Hearing on Private Student Loan Bankruptcy Fairness Act of 2010

[trolls1983]

Looks like this is finally going to happen. It is way past due. About time people realize Private Student Loan debt is no different than credit card debt and other debts. Hopefully they get this done soon!!!!

[SendRelief]

Any idea on timeline?

Would it be safe to assume that because it's the Private Student Loan Bankruptcy Fairness Act of 2010 that it will occur in 2010? And would those of us struggling be able to take action in 2010?

[AlmostAmos]

Cliff's Notes on this?

[SendRelief]

Ck out: http://badgerherald.com/news/2010/04...uld_ease_f.php

[Mi Bankruptcy]

My luck is they would allow it to be dis-chargeable 1 year after i filed..

[fireworks]

I suspect if/when this passes, many companies will get out of the student loan business or at least raise their rates and restrictions. Student loans are (usually) cheaper than other loans because of the extra protections that the lenders enjoy under the laws.

Regardless, it would be really nice to be rid of my student loans. 1/10 of my monthly income goes out every month to pay them down.

[rpertusio]

Here's a quick 'form letter' (email) to send to your congressman. Simply fill in the blanks

http://projectonstudentdebt.org/letter_view.php?idx=21

- rp

[azstac]

I go to school now and only take out what I can afford to pay back. I try to get all of the help I can with grants and scholarships that are out there. I work full time and pay as much as I can towards what I owe already. I was just wondering if this would hurt everyone out there trying to finish school? I know it will hurt the ones who are now graduating high school. It is going to make it really hard for them to try to get a loan. It seems like a good idea that I can take out all kind of loans quit my job and live off of as many school loans that I can. Then when I get my degree ( I'm going to school for law ) I can just claim bankruptcy and start all over without paying all that debt back when I could of worked all along and only took out what I truly needed.....
Azstac

[rpertusio]

FYI, here are the 2 names for the bill-- one for the House & one for the Senate:

Senate: S. 3219: The Fairness for Struggling Students Act
House: H. R. 5043: The Private Student Loan Bankruptcy Fairness Act

[justbroke]

Unless and until the Federal Government takes over the administration AND funding of all student loans, this will only drive the interest rates up, and cost more in the long run. It could also lead to fewer dollars available unless the Fed is willing to step up to the plate and commit more Federal dollars to the program when the gap is created.

I do think that student loans -- Federal or not -- should be subject to discharge without the student needing to be one-foot in the grave.

[rpertusio]

When student loans became non-dischargeable, the rates should have dropped to the same as government student loans. However, the private loan companies have kept the rates higher. Since the private loans are very low risk (nearly identical risk as government loans), the rates should be the same-- but they're not.

I suspect the rates will rise, and may force some lenders out of the private student loan industry altogether. But, I'm still in support for the House/Senate bills-- not for my own benefit, but for others I know are stuck.

[justbroke]

When student loans became non-dischargeable, the rates should have dropped to the same as government student loans.

They are higher but still very very favorable rates compared to other items that you purchase. I could see if they were 10% higher than government-issued loans, I would see an issue.

Besides, the banks are not philanthropic in nature as they are a business. The federal government doesn't worry about making money (obviously!). Banks have to make a profit.

I suspect the rates will rise, and may force some lenders out of the private student loan industry altogether. But, I'm still in support for the House/Senate bills-- not for my own benefit, but for others I know are stuck.

I suspect they will rise too. If the Fed were the sole funder of student loans, then you could see some rate stabilization. I was looking at Stafford loans, and they don't look so bad. Appears the rates are going down over the next couple of years anyhow.

[rileymom]

You misunderstand I believe

I go to school now and only take out what I can afford to pay back. I try to get all of the help I can with grants and scholarships that are out there. I work full time and pay as much as I can towards what I owe already. I was just wondering if this would hurt everyone out there trying to finish school? I know it will hurt the ones who are now graduating high school. It is going to make it really hard for them to try to get a loan. It seems like a good idea that I can take out all kind of loans quit my job and live off of as many school loans that I can. Then when I get my degree ( I'm going to school for law ) I can just claim bankruptcy and start all over without paying all that debt back when I could of worked all along and only took out what I truly needed.....
Azstac

The majority of the people based on the restrictions of the private loan are only allowed to take out no more than 20% over the cost of tuition, books and fees. It is unlikely that someone would be able to go to a school that cost 10,000 a year and borrow 50,000 so under your assumption passing this law would leave the door open for people to take advantage but in reality the truth is that the majority of these loans were predatory and the interest rates skyrocket every single month even while you are in school.

And take a second to think about credit cards that are currently dischargable in bankruptcy; has that ever stopped a credit card company from sending approvals? Aren't there still companies that extend credit even in this economy so the idea that loans will be unavailable is a misconception. A sound bite for the irresponsible lender to use. The only people who will take a hit if this law passes are the irresponsible lenders who helped America get into this terrible economy in the first place and it will allow reputable lenders to continue to do business as it should be done. .Fairly and reasonably.

[TeacherMomma]

Does anyone know a timeframe for this type of thing from start to pass/not pass?

[rileymom]

Not sure it has been marked up for a vote yet. These things could take years so I encourage everyone interested or waiting for something to change to take action and write your reps.
visit:

http://projectonstudentdebt.org/letter_view.php?idx=21