<p>How about if we make a revision in the current bankruptcy laws for student loans via a compromise?</p>
<p>Old Law: All types if student loans cannot be discharged after bankruptcy whether it is federal, private, undergraduate, graduate, or professional even if you demonstrate that you cannot pay back.</p>
<p>New Law: Dental and medical school students can have their loans (federal or private) discharged after bankruptcy if they demonstrate they cannot pay back their loans due to something like their license getting revoked or something (this rarely happens anyways so there isnât that much of a risk for the lender). </p>
<p>An advantage of the new law would still allow students who show promise to be able to pay back large loans to take out loans and to protect the student in case something bad happens like getting their license revoked which is still rare in the first place.</p>
<p>I agree kayfâŠwhich is why itâs even more pathetic that they had to change the laws regarding government loans well in advance of private loans. Even though they should be much more manageable to pay off, people were still scamming their way out of it.</p>
<p>chaosâŠIâm not opposed to some sort of compromise, as long as people can be held accountable.</p>
<p>Wolverine - I think one of the huge differences between those folks trying to fleece you on a golf video or quick as a wink diet aid is that in those instances you have only two players - and even those who purchase the product do so thinking something along the lines of âif it doesnât work Iâm only out $Xâ. People are far more skeptical of sales claims when they clearly know they are being âsoldâ.</p>
<p>The problem with the marketing/ethics/financial stability of the current student debt/finance system is that this 3 player game does not trigger the same fight or flight response in its audience. Everyone knows that education is a good thing (just like owning a big house is a good thing) and the seller of this product can demonstrate the gain in wages by those who hold degrees with truthful statistics, charts and graphs (just as home builders could quote statistics and reference charts and graphs on the upward climb in homeowner equity not so long ago) the banker as snake oil salesman comes in as the third party and says âhere is how you can afford thisâ - even though he knows you really canât afford it and that with this debt load you will in truth be working for him the rest of your life, but unlike the house you canât just give it back, so you really will be working for the bank as long as you live. And nobody knows their audience better than snake oil salesmen - which is why the slick TV ads for college loans (a quick 10 minute application!) are packaged in much the same way as ads for for profit schools - to prey on those least able to discern the truth of their claims.</p>
<p>But bchanâŠthese are âsupposedlyâ intelligent students and grown adult parents, all of whom have taken at least one basic math class at some point in their lives. How much snake oil do you have to lube them up with to make borrowing 2 or 3 or 4 times your best case expectation of starting salary a good idea? Iâve lived in a lot of different states around this country, and I havenât met a salesman that convincing yet. Have you?</p>
<p>Wolverine, youâre talking to another skeptic - one sometimes accused of cynicism, so the answer is no, borrowing like that never makes sense to me and obviously not to you.</p>
<p>Not all college eligible 17 year olds have good math skills - and neither do their parents, what they do have is great big beautiful (and sometimes spectacularly unrealistic) dreams. So whatâs wrong with letting the folks in the banker suits - who have the proven math skills - use those same assets and attributes to accurately calculate their risk instead of counting up their layers of protection?</p>
<p>Iâm not arguing that bankruptcy laws havenât been abused, but they are also there for a reason, to ensure that the free market system works for everyone.</p>
<p>Wolverine, the changes to the dischargeabiliyt for govt loans was made in the 1990s, BEFORE, the general change to the BK laws in 2005. The 2005 changes did two things (for purpose of this convo)-</p>
<ol>
<li><p>Made private student loans non-dischargeable (and yes, btw the only non govt loans with such treatment) and </p></li>
<li><p>Made it harder for anyone to actually claim BK and get any loans discharged (required BK judges to make certain no other way for any loans to be repaid, in a reasonable period of time)</p></li>
</ol>
<p>Had the second charge been made earlier, the change to govt student loans might not have been necessary.</p>
<p>kayfâŠUmmm, didnât you just make my point for me? I know the change to government loans was made first, which is probably why the irresponsible borrowers shifted to private loans. Once they were really able to start borrowing serious money from private institutions and dumping responsbility after graduation, those laws needed to be changed as well to close the new loophole.</p>
<p>As I mentioned before, I think these are (and should) be treated differently because there is no collateral that can be repoâd if the borrower defaults. They can default with no penalty and no recourse for the lender. If your looking for fairness in everything, where is the fairness in that?</p>
<p>If the âsecond change were made earlierâ weâd already be in the same situation weâre in now. Did I miss something, since Iâm in favor of how things are now?</p>
<p>Hereâs a compromise for you. Since the universities think their product is so much better than anyone elseâs and itâs worth what theyâre asking for, how about they put a guarantee on it? If a degree from our fine university doesnât net you a job capable of making the loan payments you needed to attend here, weâll eat the cost of your degree! If theyâre convincing the students that they âneedâ to attend, they ought to back it up. :)</p>
<p>SadlyâŠdidnât somebody sue a university recently for something like this?</p>
<p>bchanâŠOk. letâs play devilâs advocate. Letâs assume the bankruptcy laws are changed back to the pre-1998 status and all student loans are dischargeable, and you put the onus on the lenders to assume all the risk if they give money to students. How long do you think it would be before someone (regardless of skin color, sex, race, religion, etc.) that gets turned down for a loan runs screaming to the ACLU because theyâre being denied their ârightâ to attend any university they can get accepted at? </p>
<p>Never mind that regardless of their income level they would be probably be eligible for government loans in sufficient amounts to allow them to commute to any nearby community college or local/state university. No noâŠthese âspecialâ kids are destined to be the next multi-billionaire if only those lenders werenât biased against them. Now whatâs your plan? Forcing the banks to make risky loans they would never make otherwise? If so, Iâd have to call you Barney FrankâŠand Iâve seen that movie already.</p>
<p>BTW, Iâm not only a cynic and a skepticâŠIâm pretty well versed in sarcasm as well. :)</p>
<p>Wolverine - youâve brought in an entirely new/different argument. The government insistance on ill conceived loans for the ârightâ to home ownership was silly; just as protecting the bank and sacrificing the 17 year old is silly.</p>
<p>If the banks thought these silly loans were too risky for them (because the 17 year old might bail later on) they would not make the loan, the kid could not go to that particular school and the school would be faced with choices about how to avoid becoming a rich (and not necessarily white)country club. The system would find a new balance that didnât rest the weight of the world on the shoulders of a 17 year old.</p>
<p>I believe in the free market - not the protected market for banking conglomerates.</p>
<p>bchan1âŠWell Lord knows something has got to change somewhere to get these costs under control. Reasonable people (any even me ) ought to be able to find a common sense solution that will bring education costs down to somewhere near what theyâre actually worth, provide a borrowing/lending vehicle that protects the consumer but holds them accountable for their decisions, and ensures students of all socio-economic backgrounds can achieve their goal of higher education.</p>
<p>The free market system is always going to mean that not everyone is going to be able to attend an elite school, nor should everyone want to. My D1 will be attending an OOS public state U and will graduate debt free due to the generous merit scholarships they offered. But despite her outstanding stats we wouldâve had her commuting to a local U if that were the only option that fit our budgetâŠand wouldâve been just as convinced of her ability to succeed there and in the future. Hopefully more folks will educate themselves about the true value of the education their children needâŠwithout having to learn harsh lessons in the process.</p>
<p>Maybe you, kayf, and I should volunteer to serve as a Dept of Ed oversight committee. Between the three of us we can get this mess cleaned up in no time. I donât think the universities, the banks, or Congress will like us very muchâŠbut thatâs probably not a bad thing.</p>
<p>âthese are âsupposedlyâ intelligent students and grown adult parents, all of whom have taken at least one basic math class at some point in their lives.â</p>
<p>Woverine86, do you honestly believe that any math class is going to make a difference here? We have just seen the world economy smashed by the combination of emotional buying (of houses) and mathematical geniuses (in the investment firms) who took too much calculus and too little consumer math. Being smart doesnât mean that you are wise. Taking math classes doesnât mean you can balance a checkbook or interpret a loan document. Buying a college education is an emotional purchase. If we were thinking clearly, few people would go to college. They would be hunting down work opportunities where someone else would pay them to learn the skills that they need. We would have a nation of paid apprentices rather than a nation of paying students.</p>
<p>UVA and UNC-Chapel Hill guarantee to meet full need for accepted students. I believe they are the only public universities that do do. They both require the CSS Profile in addition to the FAFSA.</p>
<p>They are the only ones that I know give the guarantee to all accepted students. There are a number of situations where an OOS school will meet full need, nearly all such schools have such circumstances, but the guarantee is rare even among privates, especially any school that also has need blind admissions.</p>
<p>Wolv, what will get these costs under control is when enough people stop paying them. When loans dry up and people have to come up with their own money or borrow with standard credit worthiness, is when that will happen. Right now these colleges are going on borrowed money.</p>
<p>happymomâŠI agree that the college searche and selection process is an emotional one, and we were just as emotional and at times irrational as every other family at times. But my whole point is that isnât an excuse for common sense not to prevail when it comes to deciding if/how much borrowing is necessary to make higher education possible. If you read back through my posts, I am anything but a fan of the university pricing scheme or the banks. My basic point remains that I cannot excuse the irresponsible borrowing behavior of these families, nor do I excuse the behavior of banks that lend them more than they should or universities that charge excessive amounts for their âproductâ. </p>
<p>Slick marketing practices bordering on (and often crossing the line to) outright lies are commonplace in every facet of society. Why are we supposed to feel sorry for (and potentially end up paying for a bailout of) these families? Every family, except possibly those making large six-figure salaries, has had to face the possibility of student loans in the college process and a huge number of them have had to borrow in order to make college doable. These are families of all income levels and socio-economic backgrounds and the vast majority of them made smart decisions when faced with borderline untenable circumstances to get their kids through college. Why should we buy into the sob story of the small percentage (but high dollar amount unfortunately) that CHOSE toâŠnot were forced toâŠmake a foolish choice?</p>
<p>Emotion is a wonderful thing and should have a place in the college process, but it doesnât replace common sense and it doesnât excuse the lack of it. Are you still gonna feel sorry for these families if a bailout does come (still hoping it doesnât happen) and youâre footing the bill for somebody elseâs kids on top of your own? I donât blame 17-18 year old kids, although Iâd hope they could be a little more pragmatic. I blame a decline in basic parenting skills overall in this countryâŠand this is just the latest high profile example of it.</p>
<p>cptâŠI agree with you, itâs just how we reach the point where people stop paying them. Some want to blame the banks and/or government for giving the money to these folks, whereas I choose to put the onus (but not all the blame by any stretch) on the families. I am surrounded every day by multiple opportunities to make poor decisions, and whether I take them or not is MY responsibility. </p>
<p>In previous posts I talked about âvoting with your walletâ with these universities. I prefer to see personal responsibility/smart choices stop the flow of money to the universities, while others think the sources of money should be blamed/stopped. Both will work, but both come with pros/cons. My opinion is just thatâŠbut donât ask me to feel sorry for those that chose poorly and donât use my tax dollars to bail them out from their stupidity.</p>
<p>Of course the families are to blame, but I blame the banks and the system as well. I blame the thief for stealing the money, but someone who puts it right there ripe for the picking is a fool as well. And when a system gets so many defaults, just blaming the primary culprits doesnât help all of us. A bailout of sorts becomes essential or âwe all fall downâ. Thatâs what happened with the mortgage situation. </p>
<p>When the problem reaches a crisis situation where everyone or too many get in trouble and other things are endangered, of course your tax dollars as well as all of ours is going to be used because the alternative is more dangerous.</p>
) ought to be able to find a common sense solution that will bring education costs down to somewhere near what theyâre actually worth, provide a borrowing/lending vehicle that protects the consumer but holds them accountable for their decisions, and ensures students of all socio-economic backgrounds can achieve their goal of higher education.</p>