<p>U.S</a>. Universities Feast on Federal Student Aid: Virginia Postrel - Businessweek</p>
<p>Even the mainstream media is catching on now. It's time for the federal government to get out of the higher education industry and finally let the free market adjust tuition prices to reasonable levels.</p>
<p>And only allow well of families to go to school! Good. Let’s keep all financially challenged students in the lower classes.<br>
(In case you don’t get it, that’s tongue in cheek)</p>
<p>How much do you think the gov’t backing $5.5-7.5K/year of loans is affecting prices?</p>
<p>I think the federal government MUST change bankruptcy law to allow private student loans to be foregivin in bankruptcy (subject to same rules for other debt discharge, which now prevents frivolous discharges) and MUST get toughter on loans to for profit schools. Otherwise we are imposing an outrageous tax on our most vulnerable.</p>
<p>“I think the federal government MUST change bankruptcy law to allow private student loans to be foregivin in bankruptcy”</p>
<p>Sure, so that all students borrow enough to live in a single dorm, buy all new hardcover books, pay for those iPhones with unlimited data… and declare banckruptcy the day after they graduate. Who would lend the money? The US taxpayers?</p>
<p>FCA, I think irresponsible lending would be decreased. BTW, its not that easy to get rid of any debts in BK. So sure, the kid at Wharton or Med school would get loand. But the art history major at the local state U wouldnt get any loans over federal amount. Which is my point. The excessive lending has to stop.</p>
<p>Can undergrads get loans over federal amounts without collateral? Can parents, or without good credit scores?</p>
<p>If the excessive borrowing stopped, it would have the same effect … without the bankruptcy factor. How about advocating personal responsibility? If people would say no to schools that cost more than they can afford without excessive borrowing, schools just might lower tuition in order to stay in business. There is more than one way to make this work … forgiving loans in bankruptcy is not the only way.</p>
<p>I am pretty confident that the limited amount of federal aid available to students is not what led to the high cost of tuition. The need to attend a school regardless of affordability … and then borrowing to “afford” it … is more likely the culprit.</p>
<p>Vonlost, students would need a co-signer with good credit for amounts over federal limits. </p>
<p>Kelsmom, it would be nice if kids just stopped borrowing over federal limits on their own, but I do not see that happening. Its not fair, especially with the for profits - their marketing power allows them to bamboozle kids. Why do you expect kids to just say no, when they dont? Why do the kids have to be responsible, but not the banks?</p>
<p>Because the world is full of folks who want your money. I want a nice car, and I could get a loan for one. I want a big house, and I could get a loan for one. I saw a commerical about a really nice vacation island in the Caribbean … I could charge it. I saw some nice Marc Jacob purses at the store, and they would give me a credit card to charge one, if I want. That’s the way it is. Just say no.</p>
<p>Kels, debt for the things you mention CAN be forgiven in BK, so the banks would be less hesitant to loan for those things than for student loans. Too many kids have been fed the line that all student debt. Its not. The banks lobbied big time for the 2005 changes to the BK act to provide that private student debt would not be forgiven. Its a disgrace. </p>
<p>The proposal to change it back - HR 2028</p>
<p>is supported by educators and unions, but opposed by banks
<a href=“https://www.popvox.com/bills/us/112/hr2028[/url]”>https://www.popvox.com/bills/us/112/hr2028</a></p>
<p>"… students would need a co-signer with good credit for amounts over federal limits … it would be nice if kids just stopped borrowing over federal limits on their own …"</p>
<p>Contradiction? If the co-signers are parents with good credit such that banks see a low risk, where is the excess? If banks are wrong, they won’t be repaid. The system works. Self-restraint is the key.</p>
<p>I think the federal government MUST change bankruptcy law to allow private student loans to be foregivin in bankruptcy</p>
<p>Loans that have already been made, shouldn’t be dischargeable because the terms of those loans were made knowing that they weren’t.</p>
<p>Maybe make future loans dischargeable.</p>
<p>That said, now that co-signers are involved (for years, co-signers weren’t req’d for Sallie Mae), wouldn’t that mean that both people (student and co-signer) would have to declare bankruptcy?</p>
<p>Vonlost, the banks have years and years to collect. Yes, some loans go bad They will be taking money out of peoples Social Security. I am suggesting the banks shouldnt have it any better than they do with credit card debt. </p>
<p>Mom2 – so in 2005, why was it fair to make old private student loans non-dischargeable AFTER they had been taken out? Yes, banks could go after either co-signer or student (assuming student also signed).</p>
<p>I think it’s ridiculous that arent Plus loans don’t look at credit score or debt ratios. </p>
<p>Since some parents are taking these loans out with the “family agreement” that the student will pay them back, it’s another way for students to get their hands on a bunch of money with no significant credit check. Yes, the parent is held responsible, but they also are with co-signed loans (for which they really must qualify).</p>
<p>
Sorry, no way. I know many kids in middle class families who are attending colleges well beyond their means. I have heard my SIL tell me “how can she deny my neice her dream school?”, etc. Sorry, but we live very frugally, have saved and applied to schools where S got good merit. He will graduate debt free. It is not his dream school, but he is getting a great education (and hapy there). I do not want to be paying (with my tax dollar) for others who over extended themselves going to school. And believe me I am aware that this is the next big crisis (or one of them) this country is facing. We will have many kids graduating who cannot afford the new car, condo, apt., whatever because they owe so much in student loans. It will be a drag on the ecconomy, but I am sorry I have scrimped and saved and I don’t want to pick up the tab. I do blame HS’s and colleges for not letting kids know when they apply that it is not just about getting in, they have to be able to pay for it. Lets face it, we all can’t afford luxury cars, why isn’t the same logic applied to schools?</p>
<p>“They will be taking money out of peoples Social Security.”</p>
<p>Is this current law?</p>
<p>Kayf,</p>
<p>I am glad you realize that with BK for student loans, the access to credit will be limited.</p>
<p>What I do not enjoy is requests by people who think they can discharge all their obligations on taxpeyers’ backs.</p>
<p>Vonlost, yes lenders are currently attaching SS for payment.</p>
<p>FCA – Unless the system is changed, these kids will be begging for a bailout. This will be as big a crises as the housing mess. Based on past behaivor of our govt, then the taxpayers WILL pay. If my choice is the banks lose or the taxpayers lose, I would prefer it to be the banks. Dont think that just becuase you and your kids were responsible you wont be paying your share of a bailout.</p>
<p>* I think irresponsible lending would be decreased.*</p>
<p>Yes…for FUTURE student loans.</p>
<p>Just as when Sallie Mae started requiring co-signers a couple of years ago (after bank failures), those loans decreased. And, with co-signers, fewer will declare bankruptcy because the family member won’t want to do so, too.</p>
<p>But, to make older huge loans dischargeable would cause a bunch more people to declare bankruptcy. For a good number of people, it wouldn’t be too horrible. If they already own a home, that’s not hurt. If they have a car payment that they’re current on, that’s not hurt. If they have a credit car that they’re fine keeping, that’s not hurt. They discharge the unwanted debt, and then because they’re keeping current on mortgage, car payment, etc, they restore credit pretty quickly. For a person who has $100k in a student loan, discharge that and have a better life.</p>
<p>I’ve seen people go thru bankrupcy and then just carry on their lives because their homes and cars and one or two credit cards were current. You don’t have to declare all debt. </p>
<p>is supported by educators and unions</p>
<p>Just that would make me want to not support it. Can’t think of much that I’ve ever supported that was in line with unions and teachers (aka teachers unions).</p>
<p>“lenders are currently attaching SS for payment”</p>
<p>Private lenders cannot, but the Feds can for federal student loan repayment:</p>
<p>[Garnishing</a> Social Security benefits due to a debt](<a href=“http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/426/related/1]Garnishing”>http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/426/related/1)
<a href=“http://www.illinoislegalaid.org/index.cfm?fuseaction=home.dsp_content&contentID=2501[/url]”>http://www.illinoislegalaid.org/index.cfm?fuseaction=home.dsp_content&contentID=2501</a></p>