@vineyardview $3,000 for room and board seems atypical, even for 1987. That’s ~$300/month to cover what I assume would be rent, utilities, and food. Sounds like a lot of roommates and ramen.
@shortnuke it was a triple room with a regular meal plan. Most rooms were doubles in the dorm, so I think that I did get some sort of discount for being squished in a dorm room. The next year, I rented a 4 bedroom apartment with 3 other people and paid $225 a month. I thought it was so expensive!
I am fortunate that I was able to put myself through college. Prices were low enough that it was possible.
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My question is why is this limited to student loans? Why not revoke the licenses of those who declare bankruptcy? Who fail to make their mortgage payments? Why are student loans being singled out?
Presumedly because the states that do this don’t hold the mortgages and this is an effective lever for compelling payment for the loans they did originate?
I’m ambivalent towards this. Since student loans aren’t dischargeable with bankruptcy, they can be draconian for a fraction* of people and they’ll be underwater forever. That said, nurses are generally stably employed and paid well enough it seems reasonable for states to nudge them to pay their loans.
*according to the federal reserve, mean debt holders own 30156$ with the median at around 12000$ which isn’t onerous unless you’re one of the outliers. Remarkably, graduates seem to have lower debt loads than people who didn’t graduate which I’d argue indicates the value of a college degree is a step function. Only take out a loan if you’re convinced you’ll graduate.
States do withhold licenses for failure to pay other debts, especially child support. Some states have what is almost an automatic garnishment for child support payments, requiring employers to pay a state registry directly even if the parent never missed a payment. I have to sign a statement every year that I am either not under a child support order or that I am current on payments.
Filing bankruptcy is a legal way to prevent the collection of debts. Congress has decided it isn’t allowed for student debts.
Mortgages are secured debt. Banks have plenty of options to collect, including foreclosure.
Why not garnish a % of their wages?
A garnishment takes a lot of work and time. You have to go to court, get a judgment on the debt, try to collect and when that doesn’t work you get an order of garnishment. Then you have to serve that order of garnishment on the bank or the employer and hope there is money in the account or money owed to the employee. All that costs a great deal (the filing fee to open the suit, the lawyer, the fee to get the garnishment order and the fee to serve it - all added to the debt) The amount that can be garnished is limited by state and federal law, may depend if it is a joint account (notice given to a joint account holder) and whether there are other orders of garnishment ahead of this creditor (IRS will bump everyone down the line). It takes time and fees increase the debt. Some federal debts can garnish without a judgment but no private debt can be.
This withholding licenses is just one way of collection, and it works. The licensing board doesn’t have to deal with the actual collection, but just gets a list of who owes money and who can’t get a licensed renewed. Then it gets another list of who has paid the loans (up to date or in full).
Another reason that the government should not be involved in student loans, period.
If the government wasn’t involved in student loans, there wouldn’t be many given in the private market, and those that were given would be at a high interest rate.
One can get a hardship waiver in certain circumstances. Otherwise, pay it back or don’t borrow it in the first place.
@twoinanddone , that’s because the taxpayers are subsidizing the loans. Not OK.
People can get into positions they did not anticipate which can make things go south in a hurry. Some people are rich enough not to ever have to worry about that. Most people are not.