Burden of College Loans

<p>kayf…It’s certainly a possibility, but what difference does it make to the current situation? All a bailout will do is absolve foolish people who overextended of the responsibilities they knowingly and willingly took on. Rewarding bad behavior…again.</p>

<p>It will once again put an additional burden (punishment) on common sense, intelligent taxpayer who live within their means and still manage to get all their bills paid, mortgage kept up, and get their kids through college. I guess those folks are all just suckers for not taking huge sums of money and waiting for the inevitable bailout…again.</p>

<p>It will not bring the COA at universities down one penny. The universities already have the money from these morons and will continue to look for more suckers to pay much more than the product they’re offering is possibly costing them. The cycle will continue.</p>

<p>The only saving grace will be the political backlash if this happens.</p>

<p>Wolverine…I agree with you re: packaging of loans as FA. I don’t consider anything we have to pay for “aid”!!! My other big peeve is the interest rates for PLUS loans, especially compared to current interest rates the past couple of years. </p>

<p>I’m also 100% on personal responsibility ( and should also apply to corporate responsibility). No more bail-outs for bad behaviour!</p>

<p>Wolverine, I think the excessive loans have to be stopped now, and just say no isnt doing it. I disagree, I think changes in bankruptcy loans will change the banks lending policy, and when there is no place to borrow, the students will not go the uber expensive schools. </p>

<p>Roslyn, its one thing for medical students, who actually have opportunity for public service jobs. Right now undergrad kids are fighting over those jobs.</p>

<p>kayf…It’s possible, but it still doesn’t address at least 2 problems. For starters, if banks aren’t lending money to students how do you propose the vast majority of students afford to attend professional schools (law, medical, pharmacy, veterinary, etc.)? There is very little aid available to student attending professional schools as opposed to grad school opportunities, so historically the majority of students attending these schools pay for them through loans. Their higher future earning capabilities made them better candidates for high dollar loans.</p>

<p>If you make student loans dischargeable again, how do you propose to prevent the exact same abuse of the lending system that led to bankruptcy laws changing in the first place? It’s been proven time and time again that if there’s a way to scam the system, there will always be unscrupulous people who will take advantage of it. Monkey see, monkey do…if they’re getting away with it then why aren’t I getting mine? And we’re right back in the same situation that led to the changes over the last few decades.</p>

<p>Why are you so opposed to holding people responsible for their own actions? If you want excessive loans stopped now, who has the power to do that? It’s individual choice…and choices come with consequences. Show me one person who was FORCED to take out these loans.</p>

<p>Wolverine, the amount of Stafford loans that professional students can take out is staggering. </p>

<p>I would suggest that changing the BK law would reduce excessive lending. I have said that again and again. I want people held responsible, but also banks. Apparently you want to take care of banks.</p>

<p>Not at all kayf. I am no fan of banking practices, but they’ve been around since Biblical times. Not kidding…I’ve read the book. :)</p>

<p>Where do you intend to draw the line with banks lending money? Do we need to hold the banks responsible for making sure people don’t spend too much on a car? What’s the cutoff dollar amount?</p>

<p>You say you want banks held responsible, and there are already plenty of checks and balances in place to prevent UNFAIR lending practices. But that is NOT what we’re talking about here. I’ll tell you again and again…none of these loans were a matter of life and death and none of these loans were forced on the borrowers.</p>

<p>Just because someone has an opportunity to do something stupid, they don’t HAVE to take it. I’ve been middle-class/working class my entire life. I’ve never made a six-figure salary and never will. We’ve been able to get by with those salaries and managed to put away enough money to have college options for our children. I’ve rarely exceeded putting more than 10% of our available credit limit on a card and pay off the balance at the end of each month. When we bought our home the mortgage company told us we qualified for at least double what we were going to borrow…but we didn’t take it. There are always chances to be stupid…but not everyone chooses them. It’s not like I think we’re any smarter than anyone else should be…and if we did something stupid I’d take responsibility for it. I wouldn’t cry that the nasty bank made me do it.</p>

<p>Wolverine, the cutoff is if a bank thinks it needs debt to not be dischargeable in BK EVER. Not in 10 years, not in 20 years, not when the borrower is on social security, it is loaning too much. And they know it. And they are laughing at the rest of us. Cuz if anyone thinks there wont be a student loan bailout, would you please share what you’re smoking.</p>

<p>kayf…You continue to stress that the problem is “loaning too much” when the base problem is “borrowing too much”. We’re obviously never going to agree on that point.</p>

<p>Please tell me this. If these people, like probably 90% plus of the people who have ever taken out student loans, had borrowed within their means…why would it ever matter whether they were dischargeable or not? Responsible people have nothing to fear from non-dischargeable loans, especially given the “outs” available to them vis-a-vis public service, etc.</p>

<p>As to whether or not a bailout is coming, we’ll just have to see. You think it’s inevitable, and Lord knows I don’t want to give the government any more credit than they deserve, but I think (hope) there’s a good chance it won’t happen. Not because there won’t be plenty of bleeding hearts out there wanting to absolve folks of their poor decisions, but because even the slimiest politician has their own survival and best interests at heart. The vast majority of people in this country are sick and tired of footing the bill for other’s greediness and irresponsibility, and I don’t think the politicians have the stomach to deal with the fallout. One man’s opinion…I could be wrong.</p>

<p>Wolverine, it wont matter to the borrowers. It will matter to the lenders if BK rules are changed. You need two to tango (actually 3, student, bank, college).</p>

<p>You cant go wrong by underestimating govt.</p>

<p>kay…I worked for the government for 20 years. Trust me…I’m intimately familiar with their ability to do the wrong thing. Just hoping that the change in public sentiment as of late will continue. A guy has to have dreams right?</p>

<p>If the student loan system and corresponding bankruptcy laws would be fixed by going back to the old way…why did they ever need to be changed in the first place?</p>

<p>Wolverine, you’ve apparently missed the slick TV ads for private student loans - there were a boatload of them just before the housing crash. Then credit tightened up while everyone was chastised for bad behavior and banks were bailed out while individuals were not and the TV ads (that appeared to be from student lenders no one ever heard of but were in fact subsidiary programs of the major banks) disappeared.</p>

<p>I saw a new TV ad for private college loans yesterday. It made getting $25,000 a year for college sound easy as pie…</p>

<p>How about the compromise is we make student loans dischargable for professional schools but only if the student demonstrates they can’t pay back like their license got revoked due to malpractice or something? This way, students who demonstrates promise to pay back like ones who is attending medical school can take out large loans without risk because if their license gets revoked then they can just file for bankruptcy?</p>

<p>Wolverine, becuz the banks lobbied big time. They.want.more.money.</p>

<p>bchan1…I can’t say as I’ve seen one yet, but I’ll certainly keep an eye out for them. I did see some ads that tell me I can lose 20 lbs in a week without exercise or diet and another that says I can drop 8 strokes off my horrific golf score by ordering a DVD. Are you telling me those aren’t truthful? Now I am depressed… :)</p>

<p>Chaos, that is already the law. for any loan. You cant get bankruptcy just becuz you want it. You have to show there is no expectation of you paying it.</p>

<p>But as of right now, you can’t get your student loans discharged even if you demonstrate you cannot pay back, right? This applies to both undergraduate and Professional / Graduate School loans.</p>

<p>kayf…Of course they want more money, as does every business in the country. But you gloss over the real reason they lobbied for the change…unscrupulous, irresponsbile borrowers filing bankruptcies of convenience. You make it sound as if they lobbied for change out of the blue just to make more money. C’mon…you know better than that. But I’ll ask you again…what do responsible borrowers care whether the loans are dischargeable or not? I’ve been borrowing money for various purposes for 3 decades, and oddly enough I’ve never lost one minute of sleep worrying about whether they were dischargeable or not, because I knew I had the capability and the morals to pay it back.</p>

<p>You make it sound as if they lobbied for change out of the blue just to make more money.</p>

<p>uh, Yep thats what I think.</p>

<p>chaos…That is correct. It applies to both undergrad and professional school loans, government or private.</p>

<p>kayf…Then why did the rules for government loans change 7 years earlier than private loans? Were they just out to make more money as well, or were they tired of getting screwed out of the money they had loaned?</p>