After a few years of unemployment and being treated for bipolar depression my loans were in default. Due to the grace of the system at the time, I was able to bring my loans out of default and I now pay them like everyone else. This type of thing punishes the downtrodden even more. There must be a set of checks and balances that at least attempts to differentiate between deadbeats and broke people that don't need a higher hill to climb. The loans never go away. You can't escape them with bankruptcy. Let's not make this a living hell for people that got educated and fell on hard times.
I don't pay student loans. Do you know why? I don't have them. I went to an inexpensive local school, worked while going to school, and took the public bus to and from it. (I was fortunate enough to be able to live with my parents.)
While I don't know your situation, it's hard for me to feel sorry for someone who went to an expensive private school, lived on campus in a "country club" atmosphere, and then expects the Taxpayers to cover it.
You say you don't know anything about his situation but then you go on to heavily speculate about his situation.
I'm in your situation btw. I worked through undergrad and grad school and had my work pay for almost all of my school so I never had any debt. But I realize I was lucky and had a good situation lined up and not everyone has the same opportunities. Some people need more assistance than others, and I don't mind if the govt helps those folks out.
I think it's more that students are allowed to take loans that they can't possibly service. Since you can't get out of loans via bankruptcy and the loans are backed by the federal government, loan agencies have no reason to make sure borrowers are qualified. When they issue big loans to women's studies and philosophy majors, they don't assume any of the risk that's rightfully theirs. That's where the abuse happens. Students, in their ignorance, take on more than their fair share of risk.
Talking about "taxpayers" is disingenuous at best - the private loan holders are the ones that made the unwise loans and should be directly losing out. To the extent that these private parties have agreements with USG guaranteeing they'll be bailed out, then the proper time to object to that corrupt arrangement was when it was being made!
Debt, in general, must be dischargeable in bankruptcy. Otherwise the practice is equivalent to the gradual reinvention of slavery. Student loans already run afoul of this principle - let's not double down on the corruption merely to delay writing down losses that have already occurred.
Student loans are not dischargable because there is nothing that can be repossessed and you don't want to allow graduates declaring bankruptcy at 21 to wipe out the debt. (Most people with large debt would be better served to immediately declare bankruptcy than to even attempt paying them off.)
Under such a system, once lenders stopped lending, college would again become available primarily to the wealthy.
Yes, that is the justification that the private lenders bought the law with. But it doesn't refute my point.
From a policy standpoint, if the realities make it impractical for lenders to lend then papering over those incentives is effectively doubling down on a bad idea. Compromising in order to encourage more of something generally results in system feedback consuming the desired change, with the downsides of the compromise remaining.
Fewer college loans would mean that society would have to adapt elsewhere - the K-12 schools couldn't punt any substantive learning until "college", employers couldn't insist on pedigree degrees for every job, the value in funding state universities would be respected, etc.
As we're fast finding out, our societal addiction to credit does not help people actually afford things, but creates a de-facto-mandatory system of wealth extraction from the powerless.
What if the realities make it practical and profitable to lend if that debt is not dischargeable, but make it impractical to lend if that debt is dischargeable?
In such a case, it seems worth exploring whether society overall and different segments are better or worse off with each policy.
I think that's the case we're in, and even though it would likely help me personally and help my kids, I don't want to return to a world where a pedigree degree is even more restricted to those with, well, pedigrees.
The specific realities that I was referring to are that a college education is expensive and expected to be self-funded. While non-discharagability makes it more practical to lend, it does not affect either of those underlying conditions! Instead, it just delays their realization, basically reinventing indentured servitude with college replacing the boat.
>>I was fortunate enough to be able to live with my parents.
Um, you added this as an afterthought, but it's by far the biggest expense. We're talking probably around $500 per month on average (if you live with others) plus utilities, not to mention food. So you were able to save around $1000 per month living with parents - and that's a conservative estimate.
