yes, there's no collateral underlying them, but a) that's an argument for why their interest rates should be higher, not for why they should be non-dischargeable and b) there's no collateral behind credit card loans either and nobody thinks they should be exempted from bankruptcy filings.

Many credit card companies have lax standards, but they still have standards. They don't provide an unlimited line of credit to borrowers with a credit score in the 500s. The federal student loan program basically does exactly that.

I agree that making student debt dischargable, after a reasonable period, say 7 years, makes sense, but it would lead to higher rates. I see at least as many people complaining about the rates as I do about the bankruptcy issue.

Fair enough. To be clear, I have no problem with rates on student loans going up, for the reasons you mentioned.

 

[comfortably numb]

I'm too dumb to make a good argument about this topic when you bring in sports but it just seems nuts that a school/conference can sign a network TV deal for millions(billions?) yet tuition continue to rise each year.

I mean, i guess it can never be...."Hey, everyone we just signed a deal for our football team to be on Fox for 100M and we dropped our tuition 39%"

College is now #2 on my list of businesses I wish I had started

#1 A church

#2 A college

#3 A yoga pants store

 

[thecatch]

I'm typiclly an Independent, but more and more I'm hating the left - Don't get me wrong, I hate the right as well, but who the #### do these entitled ####wads think they are?

1000's of students march across the country for free college

I mean really, #### off. Glad my kids will have a leg up on all these self entitled doucchebags.

A few hundred students rallied on the campus of the historically progressive University of California Berkeley, and posted placards on the outside of a class building showing their individual student debt loads, ranging from just several thousand dollars to more than $100,000.

Read more at Reutershttp://www.reuters.com/article/2015/11/13/us-usa-college-protests-idUSKCN0T116W20151113#iB2614VplCU3jkfU.99

Huge shocker here... Let me give you something for free, I'll call it advice; Go to a local junior college for 2 years, transfer into a state school, work while you do it, and you can have a four year degree with almost no debt when you graduate.

Oh, you want to go to Cal Berkley? Great, I want a $3.5M brownstone - I won't buy one because the mortgage will have me on suicide watch, so I'll look at something that fits my budget, you #######s should do the same.

:rantover: Good luck with life idiots. The more moron proof we make the world, the bigger the moron we create!

Yea you're going to go real far in life with only that worthless AA degree and some half-### state school diploma.

Berkeley is a state school ...

 

[Juxtatarot]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

 

[fantasycurse42]

Go f**k yourself should be the standard reply to all protests.

Well, I was looking out my hotel window watching the Hands Up/Ferguson protest in downtown Newark and walking out and giving that reply never came to my mind....

Newark can be a dangerous place.

 

[fantasycurse42]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

 

[Gawain]

Thanks for the details on point #1. That is a curious history.

On point 2, just because a debt can't be erased doesn't mean it is "performing". If almost 30% of student debt (that is in its repayment period) isn't being paid back on schedule, which is the rate right now, that is a problem for lenders, even if they don't fear bankruptcy wiping out their principal. If they faced the risk of losing principal too, then the rates on student debt would be that much higher.

Performing or not, the debt is still there. People who are paying through income garnishment, seized tax returns and on alternate schedules are still paying back, even if not on schedule.

Lenders don't have to worry about principal or interest. The fees accrued by the loans stick to total.

For example, the Feds have a rehabilitation program for defaults. After successful rehabilitation (10 on-time payments of 15% of your disposable income), your loan is increased by 15% and sent to Sallie Mae at a higher interest rate than the defaulted loans. So by proving you're now a more responsible debtor, you get the honor of owing 15% more, having all outstanding interest recapitalized into the original loan and paying at a higher rate.

Can you imagine a credit card company trying this with delinquent accounts?

 

[fantasycurse42]

Thanks for the details on point #1. That is a curious history.

On point 2, just because a debt can't be erased doesn't mean it is "performing". If almost 30% of student debt (that is in its repayment period) isn't being paid back on schedule, which is the rate right now, that is a problem for lenders, even if they don't fear bankruptcy wiping out their principal. If they faced the risk of losing principal too, then the rates on student debt would be that much higher.

Performing or not, the debt is still there. People who are paying through income garnishment, seized tax returns and on alternate schedules are still paying back, even if not on schedule.

Lenders don't have to worry about principal or interest. The fees accrued by the loans stick to total.

For example, the Feds have a rehabilitation program for defaults. After successful rehabilitation (10 on-time payments of 15% of your disposable income), your loan is increased by 15% and sent to Sallie Mae at a higher interest rate than the defaulted loans. So by proving you're now a more responsible debtor, you get the honor of owing 15% more, having all outstanding interest recapitalized into the original loan and paying at a higher rate.

Can you imagine a credit card company trying this with delinquent accounts?

WTF, that sounds criminal.

 

[thecatch]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

A statutory waiting period after leaving school before you could file.

 

[sbonomo]

Instate tuition at all cal schools used to be basically community college rates. I think current students have a right to complain that they are not getting same deal past generations got

are you talking 40 years ago? it has never been cheap.

 

[Gawain]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

What prevents all home owners from filing the instant they are underwater?

Ten years (not seven) is a long time to have a BK on your credit report.

The pains of filing are unlikely to outweigh the repayment costs for more than a few debtors.

When student loans were dischargable with no time limit (pre-75) less than 1% were discharged due to BK.

 

[MAC_32]

Not every protest is BS. Not everybody who protests is spoiled or undeserving. Lots of knee jerk reaction in here.

I think that for those college students below a certain income level, government ought to help out with the student loans, maybe eliminate them altogether. It shouldn't be for everyone. But it's time to increase the safety net.

They have this already. It is called financial aid at a state school.

And Pell Grants.

If their parents submit the info required for their child to receive these benefits. Common problem with students in these situations. Parents don't do what they're supposed to do, student never gets grants, college won't let student register for future classes, student has $10k debt sent to collections because student can't pay, then they have uncle Sam's debt coming a few months later that they also can't pay. Student is totally screwed and often times through no fault of their own.

 

[fantasycurse42]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

What prevents all home owners from filing the instant they are underwater?

Ten years (not seven) is a long time to have a BK on your credit report.

The pains of filing are unlikely to outweigh the repayment costs for more than a few debtors.

When student loans were dischargable with no time limit (pre-75) less than 1% were discharged due to BK.

Has it always been 10 years? Always thought it was 7.

 

[thecatch]

Instate tuition at all cal schools used to be basically community college rates. I think current students have a right to complain that they are not getting same deal past generations got

are you talking 40 years ago? it has never been cheap.

UC tuition has almost doubled in the last ten years.

 

[Juxtatarot]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

What prevents all home owners from filing the instant they are underwater?

Ten years (not seven) is a long time to have a BK on your credit report.

The pains of filing are unlikely to outweigh the repayment costs for more than a few debtors.

When student loans were dischargable with no time limit (pre-75) less than 1% were discharged due to BK.

Has it always been 10 years? Always thought it was 7.

Chapter 7 bankruptcy are on for 10 years. Most other bad stuff is only 7.

 

[sbonomo]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

100% of what i was thinking as well. Can you imagine with this generation - the BK would be the financing mechanism for school. They just don't care.

 

[[icon]]

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

100% of what i was thinking as well. Can you imagine with this generation - the BK would be the financing mechanism for school. They just don't care.

What would prevent this?

And let's not pretend those losses just vaporize. Boom... now college costs double yet again.... pushing more folks to file.

 

[RedmondLonghorn]

Thanks for the details on point #1. That is a curious history.

On point 2, just because a debt can't be erased doesn't mean it is "performing". If almost 30% of student debt (that is in its repayment period) isn't being paid back on schedule, which is the rate right now, that is a problem for lenders, even if they don't fear bankruptcy wiping out their principal. If they faced the risk of losing principal too, then the rates on student debt would be that much higher.

Performing or not, the debt is still there. People who are paying through income garnishment, seized tax returns and on alternate schedules are still paying back, even if not on schedule.

Lenders don't have to worry about principal or interest. The fees accrued by the loans stick to total.

For example, the Feds have a rehabilitation program for defaults. After successful rehabilitation (10 on-time payments of 15% of your disposable income), your loan is increased by 15% and sent to Sallie Mae at a higher interest rate than the defaulted loans. So by proving you're now a more responsible debtor, you get the honor of owing 15% more, having all outstanding interest recapitalized into the original loan and paying at a higher rate.

Can you imagine a credit card company trying this with delinquent accounts?

No, I can't. But that is because credit card companies get to choose to whom and how much they loan.

These unsubsidized Stafford loans are available to everybody in more or less unlimited amounts because the Federal government sponsors the program. So the recipients are being granted a benefit on the front end. A lot of them are getting something that they never would have gotten otherwise. And nobody is being forced to take it.

 

[Gawain]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

100% of what i was thinking as well. Can you imagine with this generation - the BK would be the financing mechanism for school. They just don't care.

Then why doesn't this happen with credit cards? If you look at the age ranges published by the Justice Dept, individuals account for just 5.4% of filings.

Credit cards are thrown at college age kids and most don't take the "fresh start." (Which isn't, declaring BK sucks and has a myriad of impacts from the apartments you can get, to the jobs you can get)

We have figures from when student debt could be discharged. It was under 1% of all student loans.

 

[RedmondLonghorn]

Not every protest is BS. Not everybody who protests is spoiled or undeserving. Lots of knee jerk reaction in here.

I think that for those college students below a certain income level, government ought to help out with the student loans, maybe eliminate them altogether. It shouldn't be for everyone. But it's time to increase the safety net.

They have this already. It is called financial aid at a state school.

And Pell Grants.

If their parents submit the info required for their child to receive these benefits. Common problem with students in these situations. Parents don't do what they're supposed to do, student never gets grants, college won't let student register for future classes, student has $10k debt sent to collections because student can't pay, then they have uncle Sam's debt coming a few months later that they also can't pay. Student is totally screwed and often times through no fault of their own.

And?

Idiot-proofing benefits that the government provides is not really something I worry very much about.

 

[MAC_32]

Not every protest is BS. Not everybody who protests is spoiled or undeserving. Lots of knee jerk reaction in here.

I think that for those college students below a certain income level, government ought to help out with the student loans, maybe eliminate them altogether. It shouldn't be for everyone. But it's time to increase the safety net.

They have this already. It is called financial aid at a state school.

And Pell Grants.

If their parents submit the info required for their child to receive these benefits. Common problem with students in these situations. Parents don't do what they're supposed to do, student never gets grants, college won't let student register for future classes, student has $10k debt sent to collections because student can't pay, then they have uncle Sam's debt coming a few months later that they also can't pay. Student is totally screwed and often times through no fault of their own.

And?

Idiot-proofing benefits that the government provides is not really something I worry very much about.

I think there need to be more safety nets for these types of cases. Everyone loses.

 

[RedmondLonghorn]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

100% of what i was thinking as well. Can you imagine with this generation - the BK would be the financing mechanism for school. They just don't care.

Then why doesn't this happen with credit cards? If you look at the age ranges published by the Justice Dept, individuals account for just 5.4% of filings.

Credit cards are thrown at college age kids and most don't take the "fresh start." (Which isn't, declaring BK sucks and has a myriad of impacts from the apartments you can get, to the jobs you can get)

We have figures from when student debt could be discharged. It was under 1% of all student loans.

Because even the shadiest credit card company won't loan a bad credit enough money to make filing for BK make sense on the basis of the principal debt on that credit card alone.

 

[RedmondLonghorn]

Not every protest is BS. Not everybody who protests is spoiled or undeserving. Lots of knee jerk reaction in here.

I think that for those college students below a certain income level, government ought to help out with the student loans, maybe eliminate them altogether. It shouldn't be for everyone. But it's time to increase the safety net.

They have this already. It is called financial aid at a state school.

And Pell Grants.

If their parents submit the info required for their child to receive these benefits. Common problem with students in these situations. Parents don't do what they're supposed to do, student never gets grants, college won't let student register for future classes, student has $10k debt sent to collections because student can't pay, then they have uncle Sam's debt coming a few months later that they also can't pay. Student is totally screwed and often times through no fault of their own.

And?

Idiot-proofing benefits that the government provides is not really something I worry very much about.

I think there need to be more safety nets for these types of cases. Everyone loses.

Safety nets for the safety nets?

 

[Cold Dead Hands]

Not every protest is BS. Not everybody who protests is spoiled or undeserving. Lots of knee jerk reaction in here.

I think that for those college students below a certain income level, government ought to help out with the student loans, maybe eliminate them altogether. It shouldn't be for everyone. But it's time to increase the safety net.

They have this already. It is called financial aid at a state school.

And Pell Grants.

If their parents submit the info required for their child to receive these benefits. Common problem with students in these situations. Parents don't do what they're supposed to do, student never gets grants, college won't let student register for future classes, student has $10k debt sent to collections because student can't pay, then they have uncle Sam's debt coming a few months later that they also can't pay. Student is totally screwed and often times through no fault of their own.

And?

Idiot-proofing benefits that the government provides is not really something I worry very much about.

I had Pell grants and financial aid and took care of it all myself. Including fixing paperwork issues that cropped up every year.

 

[MAC_32]

Not every protest is BS. Not everybody who protests is spoiled or undeserving. Lots of knee jerk reaction in here.

I think that for those college students below a certain income level, government ought to help out with the student loans, maybe eliminate them altogether. It shouldn't be for everyone. But it's time to increase the safety net.

They have this already. It is called financial aid at a state school.

And Pell Grants.

If their parents submit the info required for their child to receive these benefits. Common problem with students in these situations. Parents don't do what they're supposed to do, student never gets grants, college won't let student register for future classes, student has $10k debt sent to collections because student can't pay, then they have uncle Sam's debt coming a few months later that they also can't pay. Student is totally screwed and often times through no fault of their own.

And?

Idiot-proofing benefits that the government provides is not really something I worry very much about.

I think there need to be more safety nets for these types of cases. Everyone loses.

Safety nets for the safety nets?

for the broke 19 year old that is getting boned because their parents are dead beats.

 

[[icon]]

You know... sometimes life is going to be tough... not everyone is going to win... sometimes tough decisions are going to be made.

the idea of the super safety nets, is too many people game the system and take up residence in it.

 

[Juxtatarot]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

What prevents all home owners from filing the instant they are underwater?

Ten years (not seven) is a long time to have a BK on your credit report.

The pains of filing are unlikely to outweigh the repayment costs for more than a few debtors.

When student loans were dischargable with no time limit (pre-75) less than 1% were discharged due to BK.

If a mortgage is discharged in bankruptcy, the lender still has the right to foreclose.

There wouldn't be too many pains. If the kids have jobs, they could get loans and credit cards right after. Maybe they'd pay a little higher of a rate, but it's not like they had well established credit beforehand.

Bankruptcies are much more common these days. They are marketed by attorneys and the stigma against them is less than it used to be. And, of course, the amount of student loans people have now has skyrocketed. I don't think looking at old numbers makes much sense now.

 

[Juxtatarot]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

100% of what i was thinking as well. Can you imagine with this generation - the BK would be the financing mechanism for school. They just don't care.

Then why doesn't this happen with credit cards? If you look at the age ranges published by the Justice Dept, individuals account for just 5.4% of filings.

Credit cards are thrown at college age kids and most don't take the "fresh start." (Which isn't, declaring BK sucks and has a myriad of impacts from the apartments you can get, to the jobs you can get)

We have figures from when student debt could be discharged. It was under 1% of all student loans.

Credit cards have certainly not been "thrown" at college kids since the Credit CARD Act took effect.

 

[Gawain]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

What prevents all home owners from filing the instant they are underwater?

Ten years (not seven) is a long time to have a BK on your credit report.

The pains of filing are unlikely to outweigh the repayment costs for more than a few debtors.

When student loans were dischargable with no time limit (pre-75) less than 1% were discharged due to BK.

If a mortgage is discharged in bankruptcy, the lender still has the right to foreclose.

There wouldn't be too many pains. If the kids have jobs, they could get loans and credit cards right after. Maybe they'd pay a little higher of a rate, but it's not like they had well established credit beforehand.

Bankruptcies are much more common these days. They are marketed by attorneys and the stigma against them is less than it used to be. And, of course, the amount of student loans people have now has skyrocketed. I don't think looking at old numbers makes much sense now.

Please define these days.

In August of 2015:

There now have been 57 straight months of year-over-year declines in the bankruptcy filing rate.

Bankruptcies spiked after the mortgage crisis...a crisis the government took swift and costly action on.

 

[Gawain]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

100% of what i was thinking as well. Can you imagine with this generation - the BK would be the financing mechanism for school. They just don't care.

Then why doesn't this happen with credit cards? If you look at the age ranges published by the Justice Dept, individuals account for just 5.4% of filings.

Credit cards are thrown at college age kids and most don't take the "fresh start." (Which isn't, declaring BK sucks and has a myriad of impacts from the apartments you can get, to the jobs you can get)

We have figures from when student debt could be discharged. It was under 1% of all student loans.

Credit cards have certainly not been "thrown" at college kids since the Credit CARD Act took effect.

Ahh, so the answer is government intervention to protect college-age students from predatory lenders?

 

[MAC_32]

You know... sometimes life is going to be tough... not everyone is going to win... sometimes tough decisions are going to be made.

the idea of the super safety nets, is too many people game the system and take up residence in it.

I'd rather the feds help these students out than the complaining Cal students. Their own decision making put the majority of them in this situation. Figure out a way to get out of it. The ones getting hosed because of their parents? Help them out. Sure, there will be some that play the system, but that will be the case no matter what regulations are in place.

 

[Juxtatarot]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

What prevents all home owners from filing the instant they are underwater?

Ten years (not seven) is a long time to have a BK on your credit report.

The pains of filing are unlikely to outweigh the repayment costs for more than a few debtors.

When student loans were dischargable with no time limit (pre-75) less than 1% were discharged due to BK.

If a mortgage is discharged in bankruptcy, the lender still has the right to foreclose.

There wouldn't be too many pains. If the kids have jobs, they could get loans and credit cards right after. Maybe they'd pay a little higher of a rate, but it's not like they had well established credit beforehand.

Bankruptcies are much more common these days. They are marketed by attorneys and the stigma against them is less than it used to be. And, of course, the amount of student loans people have now has skyrocketed. I don't think looking at old numbers makes much sense now.

Please define these days.

In August of 2015:

There now have been 57 straight months of year-over-year declines in the bankruptcy filing rate.

Bankruptcies spiked after the mortgage crisis...a crisis the government took swift and costly action on.

I was referring to the years after 1976 (before the loans became non-dischargeable). Here's a link to a chart showing the increases since 1980. http://www.bankruptcyaction.com/USbankstats.htm

 

[DoubleG]

For those saying student debt is too high...boo ####### hoo. My nephew has a job lined up out of college and he'll be making damn near what I do. except I have 20+ years experience and a Masters in my field. Yes, he's in a different field, but he'll have no problem paying off his loans. None.

Education costs have gone up - and so have the salaries of the graduates.

 

[Juxtatarot]

If you make student loans dischargeable, it will make financial sense for many new grads to file immediately after graduation. Bankruptcy attorneys would have a field day.

This is my thought exactly. File at 22, by 29 you've got a fresh start and no debt.

What would prevent this?

100% of what i was thinking as well. Can you imagine with this generation - the BK would be the financing mechanism for school. They just don't care.

Then why doesn't this happen with credit cards? If you look at the age ranges published by the Justice Dept, individuals account for just 5.4% of filings.

Credit cards are thrown at college age kids and most don't take the "fresh start." (Which isn't, declaring BK sucks and has a myriad of impacts from the apartments you can get, to the jobs you can get)

We have figures from when student debt could be discharged. It was under 1% of all student loans.

Credit cards have certainly not been "thrown" at college kids since the Credit CARD Act took effect.

Ahh, so the answer is government intervention to protect college-age students from predatory lenders?

I wouldn't always call them predatory but, yes, government action resulted in less credit cards for kids under 21. Regardless, all I'm arguing is that if you allow student loans to be dischargeable again, bankruptcies will explode and become a wise financial strategy for many recent grads.

 

[comfortably numb]

For those saying student debt is too high...boo ####### hoo. My nephew has a job lined up out of college and he'll be making damn near what I do. except I have 20+ years experience and a Masters in my field. Yes, he's in a different field, but he'll have no problem paying off his loans. None.

Education costs have gone up - and so have the salaries of the graduates.

Whew.

Thank GOD

Sounds like we should raise tuition and loan interests!

 

[Andy Dufresne]

In the last month I've run into two recent grads with over $100k in debt - one is a teacher and the other has a sports management degree.

Pretty sure they're both financially screwed.

 

[Juxtatarot]

In the last month I've run into two recent grads with over $100k in debt - one is a teacher and the other has a sports management degree.

Pretty sure they're both financially screwed.

Average debt per graduating borrower is up to $35,000.

 

[chauncey]

And yet many countries manage to not bankrupt a generation for an education more than one with completely free college. We compete with those countries but we will be losing if we are not producing the educated people we need. And lastly it would cost less for the US to just pay for it then the way we do it now.

How do we pay for everyone to go to school for free?

The state of New Mexico has been doing it for years.

Are you referring to the lottery scholarship? I think it is only available to students who graduate high school with a certain GPA and maintain a certain GPA in college. I am pretty sure Georgia has a similar program.

Paying for college with lottery monies is certainly beneficial for some people but there is also the counter point that lotteries are a tax on the poor.

 

[RnR]

I will say this: If they start forgiving loans like they never happened, there's going to be some bad things go down.

People that worked their asses off to pay for school and then pay off what loans they had to take in the first year or two out of college rather than dumping money into a new car, house, etc. that they couldn't afford instead are likely to riot in the streets over this.

You don't have to graduate so deep in debt.

 

[avoiding injuries]

https://www.youtube.com/watch?v=P36x8rTb3jI

good example of this mentality

I want to see a follow up interview from this woman.

 

[None_More_Black]

Looking at cal state tuition it is still pretty cheap at 5400 a Pell grant could pay most of this. California still has reasonable options but obviously cal state is no Berkeley

 

[Gawain]

I will say this: If they start forgiving loans like they never happened, there's going to be some bad things go down.

People that worked their asses off to pay for school and then pay off what loans they had to take in the first year or two out of college rather than dumping money into a new car, house, etc. that they couldn't afford instead are likely to riot in the streets over this.

You don't have to graduate so deep in debt.

I vividly remember the rioting of all the folks that were current on their mortgages back in 08.

Please tell me more.