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The U.S. Education Department said it will forgive $150 million in federal student loans as part of a 2016 rule that Secretary Betsy DeVos previously tried to block.
Department officials began notifying 15,000 students on Friday that their loans will automatically be erased because they attended colleges that closed while they were still in school or shortly after they finished. About half of them attended campuses under the for-profit Corinthian Colleges chain, which collapsed in 2015 amid widespread accusations of fraud.
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Sen. Patty Murray, the top Democrat on the Senate committee that oversees education, said she was "pleased" that the department has started implementing the rule.
"This is a good first step, but it's not good enough — and I call on Secretary DeVos to abandon her attempts to rewrite the borrower defense rule to let for-profit colleges off the hook, and instead fully implement the current rule and provide relief to more than 100,000 borrowers who were cheated out of their education and savings," Murray said.
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But DeVos said the rules made it too easy for students to shirk their debt, and left taxpayers on the hook.
The Senator has a point that it's not right that the students were cheated... but not at the tax payers expense.
What would happen if this was a private sector issue and the government was not involved... and banks were involved in student loans instead of the government? Do you think loans would be forgiven by the banks? Heck no.
The sad part is that at this point, it probably more prudent to just forgive loans. The problem is that the government and my tax money should not function as a quasi-bank for student loans. It's ridiculous.
If states had not abdicated their historical responsibility to fund education for their residents, we would not be seeing these staggering student loans. The debt load is keeping an entire generation of Americans from participating in the economy as past youthful generations have. We already are seeing the results in stagnating home and auto sales and reduced consumer spending from this group. Effects will multiply going forward to the detriment of all. Taxpayers will end up footing an even larger bill for loan forgiveness (and that will be given to the banker class) in place of education taxes avoided by underfunding college and technical education. It's time to rethink.
If states had not abdicated their historical responsibility to fund education for their residents, we would not be seeing these staggering student loans. The debt load is keeping an entire generation of Americans from participating in the economy as past youthful generations have. We already are seeing the results in stagnating home and auto sales and reduced consumer spending from this group. Effects will multiply going forward to the detriment of all. Taxpayers will end up footing an even larger bill for loan forgiveness (and that will be given to the banker class) in place of education taxes avoided by underfunding college and technical education. It's time to rethink.
How about families being responsible for their own education?
One of the reasons that college costs have skyrocketed is because the government is the main customer... and because the government has deep pockets and is a motivated purchaser, college can charge extravagant prices.
If families were the main consumer, colleges could not charge as much as they do know because a small amount of people could afford it.
Wait, lemme get one of them loans first. Yeah, total bs
This whole thing is a financial IED waiting to explode on somebody's watch.
12-18-2018, 08:55 AM
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n/a posts
If it were private sector, those loans would have probably been written off years ago.
I don't really have a problem with this. What I do have a problem with is the fact that those schools were allowed to participate in the federal student loan program to begin with.
What I have an even bigger problem with is that the Trump administration if trying to roll back the gainful employment rule so diploma mills can go back to using the federal student loan system as a piggy bank.
What they're trying to do is straight up evil. They are simultaneously trying to make it easy for for-profit garbage schools to access federal money and to make it virtually impossible for the suckers in the middle (the students) to escape the debt.
If it were private sector, those loans would have probably been written off years ago.
I don't really have a problem with this. What I do have a problem with is the fact that those schools were allowed to participate in the federal student loan program to begin with.
What I have an even bigger problem with is that the Trump administration if trying to roll back the gainful employment rule so diploma mills can go back to using the federal student loan system as a piggy bank.
What they're trying to do is straight up evil. They are simultaneously trying to make it easy for for-profit garbage schools to access federal money and to make it virtually impossible for the suckers in the middle (the students) to escape the debt.
The bolded is my biggest issue with student lending in general. Any business could fold and it would not matter because they could write off any amount of debt.
Students get sick or have their college close before they finish and they need to all but become paraplegics to get a break on a student loan. Hell, it's easier to get out form under every kind of debt except tax debt and student loans. Tax debt is easier come to think of it.
I believe any wise student having trouble should open a business, take out business lines of credit, pay off their student loans, then file bankruptcy for the business. Not a sole proprietorship, either. You'd need to incorporate. And, that is not that hard to do.
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The Senator has a point that it's not right that the students were cheated... but not at the tax payers expense.
What would happen if this was a private sector issue and the government was not involved... and banks were involved in student loans instead of the government? Do you think loans would be forgiven by the banks? Heck no.
They would be dischargeable in a bankruptcy under fraud rules, and basic contract law says that where fraud is involved, the contract is void.
At most, a judge might compel students to pay back that part of the loan that wasn't expressly used for tuition, so if a student borrowed $30,000 to pay for $10,000 in tuition, and many of them do exactly that, they'd have to pay back $20,000.
How about families being responsible for their own education?
One of the reasons that college costs have skyrocketed is because the government is the main customer... and because the government has deep pockets and is a motivated purchaser, college can charge extravagant prices.
If families were the main consumer, colleges could not charge as much as they do know because a small amount of people could afford it.
Agree and to the bold: if they were you'd see education become more affordable and more focused/useful.
Best and first reason is income redistribution is immoral and leads to a whole host of unintended consequences. Gay and lesbian studies on the taxpayer dime?
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