tag:blogger.com,1999:blog-5452025352696285200.post7979108352711335872..comments2024-02-23T04:59:26.907-05:00Comments on But I Did Everything Right!: Undue Hardship? What Does that Mean??? Where Can I sign up???Angelhttp://www.blogger.com/profile/07820446523257638689noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-5452025352696285200.post-20013923210341090792010-01-08T11:03:04.489-05:002010-01-08T11:03:04.489-05:00Are these the Jerry comments that I was afraid to ...Are these the Jerry comments that I was afraid to respond to?<br /><br />If so, I suppose I didn't because a) I didn't come back to this post, and b) I agree with Jerry and always have said so.<br /><br />I have, in every post where I've mentioned it, said that from this point FORWARD, student loan debt should be able to be discharged in bankruptcy. What I also said is that I don't think it should apply retroactively because those that took on that debt did so voluntarily.<br /><br />Of course the lenders were willing to shovel out more and more cash to students when they knew it was safe to do so. But those were the rules when they made the contract with the borrowers...you can't go back and change it on them after the fact because you don't like the consequences.<br /><br />I don't know how much clearer I can make this.<br /><br />Oh, and it also seems like this is where the X-Box comment started. Can't you see that I was referring to a potential student who borrowed money with the intention of filing for bankruptcy rather than repay it and not describing myself?<br /><br />Of course everyone hates me, because I'm providing a dose of reality here.<br /><br />DougAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-63380580643903201202010-01-07T22:07:35.866-05:002010-01-07T22:07:35.866-05:00Well. I can't say for sure. But I would assum...Well. I can't say for sure. But I would assume that student loans would fall into the same category as any unsecured debt (such as credit card debt). It's not when you entered the debt that governs, but when you file for bankruptcy. When you sign a student loan, the issue of bankruptcy is not addressed, so I doubt that there are contractual protections in place that address it. That's my basic understanding.Angel the Lawyerhttps://www.blogger.com/profile/07902928273488771301noreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-5172969423015895722010-01-06T20:51:20.639-05:002010-01-06T20:51:20.639-05:00So what about federal loans contracted for and spe...So what about federal loans contracted for and spent prior to 1998, or private loans contracted for and spent prior to 2005? Any arguments of ex post facto, bankruptcy as constitutional right?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-26682121087174368882010-01-06T10:16:14.508-05:002010-01-06T10:16:14.508-05:00Totally agree Jerry and Anon, 4:45 A.M. I wrote a...Totally agree Jerry and Anon, 4:45 A.M. I wrote about this very issue back in September. it's the education bubble and I can't wait for it to pop.<br />http://butidideverythingrightorsoithought.blogspot.com/2009/09/is-obama-perpetuating-education-bubble.htmlAngelhttps://www.blogger.com/profile/07820446523257638689noreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-6602138567138428582010-01-06T07:45:10.670-05:002010-01-06T07:45:10.670-05:00I agree with Jerry. If student loans are discharg...I agree with Jerry. If student loans are dischargeable, lenders are incentivized to limit their lending to students so that those students have little incentive to engage in the X-box scenario described above.<br /><br />Lenders are also incentivized to severely limit or even refuse loans for attendance at lower ranked law schools which do not offer much in the way of job prospects.<br /><br />These things are exactly what we want to have happen.<br /><br />Anyway, as Jerry alluded to, student loans are much more for the benefit of colleges than students. Because colleges have the ability to set tuition levels as to soak up all of the loans available to students.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-24601589700245474102010-01-05T17:03:07.450-05:002010-01-05T17:03:07.450-05:00Correction above: "there is absolutely no inc...Correction above: "there is absolutely no incentive for lenders NOT to lend as much as possible..."Jerrynoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-59398392058716636092010-01-05T12:03:47.542-05:002010-01-05T12:03:47.542-05:00No Doug, I don't think they "kind of have...No Doug, I don't think they "kind of have to make it difficult." From reading the law review article, you'd see that history has proven that students did NOT file bankruptcy en masse when it was available as an option. The lender lobby did a great job of scaring Congress into thinking it was a problem, though only one-half of one percent of student borrowers were filing soon after graduation.<br /><br />What bankruptcy protection for student borrowers DID do was keep schools and lenders honest. With lenders facing no threat of discharge and having their federal loans guaranteed by the government (where the lender actually makes MORE money when a borrower defaults), there is absolutely no incentive for lenders to lend as much as possible - and the result of that endless flow of money is that schools have no incentive to keep tuition reasonable/at parity with the inflation rate.<br /><br />Do you understand that, even absent any grants or scholarships, an undergrad could easily pay his/her entire way through school, including living expenses, just a couple decades ago? Asking someone to do that today, without grants, scholarships, or familial help, is just a laughable proposition. The reason that bankruptcy filing among college grads wasn't a problem then is because the loan burden wasn't NEARLY as much as it is today!Jerrynoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-84777230909234342072010-01-05T09:15:56.125-05:002010-01-05T09:15:56.125-05:00It is certainly a shitty situation to have massive...It is certainly a shitty situation to have massive debt, little/no income, and almost no way to discharge it.<br /><br />On the other hand, don't you think they kind of have to make it difficult (not as difficult as it is, mind you, but they can't make it easy)? If it were easy, then kids would just go to the most expensive school they could get into, sit around playing their X-box for a year, then file for bankruptcy to start from scratch. <br /><br />Who cares if it's a black mark on your record for 10 years (or whatever it is)...you're only 25!<br /><br />It's a tough situation...don't you think it started out with good intentions? Uneducated young people need an education but can't yet afford it because...they're uneducated! So you loan them the money to get educated, whereby they can pay off the loan and then make a high-ish salary that they get to keep all for themselves afterwards.<br /><br />Of course, lately we've been in a situation where it doesn't quite work. But it's a huge system...it will take time to adjust. It will adjust eventually, but, unfortunately, the current group is going to feel some pain until it does.<br /><br />I'm curious as to whether any economists have written articles on the student loan / bankruptcy issue. Know of any? I would be very interested to read what kind of solutions they propose (not for the future borrowers, as the rules should be changed now so both the lenders and the borrowers go into it knowing that the debts can be discharged) for the people that got caught in this bubble.<br /><br />If there are any articles, books, etc. out there, let me know!<br /><br />Doug<br />tobeajd.blogspot.comAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-8963745624925089322010-01-04T23:27:00.650-05:002010-01-04T23:27:00.650-05:00me thinks attorneys will become homeless and live ...me thinks attorneys will become homeless and live on street corners in the USA, not in Costa Rica.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-46482009714451728322010-01-04T22:15:44.867-05:002010-01-04T22:15:44.867-05:00I've never gotten the logic behind nondischara...I've never gotten the logic behind nondischarability. Bankruptcy exists specifically to help losers. And I don't mean that in a personal sense, but financial losers, who need to get a fresh start so they can do something else. Many make it in law, some don't, and locking those that don't to their loans keeps them from doing something else. <br /><br />It is an unmitigated social good to allow flexability after making a bad, even really bad, choice - whether starting a business of pursuing an education that didn't pan out. Our government and society is truly f-ed. Dubai-lite here we come.<br /><br /> Costa Rica can expect a surge of American ex pat lawyers.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-22327435927376498852010-01-04T22:08:49.067-05:002010-01-04T22:08:49.067-05:00Unfortunately, the loan forgiveness for teachers o...Unfortunately, the loan forgiveness for teachers only applies to Stafford loans and it looks like it is capped at $17,500 (and only $5,000 if you're not a SpEd, math, or science teacher).<br /><br />Alas, it almost got my hopes up for a minute.<br /><br />http://studentaid.ed.gov/PORTALSWebApp/students/english/cancelstaff.jspEsq. Neverhttps://www.blogger.com/profile/18248019550876835145noreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-90826638391880105332010-01-04T15:32:39.432-05:002010-01-04T15:32:39.432-05:00So, are you a solo? Are you abandoning the practi...So, are you a solo? Are you abandoning the practice altogether to be a teacher?Angelhttps://www.blogger.com/profile/07820446523257638689noreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-33899300985301427112010-01-04T14:04:42.742-05:002010-01-04T14:04:42.742-05:00Right now I scrape together barely enough to eat r...Right now I scrape together barely enough to eat ramen noodles by helping people who are financially far healthier than I am to file bankruptcy. <br /><br />That said, there is ONE potential way out for some people that I've seen - five years as a teacher in a qualified low income area school grants a student loan discharge. It's what I'm looking into now as my "Last Resort Move." Yes, it's not law - that's why it may be possible to actually get lower middle class level employment. Combine this with income-contingent repayment programs. Most of us do not have a teaching credential (I don't), but most states have alternate programs to credential grads. I do not know off the top of my head if this helps with private loans though - mine are all federal, and they do qualify, at least. Do not try this in California - there are no teacher gigs here; but there are about 40 states in which this may still be viable.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5452025352696285200.post-86670072038141510262010-01-04T13:39:59.663-05:002010-01-04T13:39:59.663-05:00Great post, Angel. It would be nice if Obama and C...Great post, Angel. It would be nice if Obama and Congress cared more about Americans than banks. I know a few lawyers who are seriously considering leaving the country so they don't have to pay their loans back.JJDhttps://www.blogger.com/profile/13336399876642935513noreply@blogger.com