Student Loan Crisis

[carpro]

Luck? You call working my tail off at a full time job and in the classroom to keep grades up for academic scholarship "luck"???????

You're right. There's nothing "lucky" about working your way through college. It's harder to do now than it used to be, but most kids CAN live at home while they go to a local Jr. college and work while they do so.

But that's not what they WANT to do. They want to go to a 4 year university, live in a dorm, and party. Not work.

 

[BaptistDave1]

I've just proved it is possible to get out of paying the debt through bankruptcy and you still deny it.

No, you didn't prove it to the level I was speaking to. Yes, there are extenuating circumstances, but those are extreme and 99.9% of those with student debt will not meet the standards needed to use bankruptcy to pay off student loans.

People with lousy credit scores can and do purchase cars and homes.

Yeah and they have to cosigners and they pay huge amounts of interest. They don't get near what they could get with good credit scores.

Best thing to do is pay the debt instead of freeloading on the taxpayers or whining about it when it comes due. The terms are reasonable enough.

The government charges incredible amounts and the payments are more than people just six months out of college can afford. Most are not trying to be freeloaders despite your insistence on mischaracterizing them that way.

There is a movement afoot now called "strategic default", meaning they default on purpose, even if they can afford to repay the loan. Why? The goal is to provoke a settlement for a lower amount. Meaning they like the education they received, they just don't want to pay full price. They want someone else to do it for them.

Freeloaders! Why would anyone support or advocate for that type of behavior?

Most people are not part of that movement. And most people with student loan debt are not in favor of their loans forgiven by the government. They simply want a reasonable payment that they can budget for. No one is supporting or advocating for that kind of behavior. They simply want more reasonable payments that they can afford.

 

[BaptistDave1]

That is not true.

"Congress did not define the term “undue hardship” in the U.S. Bankruptcy Code. A common, but not necessarily universal, definition was introduced in a 1987 court case, Marie Brunner v. New York State Higher Education Services Corporation (Docket 87-5013, October 14, 1987, 831 F.2d 395). The Brunner case established a three-prong test for a borrower to demonstrate undue hardship:

The debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for herself and her dependents if forced to repay the loans.

Additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans.

The debtor has made good faith efforts to repay the loans."

But the second point is what I am referring to. If they have a situation that will persist throughout their life that will not permit them to pay off the loan, they can declare bankruptcy. Points 1 and 2 apply to a very, very minute number of people who cannot seek a secondary job or suffer from an illness or disability that will keep them from paying their loans and other bills. You cannot hold that up as proof that you can get out of debt through bankruptcy. Only a rare, few will be able to meet those standards.

The average person cannot use bankruptcy to get out of student loan debt. It's just not going to happen.

 

[BaptistDave1]

You're right. There's nothing "lucky" about working your way through college. It's harder to do now than it used to be, but most kids CAN live at home while they go to a local Jr. college and work while they do so.

But that's not what they WANT to do. They want to go to a 4 year university, live in a dorm, and party. Not work.

Jr. college credits, often will not transfer to other state universities and their degrees are usually just associates or associates of applied science. You can flip burgers for the same wages that a job that a Jr. College degree will get you. They want to go to a state university because they believe those degrees will open doors that a Jr.college will not open for them. Not all of them want to party. You're really good at just painting everyone with a broad brush, but you're wrong.

 

[Reynolds]

Carpo - not totally correct Just ask the multitude of fathers who have been jailed for not paying "child support"
Mind you - I am not talking about deadbeats - I'm talking about those guys who are working, trying their best
but when the amount is unreasonably high amount to be paid - or an unexpected event occurs. First they may
take your drivers license - well, how are you going to get to work? - When I was a taxi driver - I would often pick
up guys to take them to work (they had about a 90 day authorization) = and who paid the fare - Social Services.
WAIT! the Govt takes their license and/or vehicle - and then gives them a free taxi ride! ( some were as much
as $50 one way. makes a lot of sense doesn't it. Several of the taxi drivers were divorced and became a driver
so they could be an independent agent. As such - they did not get a paycheck as they were not employees - so no
support was taken out - NOT so they didn't have to pay - but so they could at least pay the rent (often just a room)
and a few dollars for food. - One day - the cops came and towed two cars away - the cops would not even let the
one guy get his wallet out of his vehicle. In addition- the cops refused to tell the drivers where their cars would be taken.

And when sent to jail - for non payment - they cant work - and now are getting even further behind in payments.

and for bankruptcy - you CANNOT include child support.

On my radio show, I interview three fathers on Christmas Eve - they would not be seeing their kids over Christmas.
well - that a whole other story.

Child support incarceration is Unconstitutional. I can not believe it has not been overturned by the Federal Courts. Technically, they are not jailing you for failure to pay a debt. They are jailing you for contempt of court. It's nothing but a word game and should be challenged. An attorney I used to work with tried to challenge it, but could not get through the legal hurdles. He would file when his client was in jail. By the time of the court date, months later, his client was out. Court ruled he didn't have standing because he was not incarcerated.

 

[InTheLight]

Right now, a person can get out of college with a loan at 12% -15% and payments around $450 after the 6-month grace period.

Do you have a link? Because I've never heard of student loans being that high. The vast majority of student loans are about one-half the rates you quoted, or 6%-7% interest rate.

The average student loan interest rate is 5.8% among all households with student debt, according to a 2017 report by New America, a nonprofit, nonpartisan think tank. That includes both federal and private student loans — about 90% of all student debt is federal.
Student Loan Interest Rates: Federal, Private, Refinancing — NerdWallet

Federal student loans interest rates for the 2017-2018 school year range from 4.45% to 7%. As of July, 2006, all federal student loans have fixed interest for the life of the loan. Although rates are reevaluated by Congress every year, the interest rates on existing loans will not be affected.
https://www.debt.org/students/financial-aid-process/interest-rates/

Few employers, and I mean very few, are offering recent college grads any kind of job that is more than an entry level position at a company and they don’t pay enough for someone to rent, pay on a car and ay pother living expenses and be able to afford the monster payments the government is asking them to make on their student loans. Entry level positions pay around $20,000 a year (give or take) at least in my neck of the woods. I know some who don’t make $18K on an entry-level job as a college grad.

Entry level jobs for inexperienced recent college grads. Sounds like normalcy to me.

$20,000 a year is equivalent to making $9.64 per hour.
$18,000 a year is equivalent to making $8.67 per hour.

I seriously doubt a college graduate is making so little money or else these college grads picked the wrong degree program.

At our rent prices around here, you cannot rent, pay on a car and be able to save for retirement, save for emergency car repairs AND pay off student loans at the rate the government wants the loans paid back.

What part of the country are you in?

So, I think that the solution, what would go a long way, is to make the payments affordable by lowering the interest on the loans. I pay 2% on my car loan and the bank is not hurting.

I hate to keep saying this, but I seriously doubt you are paying 2% on your car loan. Maybe if you leased it two years ago

I would also add that we need to cap the tuition rates that universities are charging. The cost for students at major universities is immense and these schools get away with it because they get paid by the government.

You could only do this at state universities and it would take an act of the state legislature. You can't cap tuition at private colleges.

The student loan crisis needs to be addressed in terms of getting universities to charge less and the government charging less interest.

I think 6% or 7% is reasonable for a 22 or 23 year old without any credit history.

 

[Reynolds]

Jr. college credits, often will not transfer to other state universities and their degrees are usually just associates or associates of applied science. You can flip burgers for the same wages that a job that a Jr. College degree will get you. They want to go to a state university because they believe those degrees will open doors that a Jr.college will not open for them. Not all of them want to party. You're really good at just painting everyone with a broad brush, but you're wrong.

Junior colleges cooperate with certain state colleges so credits will transfer. The student has to take responsibility and figure out what will and won't prior to taking each class.

 

[BaptistDave1]

Junior colleges cooperate with certain state colleges so credits will transfer. The student has to take responsibility and figure out what will and won't prior to taking each class.

Depends on the degree. There a lot of people who discover too late, particularly if they get an Associates of Applied Science degree, which is very common in Jr. Colleges. There is only one university out of several in my area that will take credits from a Jr. College.

 

[carpro]

No, you didn't prove it to the level I was speaking to. Yes, there are extenuating circumstances, but those are extreme and 99.9% of those with student debt will not meet the standards needed to use bankruptcy to pay off student loans.

Yeah and they have to cosigners and they pay huge amounts of interest. They don't get near what they could get with good credit scores.

The government charges incredible amounts and the payments are more than people just six months out of college can afford. Most are not trying to be freeloaders despite your insistence on mischaracterizing them that way.
.

OK. Let's talk about mis-characterization". In your OP you mentioned 12 and 15 %. Where did that come from? If it came from the people you talked to, maybe they weren't being honest. But did you check before you came on here crying about a program that already offers what you said it needed? That's twice the rates being charged. You said the terms were too short. Depending on circumstances and loan amount, up to 30 years can be obtained.

Just what is your complaint?

I think you're talking about people who got their degree and now just don't want to pay up, no matter what they say.

Freeloaders is right.

 

[carpro]

But the second point is what I am referring to. If they have a situation that will persist throughout their life that will not permit them to pay off the loan, they can declare bankruptcy. Points 1 and 2 apply to a very, very minute number of people who cannot seek a secondary job or suffer from an illness or disability that will keep them from paying their loans and other bills. You cannot hold that up as proof that you can get out of debt through bankruptcy. Only a rare, few will be able to meet those standards.

The average person cannot use bankruptcy to get out of student loan debt. It's just not going to happen.

You were wrong. Don't be running backwards.

Or is that just more "mis-characterizing" on your part?

 

[carpro]

Jr. college credits, often will not transfer to other state universities and their degrees are usually just associates or associates of applied science. You can flip burgers for the same wages that a job that a Jr. College degree will get you. They want to go to a state university because they believe those degrees will open doors that a Jr.college will not open for them. Not all of them want to party. You're really good at just painting everyone with a broad brush, but you're wrong.

Cry me a river. It is incumbent upon the student to be sure to take course that WILL transfer.

It's called taking personal responsibility for your life.

So, what you're recommending is that they go to a very expensive college, one like you've already criticized for being too expensive, refuse to work, and take out huge loans to pay for their education. Then when it comes time to pay the tab, you recommend that they whine and complain about the loans they signed and then stiff the taxpayers.

You bet I call that freeloading.

 

[Reynolds]

Depends on the degree. There a lot of people who discover too late, particularly if they get an Associates of Applied Science degree, which is very common in Jr. Colleges. There is only one university out of several in my area that will take credits from a Jr. College.

Student has responsibility to find out what transfers. You seem to not like personal responsibility.

 

[carpro]

I think 6% or 7% is reasonable for a 22 or 23 year old without any credit history.

See post #16, if you haven't already.

 

[InTheLight]

See post #16, if you haven't already.

Well, I can see it now. Yesterday when I was reading and responding, posts #14 through #23 were not showing up on my end. You posted some very good info. Thanks.

Sent from my Nexus 7 using Tapatalk