<p>Hopefully, congress will undo the 2005 Act, and allow private loans to be dischargeable in bankruptcy.</p>
<p>Student</a> Loan Bankruptcy Fears Drive Congress to Rethink Law - WSJ.com</p>
<p>Hopefully?
If you default on the payment of other assets like a home, that property can be sold. How do you repossess a college education?
I think allowing students to default on loans will pave way for more foolish decisions. ( and increased interest rates)</p>
<p>I agree with emeraldkity4.</p>
<p>I am not an expert, by any means, but isn’t the idea that if loans were dischargable in bankruptcy, the private lenders would stop giving these huge loans to kids?</p>
<p>To me, another huge problem is that people have these ideas about income as if all of their income can go to pay debt. They don’t realize that you have living expenses once mom and dad are not footing the bill.</p>
<p>Thinking outside the box on the issue of Student Loans is desirable…and with THAT said…
Having Student Loans be able to be discharged through bankruptcy is not the way to solving the issue, in my opinion.
The cost of attending higher education is now at a level where ROI is a question that each individual must consider. Then, if determined to be a viable option, recognize the responsibility to pay that loan back.
Of course…on a lighter note…one of the candidates for President recently suggested students could just ask their parents for a loan…Seriously, that is what he suggested.!!!</p>
<p>The article does not mention how commonly private student loans were discharged in bankruptcy before the 2005 law. Seems that bit of information would be necessary before any opinion could be formed. </p>
<p>Yes, private lenders would get a whole lot more particular about who they loaned to. And yes, people would file bankruptcy, keep the product they purchasesd (an educaiton) and walk away scott free. </p>
<p>Doesn’t look like a slam dunk either way.</p>
<p>And I bet if my daddy were running for president, he would loan me the money. Lol</p>
<p>Well, who would have thought one of the serious candidates would have a 9-9-9 platform and end up with just too many sexual harassment lawsuits to keep center stage? It’s sure a crazy country we live in!</p>
<p>There was also a brief note recently in the news about how debtors prisons are making a revival where people refuse to make payment though they have the resources and are imprisoned.</p>
<p>Sometimes, I feel the FA offices of SOME colleges teamed with private lenders are like loan sharks.</p>
<p>On the other hand, politicians are the only ones who have the tendancy and the power to manipulate the market in such a way that, if any “have-not” sinks, they want to make sure all the “have” sink at the same time, because they got the votes from the “have-not.”</p>
<p>Until 2005, private student loans were not dischargeable in bankruptcy. Plenty of kids went to college then. I think that was better.</p>
<p>Dont kid yourself, when these kid dont pay, either the banks or the taxpayers will pay. I would rather the banks either take it on the chin, or start lending more responsiblity.</p>
<p>Remember, to declare bankruptcy, you have to be bankrupt. What will happen is that banks will require co-signers for student loans who are less likely to become bankrupt. Students will not be able to borrow much money themselves.</p>
<p>Post #2 is correct. How about people who paid in full out of their pockets? It appears that, they will be punished, but nothing new here, right? That is general direction, redistribution (and what that other word, that I will not dare to mention because of aproar that will follow). I hope that co-signing is a must and in case of no co-signing, student loans still have to be re-paid.</p>
<p>If one takes a loan, one should pay it back. It’s a shame there has not been a better understanding of the math behind loans. We are all responsible for our debts. I agree that the banks have loaned too freely, but nobody forced any of us to borrow. I hope that raised awareness of the problem of large student debt will lead to wiser financial choices and perhaps even a reduction in the coast of education. I am sympathetic (I had a ton of student debt), but believe in personal responsibility.</p>
<p>The problem facing the lenders is that the vast majority of students who take out significant loans are technically bankrupt when they graduate. While relatively few new grads might file for bankruptcy the day after they got their diploma, it’s easy to imagine lots struggling for a few years and giving up.</p>
<p>Banks don’t lend money as a public service or to help individuals, however worthy. They make loans when they expect to be paid back with interest. Riskier loans tend to come with much higher interest rates (to cover more defaults), lower total amounts, and requirements for co-signers, pledged assets, etc.</p>
<p>I beleive in personal responsiblity too, but if there is going to be a bailout, it should be on the banks, who made money off of student loans, not taxpayers.</p>
<p>Mcat, they were. A few years ago the scandal erupted where colleges were brokering such loans for kick backs. It’s specifically forbidden now because of that. But they’d still be loan sharking merrily if the expose had not occurred, And many of the big name schools were involved in this.</p>
<p>Somewhat tangent to the discussion here:</p>
<p>Starting this year, FAFSA on the Web requires all FAFSA applicants to use IRS Data Retrieval Tool to fill in the data on their FAFSA applications. And any items on the FAFSA should not be off by $25 from the same items recorded in IRS’s database (in the last year, the tolerance was about $400) if an applicant/parent filled in some income/etc data manually instead of using IRS Data Retrieval Tool.</p>
<p>We got burned by this by not paying attention to this. We filed FAFSA application well too early (in January) this year, and the official IRS Data Retrieval Tool was available sometime in February. So the tool was available after we had completed DS’s FAFSA application. Now we are notified by the school to use IRS Data Retrieval Tool. (The school was actually mandated by the Department of Education to not trust any data on our Tax Return (paper version) that we mailed to the school starting this year.) </p>
<p>I think this is like making a FAFSA CORRECTION. And I am worried that the school will receive the updated SAR too late and all the money will be gone by the time the school receives the CORRECTED SAR from FAFSA.</p>
<p>How long would it take before the school would receive the updated SAR assuming that I have already filed FAFSA CORRECTION just yesterday?</p>
<p>Sometimes what seems “fair” and “just” conflicts with what is economically best for the country. Students drowning in debt can’t enter entrepreneurial occupations where they might do more good for the country. They can’t enter lower-paying occupations like teaching. They can’t buy houses. They can’t buy cars. They can’t spend - period. </p>
<p>If Donald Trump can go bankrupt three times…</p>
<p>
Well said. But we also need to make sure the country is really the country, not the few elites who have more power to influence the direction of the country, and also not those “have-not” who just want to pull down the “have” to the same level as the “have-not” in order to be fair.</p>
<p>The upward mobility appears to be relativlely lacking in the “lost decade”. When many students with a CS degree work in the technical field for 3-5 years only and then for the rest of his career he becomes a semi-technical person who manages an overseas team of 8 engineers who are much cheaper to the business, something seems not very right…Like one person who told me before: The only solution is to work with a salary that is as low as that of the overseas engineer (e.g., 25k annual salary with 10 years of experience) – so get rid of the car and its insurance cost first.</p>
<p>Private lenders being a lot more careful about giving student loans would not be a half-bad thing, imo.</p>