Cancelling Student Debt

Horn6721 said:
" students who truly can't pay back their student loans should be able to have it discharged in bankruptcy court."
That is fair IF they are treated exactly like anyone else who files bankruptcy with the consequences.
I am guessing if that is enacted many will magically find a way to pay
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The problem is that discharge in bankruptcy court has its problems as well. The policy reason behind not allowing it is that the federal government effectively becomes the creditor, and we typically give the government powerful credit enforcement.

Here's the other reason. Bankruptcy isn't that bad of an outcome for some people, so this could cause some truly bad behavior. For example, suppose you go to college and take out a huge student loan balance (for example, $200K). You graduate at 22 and then file for bankruptcy. Most likely you're totally broke since you haven't made any money yet, so there's nothing for your creditors to go after. Yes, it'll trash your credit. You probably won't buy a house or a new car for ten years, but $200K of debt is gone. Is that a good deal? Honestly, for a lot of people, it probably is.
 
Horn6721 said:
Mr D
Srsly?
You know how weak that is.
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No, I don't. Please explain why the guy who maxed out credit cards on booze, cigarettes and strippers should be in a better position than the college student. I honestly don't get why that's fair.
 
Mr D
Again Srsly?
I wasn't aware the laws looked at how money was spent.
Silly me I thought a loan signed for was just for the amount of a loan. And if one doesn't pay the money back , goes through bankruptcy. Why should how the money was spent affect the bankruptcy.
Now you are trying to make how the money was spent a condition.
 
Horn2RunAgain said:
""other levels", deez? In decades of working in manufacturing supply chains I can go on and on about markets being manipulated.

How long exactly have you been out of the work force? How many industries did you actively work in? I'd like to know to gauge your depth of expertise
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I don't claim expertise in business, but I know two things that are relevant. First, I know how higher education is funded, because I had to learn the issue for political and legislative work. In fact, I saw and wrote about what's happening now back in 2003 when Texas got rid of its tuition caps. Of course, that doesn't make me smart. Only an idiot wouldn't have seen it coming.

Second, I know what the legal consequences would be for a business or private entity that operated the same way. Honestly, that's really all that matters. I don't doubt that some businesses engage in shady dealings like market manipulations and price fixing in various ways. However, when they do, the consumer has a remedy - through common law fraud or deceptive trade practices laws, antitrust laws, and a myriad of other state or federal laws. He or she may not always exercise it, but it's there.
 
Horn6721 said:
Mr D
Again Srsly?
I wasn't aware the laws looked at how money was spent.
Silly me I thought a loan signed for was just for the amount of a loan. And if one doesn't pay the money back , goes through bankruptcy. Why should how the money was spent affect the bankruptcy.
Now you are trying to make how the money was spent a condition.
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The laws don't look at how the money was spent, but they do look at what type of loan is at issue. Credit card debt can be spent wisely, but it can also be spent unwisely. It can be discharged either way, and I don't see anybody caring about this. However, if someone borrowed for school, we're much tougher on them, and we get righteously pissed at the thought that this person might be more deserving of a break than the guy who spent money on booze, cigarettes, and titty dancers. Call me crazy, but that seems like weird priorities.
 
??
You keep trying to bring your morality into how loans willingly taken are handled by courts if the people default.
Wonder if we can find students who took student loans who spent the money on booze cigarettes and titty dancers?
 
Horn6721 said:
??
You keep trying to bring your morality into how loans willingly taken are handled by courts if the people default.
Wonder if we can find students who took student loans who spent the money on booze cigarettes and titty dancers?
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If morality shouldn't matter, then why treat them differently? Why let the credit card debtor slide but throw the book at the student loan creditor (and make very self-righteous moral condemnations of him while at it)?
 
? That is what all of us except you have been saying. Are you doing dabbling too much in UK ale?
If they borrowed the money they should pay it back or suffer the same consequences as any borrower does who defaults
Who is asking for special consideration? You and Demx
 
Horn6721 said:
? That is what all of us except you have been saying. Are you doing dabbling too much in UK ale?
If they borrowed the money they should pay it back or suffer the same consequences as any borrower does who defaults
Who is asking for special consideration? You and Demx
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The Right in general is for doing nothing, which treats both differently. The Dems are for treating them differently. I'm for treating them differently, because they're very different.

However, what I'm advocating is very different from what they're advocating. It's actually closer to your position than to theirs, because the loan forgiveness element of this is actually not the big issue. Fixing the long term problem is or at least should be the big issue, because compared to it, the loan forgiveness issue is a drop in the bucket.
 
Mr D
I don't disagree that fixing the issue long term is what is needed.
Where we disagree is many if not most think those who took out loans agreeing to pay back should do just that. Pay the loan back.
 
Horn6721 said:
Mr D
I don't disagree that fixing the issue long term is what is needed.
Where we disagree is many if not most think those who took out loans agreeing to pay back should do just that. Pay the loan back.
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I understand that, and as things are, I agree. But how's that position working out? Are we getting close to reform with it? I don't see much evidence of it.

But would I accept some degree of loan forgiveness if it meant I could also get fundamental reform of higher education? Absolutely. It just isn't enough money to blow the entire effort over. However, what really bothers me is that there isn't any effort. We're asked to accept debt forgiveness and no reform the Democrats position) or no forgiveness and no reform (the GOPs position). I choose the latter, but I think it's a **** sandwich.
 
I'm trying to follow the argument here since I'm out of the loop. We all agree pay back the loan you signed up for. The difference is that a credit card loan can be forgiven via bankruptcy but a student loan cannot, right?
 
No guy
Student borrowers may file for bankruptcy but until now haven't needed to.
Since payback has been on hold for over 3 years they haven't need to make payments
Sweet deal uh?
 
guy4321 said:
I'm trying to follow the argument here since I'm out of the loop. We all agree pay back the loan you signed up for. The difference is that a credit card loan can be forgiven via bankruptcy but a student loan cannot, right?
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Horn6721 said:
No guy
Student borrowers may file for bankruptcy but until now haven't needed to.
Since payback has been on hold for over 3 years they haven't need to make payments
Sweet deal uh?
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Student loans are not dischargeable in bankruptcy. However, 6721 is correct that during COVID payments were suspended. (Interestingly, my payments were not.)
 
Mr D
I think you are wrong. Student loans can be discharged through Chapter 7 or Chapter 13.
Provide a link that shows otherwise if this is not accurate.
 
guy4321 said:
I'm trying to follow the argument here since I'm out of the loop. We all agree pay back the loan you signed up for. The difference is that a credit card loan can be forgiven via bankruptcy but a student loan cannot, right?
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And that is known before the student signs the note.
 
Horn6721 said:
Mr D
I think you are wrong. Student loans can be discharged through Chapter 7 or Chapter 13.
Provide a link that shows otherwise if this is not accurate.
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Government backed loans have been exempted for 30 or so years. Private loans, which some have but not many, can generally included in a BK.
 
mb227 said:
Government backed loans have been exempted for 30 or so years. Private loans, which some have but not many, can generally included in a BK.
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Thanks. As the kids say today, that's very "sus" that the gov loans can't be forgiven via bankruptcy.
 
Horn6721 said:
Mr D
I think you are wrong. Student loans can be discharged through Chapter 7 or Chapter 13.
Provide a link that shows otherwise if this is not accurate.
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I did a little digging, and you're right at least to a point. It is possible to discharge them in bankruptcy. However, it is very different from other bankruptcy creditors. Link. For starters, you have to file separate litigation from the bankruptcy proceeding (called an adversary proceeding).

To succeed, you'll usually have to meet the "Brunner Test" to get it discharged.

  1. You can't provide the basics you and your family need each month, like rent, food, utilities, and car expenses. The court will review your income and expenses for verification.
  2. It's doubtful that you'll ever earn more than you're making now. Unless you suffered a tragic, debilitating accident, plan to hire an expert to testify about your future career prospects.
  3. You did your best to pay your student loans.
If you've graduated from college and are still fairly young, #1 and #2 are going to be a steep climb, and if the proceeding is as the name of it suggests, the student loan creditor is going to show up and put up resistance. There's a reason why this option isn't often pursued.
 
Thanks Mr D:headbang:
Now what is your opinion on mass numbers of borrowers just refusing to pay as some demx are suggesting?
 
Horn6721 said:
Thanks Mr D:headbang:
Now what is your opinion on mass numbers of borrowers just refusing to pay as some demx are suggesting?
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I'm not a "break-the-rules radical." If they refuse to pay and the law isn't changed, the student loan creditors should come after them as they would anyone else.
 
Mr. Deez said:
If morality shouldn't matter, then why treat them differently? Why let the credit card debtor slide but throw the book at the student loan creditor (and make very self-righteous moral condemnations of him while at it)?
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I agree they should be treated the same. The problem is that there are laws ordering that they be treated differently.
 
Monahorns said:
I agree they should be treated the same. The problem is that there are laws ordering that they be treated differently.
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There is a case for them being treated differently, but I'd go the reverse direction from where we are. I think the guy who borrowed money for booze, cigarettes, and titty dancers should have it tougher than the guy who borrowed money to try to improve himself with an education. Right now, we go lighter on the former.
 
Mr. Deez said:
There is a case for them being treated differently, but I'd go the reverse direction from where we are. I think the guy who borrowed money for booze, cigarettes, and titty dancers should have it tougher than the guy who borrowed money to try to improve himself with an education. Right now, we go lighter on the former.
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I'm okay with that as long as working class people don't shoulder the burden. The banks and universities should bear 100% of that cost. I would even be for reducing salaries of politicians who wrote the bills or pushed them into being law, for the purpose of covering expenses. But plumbers, welders, electricians, garbage men, etc shouldn't be touched by this at all.
 
horninchicago said:
I didn't know everyone who went into credit card debt did it at the titty bar.
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Damn...I could have a field day given I usually have a good quarter mil in available credit with me when I go out somewhere...

Lost in the discussions is that credit card debt is not backed by federal funds. Student loans DO tend to be federal funds. It should NOT be easy to walk federal debt. Yet the libtiles never grasp that reality...
 
Here is a race hustling Demx rep from Fla bemoaning requiring students to repay their loans.
https://thehill.com/opinion/congres...ourts-supreme-injustice-to-student-borrowers/

She first argues that a college education is "a central tenet of the American Dream."
So according to her we sucker teenagers to walk the plank and jump into a pool with hundreds of thousands of dollars of debt that will drown folks for life.
The average payment on a student loan in 2021 was $200-$299/ month. The average length of loan is 20 years. According to Forbes college graduates earn 1.2 million MORE(2.8 million vs 1.6) than those without a degree.
Obviously these are just averages BUT someone who makes over a million more should be able to pay $60,000 spread over 20 years.
Why have so many been able to repay their loans? So for most it isn't the amount of the loan or the time to repay it. What is the difference?
I use the term "Most" since there will be some with circumstances that should make their loans forgiveable,
Funny so far all we've seen or heard from is people who should and can make payments but are whining for freebies.
 
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