Sneer all you want. Our economy is stilted by students suffocating underneath such huge loans which cannot be discharged even in bankruptcy court! We have Dumbo Dubya & the GOP Congress to thank for that bit of legislation in 05. Not to sound like a broken record but some of us on FR warned about that ill advised “gift” to the loan industry but were shouted down then. The chickens have come home to roost.
On the other side of the coin, taxpayers shouldn’t be completely on the hook for the student’s admitted stupidity. Loan “forgiveness” shouldn’t be painless. Bankruptcy must be initiated to get out of the loans.
>>Sneer all you want. Our economy is stilted by students suffocating underneath such huge loans which cannot be discharged even in bankruptcy court! <<
Boo freaking hoo. They knew what they were getting into when they received the loans. How about getting a single degree, then a J-O-B? That is the way it used to be. Nowadays it is just like with this foolish girl: 10 years, 2 degrees, no skills, no job.
That is like fat people blaming the owner of the all you can eat buffet for their obesity.
And I repeat: any loan forgiveness had better be retroactive to the 1970s.
Once Congress passed laws that made it more nearly impossible to discharge credit card and student loan debt in bankruptcy court, they basically turned the whole system upside down. One of the important factors in the collapse of the mortgage industry in recent years is that a mortgage became one of the easiest forms of debt for someone to walk away from.
If someone in this woman's situation came to me for advice, I'd tell her to take out a second mortgage or home equity loan (or have her parents do it, if she doesn't own her home), pay off the student loan, and then mail the house keys to the bank. Case closed. Go to the head of the class, young lady!
I think the major problem with student loans is the misconception regarding the interest rates.
Students are given “low interest” loans but the way the interest is compounded, the reality is that if one pays off the loan according to the ten year plan, one actually pays back more than fifty percent to the lender.
I learned this the hard way when I agreed to take out a parent loan for my daughter to attend an out of state university. The loan was for $13,000 at 7.25% which seemed okay, but when I got the payment plan the amount I will pay back, if I maintain the standard payment for ten years is more than $19,000!
Last year, of the $1650.00 I paid toward the loan, nearly $900.00 of it was in interest.
That is the information that students and parents need before they take out such large loans. Informed consent is what is needed, not forgiveness or the ability to default on what is a personal choice. No one forced me to take that loan, just as no one forced this young woman and her parents.
We must stop allowing people to borrow all kinds of money with the thought that they can just walk away from it later. Making it harder to default will hopefully make them more cautious about taking on debt.
No. These "students" took on the debt, now they pay it off (where the hell do you think that "debt" goes on a Federally backed student loan if individuals can simply take a bankruptcy? US!!!). It will suck, they won't drive beamers or have huge mcmansions, they will simply not have their full pay for a decade or more until they fulfill their obligation. It is not my or anyone else's fault they took the loans.
What, they don't like a circumstance they created by free will so *poof*, they are forgiven? Screw that noise. The "impact" on the economy in reality will be a correction for poor planning on individual's decisions.
I say for every student defaulting on their loans, the schools they attended ALSO share in part of relieving the debt obligation as the schools should have vetted better themselves instead of running a mill.
A perfectly valid point.
But, about this "lie" the parents told this kid. It's probably more of misled. Folks from that generation still believe college guarantees better jobs. They also believe network news tells the truth. The world has changed and they failed to recognize it.
People who borrow money need to understand they have to pay it back.
If this young woman doesn’t understand that, I don’t see how she’s smart enough to go to college.
The only other alternative excuse would be that she’s corrupt - and felt she could borrow the money and skip out on paying it back.
There are some acceptable reasons why people get into this kind of mess - but the excuse, ‘Mommy and Daddy’ should have told me - isn’t one of them. We are talking ‘college’ right? She’s not 13 or 14 years old, right?
Besides, she’s now learned something important - that good judgement often comes from bad judgement. She’ll be more careful next time. It’s how we all learn.
Bankruptcy must be initiated to get out of the loans.
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Government student loans are not cleared by filing bankruptcy.