<p>And you would be giving away a corporate asset, which is In essence, shareholder money. </p>
<p>OTOH, perhaps banks should be required by Congress or the Dept of Educ. to include the costs of a declining term life policy in their loan rates. That way, if someone does die, their debt is covered by the life insurance. But that still would not address this issue, since it is the parents who have the debt (and they didn’t die). And of course, the all-inclusive rates would be higher. (which is a good thing, IMO)</p>
<p>As a single parent of three kids, it probably would have been a good idea to have life insurance even without the loan.
Somehow the interest & late fees made the total due double in size.
I agree that it would be compassionate to waive at least some of the late fees & penalties that ballooned a $100,000 loan to $200,000.
But what was her father thinking?
He must have known she was already lacking in prudence, and that he would be needed as counsel, but why did he think a young single mom of three would be able to pay off an education loan of six figures?
I don’t agree that the balance should be waived.
However, apparently donations are coming in, and that should help as well as put pressure on the lender to reduce the late fees.</p>
<p>There are several lenders involved, not just one, and some of them HAVE reduced the interest and fees, at least one to 0 percent. However, some of these are with servicers who have no authority to reduce the payments or rates. Sally305, if you were the bank you may very well NOT write off the loan as a loss as your regulator would cite you on it. It is no different than the cashier at the McD’s giving away free food to the homeless guy to walks in because he’s hungry - you can’t just give away something that belongs to others because you think it is right.</p>
<p>I think Elizabeth Warren is going to get her wish and these private loans will be dischargeable in the future. That will be the end of private student loans. It is not that profitable as it is, and that will be the end of it. That may be a good thing, but it won’t seem that way to those who cannot go to college because they cannot pay the gapped amount.</p>
<p>@mcat2 Your son could have declined that alumni loan and taken the other loans that dont require cosigners. Those are offered to all US citizen med students. It is not a case of “some schools offer”…they all offer them…they are fed stafford loans and grad plus loans… Your son’s school has parents who cant cosign, so those med students take the other loans that dont require cosigners. </p>
<br>
<br>
<p>Yes, my son has to do the same with his med school merit scholarship…along with having to attend an annual dinner that has something to do with it. </p>
<p>But what was her father thinking?
He must have known she was already lacking in prudence, and that he would be needed as counsel, but why did he think a young single mom of three would be able to pay off an education loan of six figures?
<<<</p>
<p>I agree. And frankly, she also likely had full federal loans on top of these private loans. The fed loans would have been forgiven when she died. If so, then the parents were nutty thinking she could pay for full federal loans on top of these private loans. </p>
<p>“What was her father thinking”, is right. I can’t wrap my head around this. I am imagining having a D who begins having kids at 18, who goes on to soon have 3 kids w/o a supporting SO/husband in the picture (and no good income herself), and then I am supposed to think that co-signing a 100k in loans for a CC education as a RN is a good idea? Heck, just the risk that she never would be able to complete the program would be enough to scare most sane people. </p>
<p>It’s a contract. A contract is written with explicit terms to be understood by all parties. What is there to do with “having a heart?” You could probably loan me $10,000. We could sign a contract stating the terms by which I pay you back. You could easily absorb the loss. Does that mean I should just not pay it back and when you try to sue say “Have a heart! You can afford the loss.” Maybe you don’t want to forgive it because I can repay. Say I quit my job and took all of my money and gambled it away. How about now?</p>
<p>
</p>
<p>Guess we know why you don’t run a bank then. </p>
<p>At the end, somebody got to pay a loan and that somebody might be the party that gave such a loan. Say, that many have some solid reasons not to re-pay these loans to the party that gave them the loan. The reasons maybe losing ability to work, severe health situation in the family or dath (as in OP case). The great number of un-paid loans will destroy an institution that in a businees of providing such loans. So, we either have the system that has such institution or we do not. There is no middle ground. This system has to be based on solid obligation laws. Otherwise the whole country may suffer (2008 economy, anybody?). There is another system that is based on notion that money grows on trees, which our government is trying hard to build, but it does not look that it is a very successful goal. Unfortunately there are no trees like this on our planet and even plant that is called “Money tree” does not grow any, it is in our secretary window, it is very pretty.
there is nothing comlicated about this, as simple as could be. It is made complicated, but the fact remains, somebody will pay this money one way or another. </p>
<p>Plenty of institutions forgive loans (all of which are “contracts”). Stanford’s and Yale’s business schools do for MBA graduates who go into non-profit or public-service work, and I am sure others do as well. Banks can forgive mortgage loans to avoid properties going into foreclosure or to help customers who got burned by sub-prime mortgages. The point is, private entities often have latitude to make exceptions or allow contracts to be broken when they choose to. And they are not all beholden to the wishes of stakeholders. Of course, no organization is going to give away so much money that they drive themselves out of business. </p>
<p>Businesses Welch on their obligations all the time they raise frivolous defenses. Sometimes they declare bankruptcy. When the parents cosigned for these loans, we’re they advised they were virtually non-dischargeable in bankruptcy? That the banking industry lobbied our congress to take away this protection?. The predatory student loan industry is extremely profitable. Take a look at how much Sallie mae pays it’s execs. It’s stock value increases. It has also fed and fueled huge increases in the cost of education…all at the expense of the younger generation and oftentimes their middle class parents just trying to do their best for their best for their kids. It’s very telling and the student loan industry may be a significant contributer to the demise of the middle class.</p>
<p>I’m part of the group that thinks it would be better to protect people like this from themselves in advance, rather than having to rely on the compassion of banks to save them.</p>
<p>Assuming by “protect people” you mean by killing these loans (ie, if they were dischargable), then where does it end? Should we make credit cards illegal? Stupid people can wreck their lives financially with them, let any benefits they provide be damned. </p>
<p>Okay, you can stop stupid people from doing stupid things. It just requires you stop everyone else from doing smart things. </p>
<p>I can’t refute the slippery slope argument without deviating into politics. I’ll just say that I don’t support a “devil take the hindmost” approach to public policy.</p>
<p>Vladen, what are you talking about? These types of loans were always dischargeable until the banking industry lobbied congress to change the rules. What does that have to do with credit cards that ARE dischargeable, although not as easily as in the past. If student loans become dischargeable again, perhaps the cost of education will come down.</p>
<p>The only reason unqualified applicants are granted enormous student loans is because they cannot default in bankruptcy. If you allow that they won’t get the loans in the first place. Is that better? I didn’t see any compassion when half of my neighborhood was being foreclosed on a few years ago. Mostly, a lot of people who couldn’t afford the inflated price of a reasonably nice house got to live in it for a few years before they had to move out.</p>
<p>What bank loans people 100K dollars to gamble?</p>
<p>Or perhaps colleges should be penalized by the lack of success of their students. Regardless…the anybody can get a student loan simply by signing a promissory note has been the biggest driver in the cost of education. If there was not so much student loan money available, 1.2 trillion and counting…the cost of education at most colleges and universities would likely be much lower and many students who should be going to trade schools would be doing just that instead of graduating from colleges with no marketable skills and only non-dischargeable debt. Law schools, for profit scools, expensive privates have gone a long way in destroying their students’ lives, subjecting them to a world of unemployment or poor paying jobs and huge debt. In many respects, the educational industrial complex has become part of a huge scam perpetrated on the young.</p>
<p>“Plenty of institutions forgive loans (all of which are “contracts”). Stanford’s and Yale’s business schools do for MBA graduates who go into non-profit or public-service work, and I am sure others do as well.”
-Here is the reason - they limit choices. Why to take loans and then have limited choices? Isn’t it better to get education without loans? Specifically many employers are paying for the MBA, this is probably the most common degree to find somebody paying for it and no loans. My H. and I got our MBAs this way. Given, we did not attend /Stanford, but couple people that I know who were paid for their MBA by the employers got their from U of Mich (at that time, I believe it was #5 business school in a country). And, of course, for those who footed their UG degrees bu loans attending at some top places, com’n these kids would find many other UGs that would offer them full tuition or so in Merit awards. So, it is ALL the person’s choice and careful planning. Very very few of young proffessionals can afford repaying few hundreds of thousands quickly. It is an extremely sad story when parents are obligated to do so. But how about all others? They are not going to stay alone, they will have family, how about this young family? Why put yourself in this shoes? </p>