garnishee their wages, confiscate their tax refunds and put liens in everything they own... took me ten+ years to repay my loans, screw-em
Posted on 08/02/2016 1:50:28 PM PDT by Lorianne
The letters keep coming, as do the emails. They head, unopened, straight into Jason Osborne’s trash and deleted folder. The U.S. government desperately wants Mr. Osborne and his wife to start repaying their combined $46,500 in federal student debt. But they are among the more than seven million Americans in default on their loans, many of them effectively in a standoff with the government. These borrowers have gone at least a year without making a payment—ignoring hundreds of phone calls, emails, text messages and letters from federally hired debt collectors. Borrowers in long-term default represent about 16% of the roughly 43 million Americans with student debt, now totaling $1.3 trillion across the U.S., and their numbers have continued to climb despite the expanding labor market.
Their failure to repay—in many cases due to low wages or unemployment, in other cases due to outright protest at what borrowers see as an unfair system—threatens to leave taxpayers on the hook for $125 billion, the total amount they owe. The Osbornes say they are the victims of a for-profit school that made false promises and a predatory lender—the government. “Do you think I’m going to give them one penny I’m making to pay back the loan for a job I’m never going to hold?” said Mr. Osborne, 45, who studied to be a health-care worker but can’t find a job as one. The rising number of borrowers in default weakens the economy as underwater homeowners did after the housing crash: by damaged credit, an inability to spend and save for the future, and a lack of resources to move to better jobs.
(Excerpt) Read more at wsj.com ...
Student loans and how they have affected the cost of education, shows exactly why minimum wage doesn’t work, and why govt schemes to pay everyone a universal salary, will also not work.
That’s what I was thinking. “...Mr. Osborne, 45, who studied to be a health-care worker but can’t find a job as one. “ I call BS.
It took me 10 years to pay off my student loan, another 10 years to save enough money for my daughter’s tuition. Actually, she graduated as a double engineering major and had a job commitment in her junior year. Now, she is paying me back the $$ which is the definition of a student *LOAN*. If there is a federal program for *free* college, she deserves a rebate.
You sir are absolutely correct.
I just finished paying full boat tuition for 3 kids. I didn’t want them to be saddled with such high debt. If the government weren’t involved with student loans, I could have negotiated lower tuition.
I just paid. I complained about fees and costs the whole way. They don’t care.
Why should they? Soon when tuition bubbles pop, there will be lots of destitute professors and administrators.
I won’t care. Why should I?
garnishee their wages, confiscate their tax refunds and put liens in everything they own... took me ten+ years to repay my loans, screw-em
How can you not get a job as a health care worker? It is one field that needs waaaay more staff. If the idiot couldn’t pass the tests or the background why is that my burden?
When President Coolidge was asked if he would forgive the war debt of Great Britain he answered “They hired the money didn’t they?”
Bankruptcy should not be an option, in my opinion. It creates a huge moral hazard problem. Lenders can negotiate an extension of the duration of the loan (with lower monthly payments) or agree to take a haircut. But bankruptcy laws are just another nefarious government interference into voluntary contracts.
Why not?
Bankruptcy can mean a restructuring as you suggest, or it could mean liquidation.
If someone is insolvent a law saying they have to repay is meaningless.
A loan has two actors. The lender and the borrower. When you remove risk for the lender, you get ridiculous situations like we have now.
Lending money should reflect the risk of repayment. Let stupid people borrow money ftom you to the point they can’t repay, shame on you.
Bankruptcy, actual or defacto is inevitable. Gnashing of teeth or whining about unfairness changes nothing.
They can’t pay. A lender can force them into bankruptcy if they think there is something to recover.
We need to get past this tyranny of the ivory towers. Let the universities prove their financial value.
Student debt cannot be discharged in bankruptcy proceedings. You own it, so to speak.
Why would we even allow the Government to “Guarantee Loans” for ANYTHING, with the TAXPAYERS MONEY???
I thought SLAVERY was Abolished?? Or is it the case that as long as we pass a law demanding the Fruits of Labor in perpetuity from FUTURE GENERATIONS it is somehow not SLAVERY??
That was the point of my post. The law was specifically amended to ELIMINATE the ability to discharge student loan debt via bankruptcy. At one time you could and it was grossly abused!
They wouldn’t give them to everyone who can fog a mirror if you could discharge them in bankruptcy.
As another poster mentioned, prior to reforms of the student loan program, people with solid expected future cash flows (e.g., recent medical school grads) were declaring bankruptcy to discharge six-figure student loans. This was an egregious abuse of bankruptcy law. One solution, which I think you suggested in your earlier post, is to require loan payments that are calibrated to expected future (or, possibly, actual) earnings. The problem is that bankruptcy law doesn’t recognize human capital as an asset that can be attached by a lender. This is the crux of the distortion that the reforms, unsuccessfully, tried to address.
They should do a test on bankruptcy for a limited number of professionals. Any doctor, teacher, lawyer or any other professional who receives a doctorate/license who declares bankruptcy for student loans should be stripped of their doctorate, professional license and not allowed to reference attending any college. You declare bankruptcy and they take your car, etc. back so the same with professionals.
Let’s see how that works before we jump in there.
How many self-righteous judgmental purists on this site know someone who filed bankruptcy because of a failed business that lost millions? Do you disapprove of that option too?
Students who in good faith earned worthless degrees, suffered ill health or struggle in a bad economy have no such option. Interest keeps accruing even during legitimate deferment periods and is capitalized often more than doubling the value of the original loan. There is no cap on how much interest can be capitalized. The loan explodes like a monster into something totally unmanageable. No way to cap that or restructure the debt. Many of these folks are out of work, young people who can’t get a fulltime job, or are past retirement age.
Maybe the banks who were bailed out of the mess they created in 2008 can take one for the team here.
Trump sees the problem as one that needs attention. It’s a good move for a lot of reasons. I hope he does something to stop the madness.
Just imagine what would happen if taxpayers did this.
I hear ya......
These freeloaders get no sympathy from me..
Took me 14 years to pay mine off. I still have that final statement with $0.00 balance.
“Do you disapprove of that option too?”
I think you are barking up the wrong tree. I’m not in any way against bankruptcy for unpayable debt.
The purpose of bankruptcy is to let otherwise productive citizens move on and to try to prosper and to clear debts that can’t be paid.
I wasn’t disagreeing with you. Just pressed the reply button after your comment to continue the discussion. Should have replied to the original poster.
“The purpose of bankruptcy is to let otherwise productive citizens move on and to try to prosper and to clear debts that can’t be paid.”
Yes. And I think that within reason students should have the same option. The student loan system seems to have been set up by Congressional cronies to enrich the pockets of the Universities and the banks. Students are being crushed under the wheels of this arrangement. They can’t move on and prosper saddled with the albatross of a huge growing loan and a worthless degree. This problem needs to be framed differently from the way an indignant Limbaugh has framed it over the years.
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