<p>kayf, I should have said for US Dep’t of Ed loans, not private loans. SO many of the private lenders are predatory, if only in the sense of making the money available to people with no financial sense at all. BUT that does NOT absolve the lendee, as Wolverine has alluded to. Whether your brain hasn’t matured enough at 18 to understand the meaning of massive, crushing debt doesn’t mean that you can’t still be stupid. </p>
<p>This theory could also be applied to the subprime mortgage mess that is still unraveling itself.</p>
<p>It depends on your definition of “holding the least educated people responsible”. I understand that not everyone has the financial means to send their child to whichever university happens to be their “dream school”…but exactly who held a gun to their head and forced them to take out impossible amounts of loans to send their kid to University X? I can’t have a lot of sympathy for people like that. Mom and Dad taught me a long time ago to believe in the old standard sayings…</p>
<p>“If something seems to be too good to be true…it probably is”</p>
<p>“You can’t afford champagne tastes on a beer budget”</p>
<p>“Learn to recognize fluff over substance”</p>
<p>I have raised my children to recognize the importance of personal responsibility and common sense, and to not get too caught up in the hype of anything (clothes, cars, colleges, etc. etc.). There’s bound to be some of that in anyone’s life, but it’s the parent’s responsibility to keep their kids well-grounded and prepared for the realities of the world. If the parents ALLOW themselves and their child to mortgage their financial futures for the PERCEIVED necessity of attending Univeristy X over “affordable” University Y who else should be held responsible? These are choices they made…and if they were uninformed choices then shame on them.</p>
<p>Wolverine, not everyone was fortunate to have the parents you did. Has it occured to you, that we, as a society, will end up paying for this problem one way or another, while the bank presidents are LAO at us in their retirement. My kid isn’t going to borrow, but what do you think is going to happen with all these people who do borrow and who cant pay? I see a taxpayer bailout coming. The time to stop predatory lending is now. We need to encourage responsible lending.</p>
<p>*jnm, mortgages are dischargeable in Bankuptcy. So yes, I think the theory should be the same for private student loans. *</p>
<p>A mortgage is a secured loan…the property is the collateral. A person defaults and the bank gets the property back to resell to recoup some of the loss. So bankruptcy for mortgages is very different.</p>
<p>With student loans, there is no collateral. A person defaults, but he still keeps the degree and the bank gets nothing. Quite a big difference…unless the bank would have the satisfaction of having the person’s degree rescinded (just kidding - but hey - maybe that would prevent many from defaulting.).</p>
<p>kayf…It’s not like I love big banking and their practices, but they are what they are (hence the Scorpion reference). But “predatory” lenders are only predatory if they have “prey”. My whole point is that people insist on sending their children to schools they cannot possibly afford because someone has convinced them their child cannot possibly succeed in life if they don’t…which is a load of crap. I attended what most CC’ers would call a 3rd or 4th tier school (at best) because it’s what my parents could afford to send me to…and that’s on top of an ROTC scholarship. The education I received was more than adequate to allow me to succeed in life, at least by my definition of “success”. Even with the out of control state of college costs there are options that nearly every family has with Pell Grants, etc. to get their children higher education. It may not be a “name” institution, but that reminds me of another saying (Thanks again Mom and Dad)…“The value isn’t in the name…it’s in the product”.</p>
<p>I wholeheartedly agree that mortgages are not the same as student loans. Nobody wants to lose their house. But if they borrow more than necessary (living expenses, etc.) on student loans and default there is NO penalty. It would encourage more unnecessary borrowing.</p>
<p>On credit card debt the interest rates are much higher than on student loans, and the amount someone can borrow is much lower, until they have a good credit history.</p>
<p>I find it hard to believe anybody could have $250,000 of credit card debt. Or at least it’s rare. Offer people that much for college and let them know they can discharge it at graduation and see what happens.</p>
<p>WhydoIcare – I would submit that even if rates went up and amounts went down on student loans, our society would be better off. Kids should not be taken out massive amounts of private debt. Anything in essense of a stafford loan – its time to think long and hard.</p>
<p>But really, as a society, let’s stare reality in its face
the problem is that the system is inherently unsustainable because more and more people keep goin to school for far fewer jobs; the epitome of credential inflation imo</p>
<p>maybe higher ed shouldnt hold such a monopoly on credentialling(if thats a word)</p>
<p>we have 17million college grads underemployed; most of which have debt to their nostrils
we need a REVOLUTION</p>
<p>Seriously. THAT’S THE POINT. Banks wouldn’t offer quarter-million-dollar loans to college kids if they could be discharged.</p>
<p>THAT. IS. A. GOOD. THING. </p>
<p>I have no clue why the people talking about “responsibility” can’t see that.</p>
<p>Unless you truly think a kid who committed the heinous crime of having financially-illiterate parents should be punished by a lifetime of soul-crushing debt. In which case, you’re a heartless Scrooge.</p>
<p>polarscribe…I’m shocked that you’d disagree with me…that happens so infrequently. Of course you wouldn’t expect anyone to have any personal RESPONSIBILITY whatsoever in the whole lending process. It’s obviously just the big bad banks that snuck into these people’s home and threatened violence to force these people to take out huge loans. Your whole argument is that banks wouldn’t give these loans if they could be discharged. That’s probably a true statement, but as at least one previous poster mentioned there was huge amounts of IRRESPONSIBILITY among loan takers simply because they knew they could take money they wouldn’t need to pay back. All they have to do is declare bankruptcy and they’ve gotten a free college education. That was exactly why the laws were changed to not allow student loans to be discharged, because unfortunately you can’t fix stupid people and you can’t force morals and ethics and RESPONSIBILITY onto those that don’t want it or believe in it. Are banks responsible and trustworthy institutions? HELL NO!! But if you lie down with dogs you’re bound to get fleas…so don’t blame the dog blame the idiot that laid down next to it. NONE of these unpayable loans could or would have ever been issued if the parents/students didn’t sign the paperwork. NONE of those students needed to go to that particular university…if they were accepted to a university that charges that much money they would’ve also been accepted to a more affordable option. They WANTED to go there, and made a ridiculously IRRESPONSIBLE choice and yes…tragic as it is…they should have to live with the consequences of that choice. Scrooge out.</p>
<p>Woaa, Wolverine, I am not certain that Polar said that kids should have NO responsiblity. Its just at present the punishment is too severe for the crime. </p>
<p>Please seperate govt and private loans when you discuss issue. The abuse was of govt loans. These loans are generally fair, and borrowers were abusing bankruptcy. That issue has been dealt with decades ago. Put it to bed.</p>
<p>Wait let’s recap. So back then when loans were dischargable after bankruptcy, was this for private loans and government loans or just private loans? Now I understand that no type of student loans are dischargable, right?</p>
<p>kayf…No, it shouldn’t matter what the source of the loan is. If you can’t afford it…you can’t affort it regardless of who the lender is. Period. It’s the same issue that caused a large portion of the mortgage crisis. Just because someone offers you money and claims you can afford it, YOU have the final say in whether you take it or not. I don’t dispute the fact that most lending institution (gov’t or private) are complete snakes. But they’re in the business of making money…and unfortunately are able to stay in business due in large part to “easy pickings” type customers. Polarscribe wants a world where the government does away with useless programs (in his opinion this would be the military) and pays for higher education for everyone. Contrary to those that believe in a world full of entitlement, everything bad/unfortunate that happens in someone’s life is not always someone else’s fault. As I stated earlier, there is responsibility and blame at ALL levels for the current state of college costs and how they can be paid. But as I said…NONE of these people would be in the financial hole they’re in had they not done it to themselves.</p>