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 ...
Bankruptcy laws can be applied as is to student loan debt if it were allowed.
Bankruptcy laws can be applied as is to student loan debt if it were allowed.
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Yes, if only. But it’s not allowed. Nothing is allowed to prevent the borrower from being swallowed into unmanageable debt until he or she takes a last breath.
I think and hope Trump understands that something has to be done.
Is it the public’s(govt.) fault that someone chose healthcare worker as a career? Why should I be on the hook for their lack of intelligence or poor career choices? I am not going to subscribe to the WSJ so I can’t see what his wife’s excuse for reneging on her financial commitment is, but I bet it’s just that she didn’t get the job in her poor career choice too!
Student loans are the worst possible solution to a problem that never even existed. College was never intended for the Walmart crowd. Schools used to have to worry about reputation and content and prices were set by an open market. Once uncle Sam came in, quality plummeted and the ridiculous profusion of “institutions of higher education” created an endless source of worthless majors where unqualified students could be guaranteed a diploma for just the price of a soul.
There are some great colleges and courses and some students today equal or rival any of their predecessors, but the overall effect of government intervention is the same: more money; less value.
Bankruptcy is the state of the Union. No one will ask about your student loan when the world lies in rubble. Slip loose the dogs of war and let the devil take the hindmost.
“Nothing is allowed to prevent the borrower from being swallowed into unmanageable”
They simply don’t pay. They hide assets, they move on in a different way.
Sort of like Puerto Rico
College was never intended for the Walmart crowd.
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Wow. Aren’t you the purveyor of Democracy!
They simply don’t pay. They hide assets, they move on in a different way.
Sort of like Puerto Rico
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Yes, that’s right. You have conducted your research and discovered they are all scum and thus don’t deserve a bankruptcy option. Back to square one. Off with their heads.
Because the politicians are going to come along afterwards and pool your retirement account into a social fund that stipends people like that?
What are you talking about?
If you owed so much money that the interest exceeded your available income, would you try to hide any money you managed to accumulate from confiscation? I’m guessing you would.
Stop guessing already. You know nothing about me.
“Because the politicians are going to come along afterwards and pool your retirement account into a social fund that stipends people like that?”
You know they are thinking about that. But that becomes a different problem.
If it was grossly abused then people should have hedged or gotten surety for it.
Why don’t you tell me what you would do, instead of getting all huffy.
That’s sort of the point of discussion, isn’t it?
Yeah, but today you need a PhD to be a Physical Therapist in a hospital. WTH is up with that?
Predatory loan officers use false promises and hard sell techniques to push the big loans because they are working on percentage/based COMMISSIONS.
The more debt they sell you, the bigger their own pay days.
I thought I made it clear I believe those with outstanding student loans and no means to pay them back should have options similar to business people filing bankruptcy ... among other possible arrangements. And that I hope Trump will win and find a way to resolve the problem (which is not doing the country any good) despite the indignation of Conservative purists.
But when you brought up Puerto Rico and the idea that student loan debtors are merely finding unscrupulous ways to avoid paying loans back, I saw that as an unsupported departure from the line of discussion and worthy of a sarcastic response.
Mr. Osborn, 45, is a lying sack of sh*t. He could be working tomorrow. He just thinks he deserves more than the job pays.
My point on Puerto Rico is that they have no legal means to declare bankruptcy but are nonetheless bankrupt.
In the end it matters not what the money was spent on. Many kids get approved for loans that go towards things other than tuition.
They are just as bankrupt.
Getting paid under-the-table, putting savings under the mattress, and other shenanigans are actually rational responses to unpayable debts. That is one reason to allow bankruptcy. It doesn’t help anyone to not allow debtors a way out. They need to be able to move on.
Lying about a person’s ability is not virtuous. I’d rather be a purveyor of truth. Exceptionalism served us much better as a nation and a people. If democracy has become synonymous with such egalitarianism, than perchance our elitist founding fathers had a point in creating a Republic.
Yes, the banks whined because they weren't making as much money. That change is one of the main reasons college costs have skyrocketed. Banks would simply adjust whom they lent money to and change the rates in a normal credit lending system. But that law basically put zero risk on the lender and 100% on the borrower as now student loans follow you to the grave. Because of this change, anyone and everyone can and does borrow as much student loans as they want, and colleges are more than happy to raise prices to take it. Get student loans out of the system by making them available for bankruptcy and college costs will fall off a cliff.
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