[quote=earlyretirement][quote=bearishgurl][quote=patb]we may still be better off letting them discharge this debt.
we let corporations discharge debt in Chapter 11 and businesses are utterly ruthless, why do we put the dog on people who marry, have kids, etc..
If there is fraud, go after them, but, the system is awash in debt, that has to end.[/quote]
I am completely against this. I know several people (early gen-x-ers and boomers) who have deliberately taken out $65K to $120K in student loans AFTER the age of 45. I have NO IDEA who any of them think would hire them in this day and age after they obtained their lofty credentials. In all cases, this was an utterly foolish idea, IMHO.
At any age, it is grossly unfair to those who kept their noses clean and only paid for the education their could afford in life. IOW, their “contemporaries” (who elected NOT to borrow for college) shouldn’t be “outgunned” in the job market by those who successfully “stole” a bachelor’s degree or even graduate degree!
A college “degree” is not something which can be repossessed. There is no collateral here. The benefits of a degree follow the former student until their deaths. Just like a personal injury award (a condition that follows the individual who sustained the injury until their death), the injury award/college debt legally belongs SOLELY to the affected person.[/quote]
I totally agree with you BG. I don’t believe it should be easy to discharge student loan debt so easily. While I do think there are legitimate cases where someone might have a need to write off the debt, I don’t believe that it should be easy for anyone in bankruptcy.
I speak from experience having graduated with over $100k in student loans and paid them all back. As much as some people want to say a college degree is worthless these days. The truth is they are not. As mentioned, they are almost a necessity in getting a solid job after college.
Us taxpayers would be on the hook most likely if people were able to discharge them so easily.
As mentioned, I think banks need to change the way they dole out these loans and look at each individual situation of the student, their grades, their majors, etc. Obviously higher risk degrees (i.e. almost worthless degrees) would need to have parent co-signers that agree to pay it back if the student doesn’t. That would make parents think twice about Johnny or Janie getting that Art History or Religion major.
But I wouldn’t like to see everyone just able to discharge their student loan debt so easily as we’d get hit somehow. Banks would pass this on to us.[/quote]
Or, we could get the government out of the student loan business altogether (no guarantees, nothing), and let the private market deal with it. I’m willing to bet that loans would be much smaller and much more expensive, likely leading to lower tuition and other costs. As many have already pointed out, the reason college educations have gotten so expensive is because everyone has been conditioned to take on six-figure loans to go to college. That’s totally unnecessary for most college students (yes, they might have to live at home for a few more years, start out at a junior college, and work their way through school, etc.). Unless one is getting a medical degree (even law degrees are questionable at this time), or a doctorate in a very high-demand, lucrative field that is likely to be in high-demand for a long time, getting into that much debt for a degree is foolish, IMHO.
The reason student loans are non-dischargeable in BK is because most of them are backed by the government. The government should return to the funding levels for higher education that were in place ~20 years ago, rather than backing private-market or public student loans that are more likely to push prices up and force more people deeper and deeper into debt.
