Posted on 10/12/2015 8:26:54 AM PDT by reaganaut1
Mark Twain famously said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
That observation could easily be applied to the situation facing students who have amassed large college debt burdens: they think they know that those debts cannot be discharged through bankruptcy. But that just ain’t so.
The “undue hardship” provision in the U.S. Bankruptcy Code says that student loans cannot be discharged unless “excepting such debt … would impose an undue hardship on the debtor and the debtor’s dependents….” Just how difficult is it for a student debtor to get a court to rule that having to pay off student loans would be an “undue hardship”?
Actually, not as difficult as most people think.
Writing on Huffington Post, Steve Rhode (who calls himself the “get out of debt guy”) states, “The general perception is that federal student loans are not dischargeable in bankruptcy. Obviously that assumption is not true because an allowance exists for discharge in the case of undue hardship. But many incorrectly assume that threshold is impossible or nearly impossible to accomplish.”
Rhode finds the support for his conclusion in his analysis of 35 adversary proceedings in 2012 where the debtor sought discharge of student loans through bankruptcy. In those cases, the debtor won full discharge in 47 percent and received some reduction or more favorably repayment terms in another 33 percent.
Those 2012 numbers are in the same vicinity as the numbers calculated by Professor Jason Iuliano from cases filed in 2007, which formed the basis for his 2011 paper published in American Bankruptcy Journal, An Empirical Assessment of Student Loan Discharges and the Undue Hardship Standard.
(Excerpt) Read more at forbes.com ...
“...35 adversary proceedings in 2012”
Out of how many? Many hundreds of thousands, if not somewhat over a million. And let there be no doubt, soon as the Feds see whatever movement this is bound to spark take root, they will scrutinize hardship cases more.
To the Financial folks on this site...
Who takes the “haircut” if and when this becomes widespread?
I am sure they have this loaded in their equations and we will end up doing so as The Fed ain’t gonna take the whole fall
Just great.
Let everyone else pay for irresponsibility, waste, unearned luxury, and bad investment decisions.
Yes, I know, I know, it was my choice, but I also think colleges have a way of "sucking you in" and getting the naive to rack up those student loans so they stay in business and the common student gets struck working minimum wage jobs just to make ends meet and pay off those loans.
So I can see both sides of the issue.
Who takes the “haircut” if and when this becomes widespread?
WE THE PEOPLE!
See the Federal Reserve, and remember the name of the game has always been BAIL OUT!
Exactamundo my FRiend....
So they take the fruit of their issue (
Students who want to work and paid for training for jobs that do not exist
They knew this going in and lay it off on the Students responsibility
So many of these “schools” have come and gone and the cumulative impact across the board raising the competency and competitive impact of our workforce is negligible if much at all
And now we pay again...
Wonder what the ROE on "Critical Race Theory" is.
If read to the end the article is actually pretty good. Not saying I agree with it all. Highlights: The US taxpayer will bear the costs of the defaults, the debts are dischargeable but not in any predictable fashion, education is oversold because the lenders are guaranteed their money, defaults may cause some curtailment in lending which is good, colleges should be held accountable for defaults.
The Democrats are going to buy this next election with student loan forgiveness.
You know it. I know it. The people in the next galaxy know it.
It’s the reason Obama took direct control of this program in ‘09.
ducttape, would you mind sharing what kind of classes you took, what field your degree was in, and why you felt like you were “sucked in” to taking those courses and amassing that debt? Also, you don’t have to name the school, but can you characterize the type of school you attended?
The process is crooked as sin. When I was in high school back in the 90s, they handed the Student Loan applications to us in class to fill out. Not knowing any better, I did.
I despised the idea of loans because my parents really messed up big with them, and when I got “my money” I was appalled at what I had done. It was more money than I’ve ever seen (in today’s dollars it was chicken feed), and I swore I would never get another. It sure made for a tough time paying for school, but it left me without the staggering debt.
A hard lesson to learn, and one that needs to never happen, but the university industry has got society by the short hairs.
That is certainly the business model of many "trade school" so-called colleges. They are really student loan and GI Bill processing centers.
The study is badly flawed, only looking at 35 instances. For the 99+% of the population, the answer is ‘fuggetaboutit’. The loans keep building up as people can only pay the minimum, and when they die, the lenders or the feds come after the estate because the debt is far beyond what the initial loan was.
Time to change the whole thing.
First, if the debt is 20 years old, forgive it. Period. It’s not gonna be paid, so charge it off.
Second, do away with student loans. It will force colleges to re-evaluate their costs, etc as the number of people going to school for useless degrees will fall drastically.
Third, it will eliminate degrees in “woman’s studies”, etc as these are useless except to create more burger flippers at McDonalds.
Fourth, it will change what constitutes a degree. No longer will you be taking all these mandatory non-relevant courses required by colleges just to fill up the 130 hours. Cut the degree to 60-80 hours, focus on what is IMPORTANT to the course of study. If it puts some departments out of business, fine.
Fifth, eliminate the “you must graduate in X years” or you lose your credits. Yes, some colleges do this. If it takes you 10 years, so be it.
On top of that, if the debtor is successful in discharging the loan in bankruptcy court, the U.S. Attorney, acting on behalf of the Department of Education, will always appeal to the District Court, and then to the Circuit Court if necessary. The only occasion they will concede dischargeabilty is if the debtor has qualified for a Social Security disability.
:-)
When I got older I was able to work on my own vehicles, for the most part. I also helped a gentleman wire a new section of the house I lived in. So I was helpful all over the place. When I decided to enter the military (Air Force) I decided I wanted to be a mechanic. Imagine my shock and dismay when the folks at Lackland AFB told me that I was technically colorblind and that I couldn't enter any field that was mechanical, electrical or electronic in nature. My recruiter failed to mention this one small, albeit, very significant detail. So I had to shine a seat with my a$$ for 10 plus years.
Towards the end of my enlistment, I got interested in computers, and I was able to piece together working units with little to no training/schooling. I just "figured it out." That interest in computers continued into my next full time gig working for a local development authority when the IT portion of the company was dumped into my lap. I was able, again, keep the IT segment of the job humming even though I had no formal schooling.
After that job closed up shop (the government withdrew funding), and after recuperating from a near fatal car accident (a little ole lady thought red meant go and broadsided my car. Fortunately I wasn't seriously injured though I have whiplash related pain to this day and I lost my teeth), I decided to finally seek out college and see what they could do for me. A local community college promised me a plethora of job opportunities after graduating with a two year AAS degree. I got two AAS degrees and three certifications, but no IT job. The only thing going to college enabled me to do was enter STEP (Student Temporary Employment Program) at a local military base and through that gain full time employment three years later.
I figured, and the college told me, that I would be able to parlay that college time into a IT job working for Uncle Sam. Two things wrong with that scenario though.
1. All IT Helpdesk functions were outsourced just as I entered federal service (2003-2004). That avenue was close to me.
2. All CSA (Client Support Administrator) and CST (Computer Support Technician) positions were centralized on a local level and the jobs given to ARTs (Air Reserve Technicians).
As such, all IT jobs working for the government were closed off to me. If I want an IT job, I would have to quit my job, leave the federal service and any hope of a government retirement, and strike out on another path. I've been stuck in a general administrative job all this time (11 years and counting), and I've been blocked from promoting due to cronyism and nepotism in the federal workplace (go figure huh?).
After all that, I've still been hesitant to leave my current job, that is, until now. A recent Manpower study determined that my current position is not needed and is being deleted. I've applied for a VSIP (Voluntary Separation Incentive Program) buyout but I still don't know if I'll be granted it.
That's about everything from the past 25 years in a nutshell. I'm good with computers. I can take one apart and put it back together with 30 minutes, sometimes less. I've worked with LANs and I'm knowledgeable about how and why it works. I'm good at systems analysis and can plan and purchase IT equipment. I also have experience and knowledge in financial management, bookkeeping and accounts payable. Plus I'm just plain good at "figuring things out." Wherever I'm put or find myself, if there is a problem usually I can fix it.
Currently I live in Indiana, but I'm open to going just about anywhere, except states like New York and California. I've always wanted to live in places like Wyoming, Montana, Idaho, even the eastern parts of states like Oregon. I'm 54 years old but it's time for a change, it's time to get away from the federal government and all of its repressive rules and red tape, but most of all it's time to get back to helping people in whatever way I can do it.
That doesn't sound too corny does it?
See Post 17. If you want more information, I’ll gladly supply it.
Yep, I fell into the same trap, as have my two boys. If there was some way to discharge my student loans I’d be in the front of the line with the paperwork to do so.
Thanks, ducttape. I will reply in private mail.
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