Seriously, go and read about Corinthian and EDMC and the rest of the for-profit bandits.
This is not a case of people “who made some bad decisions” - this is a story of predatory behavior directed at a bunch of vulnerable teenagers.
I suppose it’s not too unusual to take an “every man for himself” approach to any form of misfortune that may affect people.
Personally, I’m willing to pay taxes for the benefit of the less fortunate in society to have a safety net and a second chance when all they did was make honest (though possibly stupid) mistakes. Besides the obvious humanitarian benefit, you never know when that could be you.
Also, if they have another chance at becoming self-supporting in legitimate work, they are less likely to be a drain on society through welfare, social work, crime, police, and/or prison costs.
Hate to ruin your storyline, Nick, but most of those who attend for-profit colleges are non-traditionals, i.e., adults. And with one google search and <1.5 seconds, I found an article that said the average age of a Corinithian student was 27. In your pov, at what age does one become responsible for their own actions?
Corinthian did cater to non-traditionals, my bad.
In my defense, I’ve spent a lot of time looking at EDMC and they do rope in a lot of teens and early-twenties kids.
I will concede the point that I should not have used the word teenagers up in the post above. I don’t think this invalidates the point that these schools prey on the unsophisticated and fraudulently misrepresent the product they are selling, the true costs of the loans they sign these people up or the rest of the sad story (read about some of the online schools that charge outrageous amounts for courses and constantly change requirements and standards with the obvious goal of making people drop out before they complete their degrees.) Honestly, there is no defending these dirtbags, and certainly some of their victims deserve some relief so they can get on with their lives.
No one is defending the for-profit colleges. They have been a joke for a long time. But that still doesn’t make it the taxpayers problem. It is easy to spend other people’s money. I didn’t even bother to correct you for the teenager thing because it really doesn’t matter. Regardless of how sorry you feel for the borrowers it doesn’t make it any better to forgive their debts. The department of education/federal government, once again, manages to screw things up beyond belief. The DE shouldn’t be guaranteeing student loans in the first place. That is what drives up college costs for everyone. There are other, smarter, ways to go to college.
I realize that if the DE/Gubberment didn’t guarantee student debt some students are locked out of college (even though it didn’t stop a middle class kid like me. Why? Because I was willing to work and save. What a concept).
I didn’t make myself a victim I simply worked and saved for what I wanted and only took loans late in the game when it was clear I was going to make it. All of which is common sense. And I didn’t have a soul advising me. I would have laughed if I had to pay $600 a credit. Even at that young age I knew there were cheaper options that were just as good or better. The for profit college advertise about accepting credit for work experience and 3 week degrees. I am supposed to feel sorry for people that fall for that?
The bottom line is the Gubberment should get out of our lives on things like this. The most intelligent post on this thread is the person who pointed out that there are other ways for lenders to get security and reduce risk so even if the Gubberment wasn’t using monopoly money to help out the free markets would provide away for it to happen anyway. The Gubberment just gets in the way and screws everything up. The Gubberment is just now “cracking down” on for profit colleges that charge outrageous rates and their students rarely get jobs. What took the Gubberment so long to figure it out? There should be limits on the amount one can borrow per year public, private or for profit, for one thing, and the loans should only go to students of school that have good placement rates but even that is too much bureaucracy and red tape.
The Gubberment should have nothing to do with it. Let people work and save to go to school, like I did, or like people two generations ago did, and let private lenders make deals with private borrowers with taxpayers guaranteeing nothing. That way, if you want to go into debt to get an education, you need to make sure you are borrowing and using credit intelligently and not using someone else’s money. Like I said, that is probably just to much common sense right, Nick? We are all supposed to cry a river for some helpless teenagers who average age 27 who decided to borrow a lot money, some of which gets used for cars and cell phones, and then act all helpless later when they can’t pay it back.
@GoNoles85 did you read the article if so you can see that this is far from something the government took a long time to figure out.
I agree with you on much of what you say. We may disagree on the culprits-or at least some of them.
But don’t you see that such “dirtbags” would not exist if not prodded/enabled by the unfettered loan programs from Uncle Sugar? IMO, its easy to place blame on the big bad corporate types, but one needs to recognize that they were doing only what the feds allowed them to do.
Where is someone in DC is who being held responsible?
On this, Elizabeth Warren raises a good point – I hope she asks for hearings, instead of just making speeches:
btw: Way back when, when the feds ‘nationalized’ the loan program, I predicted on cc that they would end up forgiving all kinds of debt (and I was chastised for pure speculation)…
@46,
No, I didn’t read the article. I am against forgiving debts to the taxpayers on principle alone. I am also against the government promising lifetime benefits to any class including veterans. My dad, I was adopted but he was still my dad, served 28 years in the military. WW II generation. He got, and deserved, a pension for the rest of his life. He passed away and my mom still gets his pension and even she would tell you that isn’t right. Things like that do not make sense to me even though it benefits my family. My dad was in the military for 28 years not my mom. Hell, my dad would have told you the pension should have lasted for 28 years, one year for each year he served, not for his lifetime. My dad was old fashioned and if you didn’t work you didn’t eat kind of guy and that rubbed off on me.
If the government wasn’t guaranteeing loans what would happen is private borrowers would negotiate with lenders and could strike deals based on common sense things like how good of students they are and where they go to school. So, if you are a poor inner city kid with a great GPA and great test scores and you get into HYP or some other power school you would have no trouble getting a low interest, deferred payment loan. That would encourage kids to study hard early which is a good thing. If you are a kid who skips school, can’t read, doesn’t study, smokes weed, etc. you might not be able to get a loan which sounds fair, not wrong, to me. The free enterprise market would take care of it if the Gubberment wasn’t screwing up the invisible hand of market negotiations. It is amazing how many people think the Gubberment prints monopoly money and it is hunky-dory for them to hand it out like Halloween candy with no unintended consequences.
This is true but you’re framing it far more broadly than it really is. The [school closure cancellation](https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/closed-school) only kicks in if you don’t complete your degree anywhere else. I’m not sure how broadly courts interpret “any comparable means,” but my guess is broadly. The fraud protection is tightly limited to four cases: [ability to benefit](http://www.ifap.ed.gov/dpcletters/attachments/GEN1418AttachLoanDischargeAppFalseCertificationATB.pdf), [unauthorized signatures](http://www.ifap.ed.gov/dpcletters/attachments/GEN1418AttachLoanDischargeAppFalseCertifUnauthSigPayment.pdf), [disqualifying status](http://www.ifap.ed.gov/dpcletters/attachments/GEN1215Attach18450015FCDSFINALExp20141231.pdf), and [identity theft](http://www.ifap.ed.gov/nsldsmaterials/attachments/GA200804TechUpdate.pdf). None of those necessarily covers Corinthian, though I absolutely agree that Corinthian was predatory and there should be debt relief.
@GoNoles85: We are all terribly impressed with your drive and ability to “work and save.” It probably helped that you went to school a few decades ago when tuition was far less and jobs far more plentiful (we just had this Great Recession thing; you may have heard about it, it was in the news). I also expect that being a “middle class kid” may have offered some benefits over those who, say, weren’t. I’m just guessing but as an uneducated person being asked to use “credit intelligently” it may have helped to have financially literate parents around to pass on those skills.
@49,
It has always been tough to get a good job, brother. And my parents were not and are not (my dad is deceased) financially literate at all. My dad bought a house in 1966 for $25,000. My mom owes about $100,000 on that house today. That house should have been paid off 15 years ago.
We had recessions back when I was in school too. Something else to cry about I guess.
@GoNotes85: It actually turns out that its not always equally tough to get a job. There’s this thing called a “labor market” and it compares available workers to available jobs. When population increases, but jobs decrease (because of, e.g., a recession, automation, outsourcing) then it gets more difficult to find a job and you have greater unemployment. Unemployment is, not surprisingly, greater among those without college degrees. A lot of those people foolishly think they should “better themselves” or “get educated” or whatever. They turn to available colleges like Corinthian, which kindly and loudly told students about its [great employment numbers.](Corinthian Colleges’ for-profit model under fire – Orange County Register)
Corinthian, by the way, charged [about $15,000](Trends in Higher Education – College Board Research) in tuition. Only a [url=<a href=“http://nces.ed.gov/programs/digest/d13/tables/dt13_326.10.asp%5Dthird%5B/url”>http://nces.ed.gov/programs/digest/d13/tables/dt13_326.10.asp]third[/url] graduated within 6 years. That’s a lovely total of $90,000. Remind me how you’re going to “work and save” up to $90k on a high school education only? In the middle of a severely depressed labor market?
Two generations ago was in the midst of the great state university expansion, as state governments realized that a better educated population enabled by low cost state-subsidized universities meant more economic growth and tax revenue that would eventually more than repay the cost of the news and expanded state-subsidized universities. The national government’s GI Bill had already started to expand the college attendance rate of returning veterans, with similar effects.
A few more generations back, attending college was mostly a luxury for those from high SES families – a likely waste of talent that happened to be born into low SES families. Unfortunately, the increasing costs of college are moving society back into that direction.
@51,
That’s why I said it is has always been hard to get a “good” job. Reading is, you know, fundamental but thanks for the economics lecture that I kind of skimmed.
@52,
“Enabled by low cost state-subsidized universities.” Exactly. Low cost universities. I think you might be on to something there. If education is low cost, because it is government subsidized, everyone benefits. Fed and state governments could help subsidize the costs of running the place, that is no problem, that is one of the reasons we all pay taxes, but the government should have no role in subsidizing or guaranteeing any loans associated with paying for the tuition and fees which only services to drive up tuitions and fees artificially.
@GoNoles85: Drat, I forgot about that pesky exception to economics where “good” jobs are always equally scarce. Alternatively, you like to talk big about how you walked uphill in the snow both ways and dammit, if you didn’t have snow shoes no one should, but when pressed for actual answers you can’t give them. Unless, between that post and your next, you remembered how to save $90,000 on only a high school education?
Also, “Reading is, you know, fundamental but thanks for the economics lecture that I kind of skimmed.” may be the most unintentionally ironic statement I’ve ever seen on this board. It needs to be preserved for posterity.
@54,
What are so angry about Demo? Because I don’t think US taxpayers should bail out borrowers that borrowed recklessly? Direct your anger somewhere else. I don’t owe you any explanations. Don’t use my money to bail out the borrowers fix the system.
Good job have never been easy to get. Maybe they have for the upper class, the 1%, good for them. Maybe they walk into the corner office right out of that elite school or take over daddies business. For most other folks good jobs have never been “easy” to get.
I didn’t have to save $90,000 on a high school education and I already mentioned what kind of work I did to earn the money I used for college. I went to a CC my first two years and lived at home. That saved money right there. Happy now? Does that satisfy you or are you still angry about something? I then TF’d to a public U and finished off the BS and MS degrees and then entered the work force. I paid off my $8K in debt within 6 months.
It wasn’t magic, I simply didn’t over pay for my education and worked and saved, like I said, not sure why that bothers you granpa, but that is how I did it and maybe you can explain to me why that wouldn’t work for other people. Apparently, the explanation is because they are helpless victims and the Gubberment has to come in and save them. Honesty and hard work would do it much better. The government can forgive loans all day and night but all that does is increase the federal debt which, eventually, has to be paid back by someone. Maybe your grandkids will pick up the tab.
<<<
will soon be treated as all other loans are in bankruptcy filings. As they should be.
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[/QUOTE]
That’s a horrible idea. Not fair to the banks who’ve processed the private loans, not fair to the taxpayers who’d have to pay for fed loans.
What about the Plus loans? should those also be dischargeable?
It would be one thing for FUTURE loans to be dischargeable, and then certain guards would be placed to further qualify the borrower.
@GoNoles85: Fixing the system is very nice for the future but it doesn’t do a thing about the present. It’s like, suppose we invented a machine that stops anyone from getting cancer going forward. Would you have us not treat anyone who already had it because we had “fixed the system”? I’m not a huge fan of the “so long, grandpa!” form of social engineering.
You also totally misunderstand the point about jobs. It doesn’t matter if “good” jobs have “never been easy to get.” It matters how easy, relatively speaking, they are. If only 10% of people could get good jobs, that would be a tough job to get (90% fail rate). It would also be ten times better than having a 1% chance, even though they’re both still hard to get. You went to school during the 10% period. The Great Recession was a 1% period. You’re at the top of a collapsing hill, telling people how easy it is to climb, and nevermind that the avalanche started after you reached the top.
I know you didn’t have to save $90,000. That’s kind of my point. Today’s students do. Today’s students look at your piddly $8k in debt and laugh because even at a “public U” they pay [double or triple](Fast Facts: Tuition costs of colleges and universities (76)) that each year. Corinthian charges a lot more than “public U.” I know it makes you feel all warm and cuddly that you were strong and proud and lifted yourself by your bootstraps and kids today and whatever, but the mathematical reality (they taught math back then, right?) is that it is far harder today (probably impossible in most cases) to work through school than it used to be.
@57,
I think you are missing the point. Kids do not have to pay $90,000 to get a good education. Stop painting people as helpless victims without options and choices. I have a son in college right now and he isn’t paying $90,000 to get a BS degree. Speaking of math … maybe you should do some.
There are millions of dollars of scholarships that go unclaimed each year because students don’t want to go through the application process because it might involved something like writing an essay. That is private money available to mitigate educations costs. It is great if the US government, using taxpayers resources, builds schools and pays teachers and puts computers in the schools all that, stick to that, but don’t let the government guarantee debt or forgive debt. That is where things get whacky.
All that does, like I said, and you kind of ignored, I guess you don’t want to talk about that small detail, is jack up the costs of education. That is where the problem lies. That, and the fact that some people over pay for their education, using too much debt. A little debt isn’t a bad thing. But too much debt is where the devil comes in to this deal.
I know how much a public U education is, like I said one of my sons is a junior tight now, and his little brother is 17, so he will be in college soon. and it is no big deal if you work and save. If you wait until you are 18 and then try to finance it, that makes it much tougher, obviously. In my kids case, I started saving for them with 529 plans and education IRA’s and so forth when they were babies. It’s called planning. Planning is a good thing.
This is the part where you tell me lots of other families can’t afford to do that and on that point we agree. Those families would need help. Reasonable people, from both sides of the aisle, should be able to figure out how families like that can get FA that doesn’t overly burden them with debt. Maybe a max of $15,000 a year. You would think we would have figured out a good system a long time ago as a country but I guess not.
I don’t feel sorry for people with $90K of student debt. I don’t think my money should be used to bail them out. All that does is encourage bad behavior. What about the families that work and save? Where is their bailout, Demo? Since you are in such a rush to spend other people’s money help me out with that one. There is no such thing as monopoly money, sir. Forgiving loans for some just adds to the debt for all. Are you willing to cover that cost, Demo? I’m guessing the answer is no if it is your money but heck yes if it is someone else’s dime. Typical. That figures.
@GoNoles85: Funny story, it turns out that kids do have to pay $90,000, if they go to Corinthian. You may recall that they are the focus of this thread. I agree that there’s too much debt and that education is too expensive. Those are pretty good reasons to change things going forward. Doesn’t do anything about the Corinthian kids though, or those similarly situated.
I also agree that planning is a good thing. Just the other day my infant son walked into our local bank and opened his own 529 so he won’t have to go into too much debt if he goes to college. He’ll top it up to the max every year with money he earns at his job. Oh wait, he won’t do that, because he’s a baby, and he can’t walk or work or plan or speak. That’s why I have to do it for him. But I guess those Corinthian kids with parents who didn’t save are just outta luck, right? This is America, where we punish children for the mistakes of their parents!
I’m more than happy to cover the cost of their education. I’d like to go after the executives and claw some of the money back, but Corinthian cheating people isn’t the students’ fault. It turns out that society is actually better off with a more educated population. I’d like to just nationalize the education system, but I’d settle for caps on tuition for schools that receive federal funds.
Oh, and there is such a thing as Monopoly money. Hasbro makes it.