How bankruptcy could help solve the student loan crisis

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  • jayb1977 Bartlett, IL
    Dec. 30, 2013 8:46 a.m.

    There should be regulations in relation to these loans. I have 5 different student loans, 2 federal and 3 private. The private were pushed upon me by the school I attended. As a 36 y.o. trying to provide better for his family I didn't have much choice than to accept these in order to complete school. Now the degree I have is just about useless in this economy. I cannot keep up with the payments they want as well as provide for a wife and 3 kids. I understand having to prove a hardship, with the private loans being set at 16.75% interest there is no way I can pay for a house, vehicles, daycare, school tuition etc. There needs to be some, repeat, some reform to the bankruptcy laws to not make it simple, but to make it a little easier to prove a hardship for these loans. Maybe if more people are able to prove hardships then schools and lenders will earn that the cost and the interest rates are just way too high. Right now with bankruptcy as difficult as it is they have no way of being stopped because there are no repercussions.

  • mykal28 Columbus, OH
    Dec. 11, 2013 8:12 a.m.

    I worked while i was in college getting a good degree (not a worthless one), but i had to pay my own rent and other adult responsibilities because i didn't have rich parents who could baby me right out of high school. The funny thing is my mom paid taxes and was a productive member of society it just wasnt enough.

    FYI for anyone who is a racist: I am white and i pay taxes and so does my mom i've collected unemployment a few times in my life for being laid off, but other than that i don't leech off the system. All i want is a lower interest rate on my loans (like 2 percent) so i can actually pay the things off. My interest rate is anywhere from 4% to 8% depending on which loan as i have like 15 different ones *Sigh*

  • jcarman Alexandria, VA
    Oct. 4, 2013 7:41 a.m.

    Dan Austin, who is quoted several times in this article, has just co-authored a book on this subject called Graduating with Debt: Student Loans under the Bankruptcy Code. It is one of the first books to provide an in-depth analysis of the issues surrounding the discharge of student loan debt through the bankruptcy process.

  • george of the jungle goshen, UT
    Aug. 25, 2013 8:42 a.m.

    You can lead a student to collage but you can't make them think. Collage is an expensive place for entertainment.

  • NedGrimley Brigham City, UT
    Aug. 24, 2013 7:25 p.m.

    One more "entitlement" in the making. ...

  • lost in DC West Jordan, UT
    Aug. 24, 2013 3:37 p.m.

    BO is ALMOST making sense. There is federal funding going to colleges, tie it to something measurable that is beneficial to society. Schools cost too much and/or do not produce qualified students? give them less or no federal money.

    But DO NOT let those who have already borrowed, many to satisfy their curiosity or entertain themselves rather than to become productive members of society, get out of paying back what they borrowed.

  • AZ Cougar Gilbert, AZ
    Aug. 24, 2013 12:07 p.m.

    I know.... how about the federal government gets out of the education business all together? Let states decide what degrees would benefit their industry and give loans to people who will actually have enough income to pay them back when they graduate.

    Giving $50,000 to a French poetry major is just a stupid loan. No bank would ever make it without a rich parent guaranteeing the debt. But the government hands them out like candy, creating a huge increase in demand for worthless college degrees. And the universities keep raising their prices to match the demand....duh!!

    But, I guess everyone has a "right" to get a degree in whatever field they choose and the evil rich people (a.k.a. those of us who pay taxes) need to pay for it.

  • Brahmabull sandy, ut
    Aug. 24, 2013 11:26 a.m.

    Yeah lets just forgive the debts of the students who chose to go to expensive colleges and refused to work during that time to pay for it. Good idea. In the meantime how about forgiving all home loans too - just write them off and don't make people pay them back, oh and they get to stay in the homes. Does that sound fair? If they file bankruptcy on student loans, all credit for going to the school should be wiped off. Fair is fair. If you don't pay for it, you don't get to keep it.

  • Arm of Orion Cottonwood Heights, UT
    Aug. 24, 2013 10:36 a.m.

    Seriously the whole reason why student loans are the way they are now was because back in the 70s and 80s students were taking out loans racking up huge debt and then discharging them through bankruptcy. This would kill the economy and hurt education in ways that would be nearly irreversible. This law is asinine.

  • DN Subscriber Cottonwood Heights, UT
    Aug. 24, 2013 8:31 a.m.

    While bankruptcy may help the borrowers, it certainly does nothing to help our country which is subsidizing and guaranteeing the absurd number of student loans.

    THe federal government is on the verge of bankruptcy, but that will not help anyone.

  • FDRfan Sugar City, ID
    Aug. 24, 2013 8:02 a.m.

    The current law is a very good indication of what a Joe Biden presidency would be. He is the proud author of it.

  • KDave Moab, UT
    Aug. 24, 2013 7:32 a.m.

    The negatives of allowing bankruptcy. Higher interest rates, collateral requirement (mom and pops home). fewer loans available. There is no free lunch.

  • katy salt lake city, ut
    Aug. 24, 2013 7:31 a.m.

    This is so unfair to those students who worked so hard while getting their college education. Many students worked at least part time while attending school and paid some or all of their college tuition. They also worked hard during the summer months so they wouldn't have so much school debt after they graduated. Many responsible kids chose colleges with lower costs so they wouldn't have to take out massive loans.

    In the future is the government willing to pay total college costs for everyone that wants to go to college so they won't have these debts. Or do the students rack up big debts knowing they can take out bankruptcy after they graduate?