Should Student Loans be Dischargeable in Bankruptcy? (financing, increase, income)

[Wilson513]

Yes, if they give back the degree.

[andywire]

Originally Posted by Wilson513

Yes, if they give back the degree.

Sounds like a sweet deal to me. No one can take away the learning that hopefully took place.

[SD4020]

Originally Posted by andywire

Sounds like a sweet deal to me. No one can take away the learning that hopefully took place.

That is yet another reason why they should not be dischargable under bankruptcy.

[evilnewbie]

It is a government loan... no.... if it is a private bank loan... yes... if you want to discharge it from bankruptcy then the government can no longer back up these loans... Don't get me wrong, I think it is a good thing because it will hold both the banks and universities accountable for educating Americans... right now, universities can give you a BullSh. degree and not worry about it... banks can loan you the money to do it and not worry about it...

[cpg35223]

Originally Posted by evilnewbie

It is a government loan... no.... if it is a private bank loan... yes... if you want to discharge it from bankruptcy then the government can no longer back up these loans... Don't get me wrong, I think it is a good thing because it will hold both the banks and universities accountable for educating Americans... right now, universities can give you a BullSh. degree and not worry about it... banks can loan you the money to do it and not worry about it...

Your assessment is fundamentally wrong. The reason banks lend money in the first place is because of government assurances that the loans will be repaid by the borrower. Otherwise, they wouldn't do it at all. An 18-year-old is a terrible credit risk.

What's more, this business that 'banks can loan you the money...and not worry about it" is just a bunch of OWS bilge. What about your local community bank or credit union? Those guys do not have the deep pockets that a Citi has, so their exposure is quite high on just about every loan. When you realize that banks work off a tiny margin, then a $100,000 default to a bank with roughly $200,000,000 in assets is a very, very big deal. So to support the notion that people simply walk away from their debt is highly irresponsible.

[Themanwithnoname]

Originally Posted by cpg35223

Your assessment is fundamentally wrong. The reason banks lend money in the first place is because of government assurances that the loans will be repaid by the borrower. Otherwise, they wouldn't do it at all. An 18-year-old is a terrible credit risk.

What's more, this business that 'banks can loan you the money...and not worry about it" is just a bunch of OWS bilge. What about your local community bank or credit union? Those guys do not have the deep pockets that a Citi has, so their exposure is quite high on just about every loan. When you realize that banks work off a tiny margin, then a $100,000 default to a bank with roughly $200,000,000 in assets is a very, very big deal. So to support the notion that people simply walk away from their debt is highly irresponsible.

Till a few years ago (When student loans were made non-bankruptable) they did.

[cpg35223]

Originally Posted by Themanwithnoname

Till a few years ago (When student loans were made non-bankruptable) they did.

You assume that change was made in a vacuum. Student loans were made non-bankruptable because of the abuses, and the fact that banks were beginning to balk at lending the money.

[Themanwithnoname]

Originally Posted by cpg35223

You assume that change was made in a vacuum. Student loans were made non-bankruptable because of the abuses, and the fact that banks were beginning to balk at lending the money.

As I recall there WEREN'T many abuses...

But tuition shot up!

[snofarmer]

Originally Posted by Themanwithnoname

As I recall there WEREN'T many abuses...

But tuition shot up!

Once upon a time it was cool not to pay your student loans.
We now have stiffer regulations because of it.

So tuition shot up, Would you agree everything has gone up in price?
Have any of your costs gone up, i bet they have?


So you want to eat your cake?
You will still have to work.

Ways to get your or some of it paid off for you.

Join the AmeriCorps. The AmeriCorps is a volunteer organization that serves on both a state and local level. AmeriCorps members can receive a modest living allowance, student-loan forbearance, health coverage, and even child care for those who qualify. After successfully completing their term of service, volunteers receive an AmeriCorps Education Award of up to $4,725. This award can be used to pay off qualified student loans, all while providing assistance to those in need and building community. Learn more at Free Government Scholarships - Student Loans Info, Free College Grants, Work Programs.


2 Join the Peace Corps. The Peace Corps serves third world countries by combating hunger, poverty, and building education. The Peace Corps provides it's volunteers with a living allowance (based on the local economy in which volunteers are stationed) and upon returning home, the Peace Corps provides just over $6,000 toward your transition to life back home and can be used in any way the volunteer wishes. Volunteers may apply for deferment of Stafford, Perkins and Consolidation loans, and may receive partial cancellation of Perkins loans (15% for each year of service, up to 70% in total). Learn more by contacting the Peace Corps at 1111 20th St., NW, Washington, DC 20526 or call 1-800-424-8580 or 1-202-692-1845.


3 Volunteers In Service to America (VISTA). By volunteering for a private, non-profit group that helps to eradicate hunger, homelessness, poverty and illiteracy, and providing 1700 hours of service, volunteers can receive $4725. Learn more by calling 1-800-942-2677 or 1-202-606-5000.


4 Military Service. Students who are members of the Army National Guard may be eligible for their Student Loan Repayment Program, which offers assistance up to $10,000.


5 Teaching. By teaching in a low income school district, teachers that serve in an elementary or secondary school can have a portion of their Perkins Loan forgiven under The National Defense Education Act. This program forgives 15% of your loan for the first and second years of teaching service, 20% for the third and fourth, and 30% for the fifth. Learn more about canceling your Perkins loan here: Student Aid on the Web Additional programs are available, including deferment and partial cancellation of Stafford Loans. View programs by state: AFT - A Union of Professionals - Tools For Teachers


6 Child Care. If you are a child care provider, it may be possible to have a portion of your FFEL or direct Stafford Loan forgiven. Learn more here: Student Aid on the Web (http://studentaid.ed.gov/PORTALSWebApp/students/english/childcare.jsp?tab=repaying - broken link)


7 Legal Service. Some law schools may forgive the loans of students who serve in public interest or non-profit positions. To learn more, contact Equal Justice Works (formerly the National Association for Public Interest Law) at 2120 L Street, NW, Suite 450, Washington, DC 20037-1541 (phone 1-202-466-3686 or fax 1-202-429-9766).


8 Medical Service. The US Department of Health and Human Services offers loan forgiveness programs through the National Health Service Corps and the Nursing Education Loan Repayment Program. These programs offer loan forgiveness to physicians and registered nurses who agree to practice for a set number of years in areas that lack adequate medical care (including remote and/or economically depressed regions). Furthermore, The US National Institutes of Health's NIH Loan Repayment Programs can repay up to $35,000/year of student loan debt for US citizens who are conducting clinical medical research. Finally, some hospitals and private health care facilities use loan forgiveness as a tool to recruit occupational and physical therapists. Contact the American Physical Therapy Association (1111 North Fairfax St., Alexandria, VA 22314-1488; 1-800-999-2782) for more information.


9 Government Employee. The Federal Student Loan Repayment Program allows federal agencies (FBI, etc.) to establish loan forgiveness programs to help recruit employees. This is technically a loan repayment program and not a loan forgiveness program, as your employer will make payments directly to the loan holder and the payments represent taxable income to the employee. The agencies can repay up to $10,000 in Federal student loans per employee per calendar year, with a cumulative maximum of $60,000 per employee. Employees must agree to work for the agency for at least 3 years. For more information, see Student Loan Repayment FAQ here: U.S. Office of Personnel Management



Read more: How to Get Out of Paying Your Student Loans | eHow.com How to Get Out of Paying Your Student Loans | eHow.com

[andywire]

Originally Posted by cpg35223

What about your local community bank or credit union? Those guys do not have the deep pockets that a Citi has, so their exposure is quite high on just about every loan.

Interesting. About 7 years ago, I was accepted to a very good, and very expensive university. I went to many of my local banks looking to get a loan. Couldn't get one. My parents even had me keep a small account opened with a local community bank that traditionally offered some of the best rates for student loans. No dice, they stopped offering them. Makes sense why this happened. I ended up ditching the idea and attended a local community college for a couple years while working full time, and eventually decided to stick with the work I had instead of pursuing higher education. Looking back, I think I made the right decision.

Tuition is to darn expensive. The risk vs reward must be allowed to have an impact on the price of the service offered. These days, I think the price is out of proportion with the risk vs reward. Student loans artificially keep tuition rates higher than they should be, and skew the principles of supply and demand, risk vs reward. etc. Having said that, the buyer is the one who should be held accountable for paying for their decision. I don't believe in bailouts for people or entities who make foolish decisions.