Chances of laws changing??

[trolls1983]

Lately I have noticed a lot more news coverage in newspapers on this issue. Do you think in the near future we will be able to file on these. Its just crazy that my Private Student Loans are not eligible for bankruptcy. What does everyone think??? Hopefully it happens!

[HHM]

Not going to happen.

To many large lobby interests, banks and universities are against it.

Maybe in a couple decades when the generation that is saddled with all the student loan debt starts getting elected

[cyn5]

I have also been watching and waiting...hoping the laws would change. I was an optimist, but I don't think it is ever going to happen either. I think those of us with HUGE private student loan debts are going to have to wait until someone challenges it in court and it is made case law or something. I read an article the other day how the supreme court now allows unlimited contributions to politicians, we are all basically screwed. Sallie Mae can now pretty much "buy" any candidate they want. ha ha. Article also mentioned that the big banks/student loan lenders are threatening to put all their $ towards the "other" candidate to help them lose their seat if they don't go along with what they want. I'm sure the big banks are threatening Obama hard.

[Flamingo]

Will not happen. Think about this...if the laws change to allow this, there will be such a rush of people to file BK to dump their loans it would be insane. People would get these loans, get their education knowing if they plan correctly they could just dump the loans somewhere along the line after their degree, then go on with their education to get a good job and it wouldn't cost them a cent...Not only that, think about all the dumped debt that every taxpayer in the US would be responsible for...prices, costs and fees would be raised enormously for tuitions, etc. to cover this, higher state and local taxes, etc.

[HHM]

The change in student loans needs to happen on the front end, not the bank end. $90,000 of student loans to be a "teacher" makes NO ECONOMIC sense. There needs to be away to qualify student loans based on the potential economic earnings of the borrower. However, the universities will never go for that because it would mean they would finally have to admit the economic advantages and disadvantages of degree programs and charge accordingly.

For example, a teaching major shouldn't cost any more than X amount for 4 years, etc.

[MSbklawyer]

The change in student loans needs to happen on the front end, not the bank end. $90,000 of student loans to be a "teacher" makes NO ECONOMIC sense. There needs to be away to qualify student loans based on the potential economic earnings of the borrower. However, the universities will never go for that because it would mean they would finally have to admit the economic advantages and disadvantages of degree programs and charge accordingly.

For example, a teaching major should cost any more than X amount for 4 years, etc.

Good points, all.

The hell of it is that by making student loans and grants so freely available to anyone who can fog a mirror, regardless of academic potential (or lack thereof), the government has vastly increased the demand (and thus the price) for a college education; thereby requiring students to borrow ever more money to pay for it. Colleges are spending bundles of money to teach remedial math, writing and science courses to people who are in no way prepared to do anything that could be seriously called college level work.

Somewhere, somehow, it became undignified in this country to earn a living by a craft or skill or trade. Remember that guy in your high school (there's one in every graduating class) that could never quite grasp the concept of adjectives and adverbs, but could take a motor or a transmission apart and put it back together again in his sleep? He, too, simply MUST have a college degree (or flunk out and become hopelessly in debt trying) before he can be considered a productive and respectable member of society. What's up with that?

[Dst1]

This discussion has happened before and I agree 100% with HHM. The problem is on the front end.

I actually support the non-discharge of student loans, at least government ones. A government student loan is a loan between you and society. This is true of all eduction. It's a social investment. I think it's a reasonable expectation that people pay their debt to society in the same way we expect people to pay their taxes.

The problem is that this outlook has run up against the reality that student loans (and education in general) has stopped being about education and social improvements and instead become social welfare though the backdoor. I am not opposed to social welfare in all cases but if we are going to have social welfare we should be honest about it and not mix it up with education. I think everyone is a loser in the current mess we have.

[HakunaMatata]

MSbklawyer-

From the looks of it, your loans should be discharged without consequence...

Nothing I post is to be considered legal advice. You'd be foolish to give credence to anything I write. I graduated last in my class from a fly-by-night law school that no longer exists; I never studied or went to class and I only post on forums when I'm very, very drunk. Howzat for a disclaimer?

Wow, I think I'm in love!

[BKDefender]

I might be an optimist but I think if the legislature pushes hard enough in the next few years before the economy recovers somewhat, that there's a likelihood private loans will be dischargeable again. I think it'll be tied to how much a person borrowed based on what degree they were issued, so if you got a law degree like me and have a bit more than $100k in student loans then you're SOL, but if you got $80k in loans to be a secondary school teacher then yes you should have your private loans discharged.

--William

[MSbklawyer]

MSbklawyer-

From the looks of it, your loans should be discharged without consequence...

Interesting you should say that. Back when I graduated, student loans were dischargeable as long as they were 5 or more years old. Five years post-graduation, while I was sitting around contemplating filing my own bankruptcy, congress snuck up on me and changed the law. They added 2 years so that the loans had to be at least 7 years old before they could be discharged. Seven years post-graduation I was again contemplating filing my own bankruptcy. About 2 months before my loans were 7 years old, congress changed the law again to what it is now. Lesson: You hesitate, you lose.

Wow, I think I'm in love!

You're making me blush.

[Flamingo]

I might be an optimist but I think if the legislature pushes hard enough in the next few years before the economy recovers somewhat, that there's a likelihood private loans will be dischargeable again. I think it'll be tied to how much a person borrowed based on what degree they were issued, so if you got a law degree like me and have a bit more than $100k in student loans then you're SOL, but if you got $80k in loans to be a secondary school teacher then yes you should have your private loans discharged.
--William

What if the $80K in loans was due to an extended period of time for the person to become the secondary school teacher and not the normal 4 year education? Or what if the person flunked out and had to take longer to get the degree and due to their own fault or decisions had to go to school longer creating additional charges? There are a lot of fine lines and variances here as to basing what one borrows for student loans over what degree they were issued.

[Dst1]

What if the $80K in loans was due to an extended period of time for the person to become the secondary school teacher and not the normal 4 year education? Or what if the person flunked out and had to take longer to get the degree and due to their own fault or decisions had to go to school longer creating additional charges? There are a lot of fine lines and variances here as to basing what one borrows for student loans over what degree they were issued.

Because at sometime the system has to say enough is enough. The issues shouldn't be the cost of attendance, the issue should be the affordability of the loan. School teachers and doctors are a little different because there are so many incentive programs for them. But in general 80K for a four year degree is obscene. And that is not the worst. I have seen cases of 150K for a MA degree in Fine Arts.

The fundamental problem is that we loan people money based on the cost of the education, not on their ability to repay. Call a FICO score voodoo if you want but at least it's a step in the right direction. Imagine if private lending was like that. Banks loan you money based on the cost of the TV and ignored your income. Holy crap!! Yet that is what student loans do.

[tay666]

But in general 80K for a four year degree is obscene.

I agree.
My daughter is in her first year of college now, and total cost is around $20,000 a year. (about $8,000 of that is room and board)
Thank god we are poor, and she only had to pull loans for about $7000 this year.
Hopefully when she gets her engineering degree, she will be able to pay off her loans.

I think half the reason costs are so high, is because they know they have us over a barrel now. You almost have to have a degree to get any kind of decent pay anymore. All the good factory jobs that didn't need the fancy education got shipped overseas.

[Bob Walker]

Tay666,

After 4 years her debt is going to be $28,000 and if she runs into any problems and has to declare BK, she most likely will not be able to discharge that debt.

I don't believe a person needs to have a degree to get a decent job. I had 10 years of experience in web development and other information technology positions and I was still offered a job at Microsoft....and I have no degree.

Is it possible to get a good paying job with no degree? Yes! You need to build real world experience and have a can-do attitude. You also need to bring value to the company you want to work for.

A resume gets your foot in the door, an interview gets their attention. But to land the job you have to show you can bring value over all of the other candidates.

[BKDefender]

I generally agree with Bob that in the tech field a degree is not a hindrance. I obtained a Bachelors in Electrical Engineering, then did technology consulting for 8-9 years beside a lot of technology guys without degrees. Some of my most successful friends in the technology field do not have degrees. Having said that, one cannot take the EIT (Engineer in Training) exam nor subsequently be licensed as a PE (Professional Engineer) without an engineering undergrad degree. So depending on what field a person intends to go into, would dictate whether a degree is required.

--William