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  1. #1 Why isn't student loan debt dischargeable through bankruptcy? 
    eeeevil Sith Admin SarasotaRepub's Avatar
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    Teh Stupid!!!



    Mon Jan 7, 2013, 12:09 PM
    white_wolf

    Why isn't student loan debt dischargeable through bankruptcy?

    I'm just wondering what the rationale behind this is. Do you all agree with it or do you think it should be discharged if a person declares bankruptcy? Honestly, I think it should. Declaring bankruptcy isn't something that is done lightly and if the person is in a bad enough position financially to have to do so then they aren't in a position to pay off any debt obviously.
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  2. #2  
    Junior Member Moby's Avatar
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    These folks always think this stuff AFTER they getthe money.
    Behand they agree to all the rules.
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  3. #3  
    Power CUer NJCardFan's Avatar
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    If you are able to claim student loans in bankruptcy then you forfeit your degree and cannot use your college experience in seeking a job(i.e. level of education must end with high school).
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    Senior Member Zeus's Avatar
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    When debt to the govt becomes dischargeable under bankruptcy then April 15th becomes the ultimate tax holiday.
    The 21st century. The age of Smart phones and Stupid people.

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    Senior Member LukeEDay's Avatar
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    The main reason student loans aren't on a bankruptcy is because they are government insured. So the bank will get their money whether you pay it or not. There is, also, currently a push to add student loans to bankruptcy. Current statistics show that they are the biggest burden on a person. Then when you major in Art History; it is no wonder you can't find a job making above minimum wage.

    Something they already have is loan forgiveness. The way that works is that if you work for the government sector; ie, school teacher or a government agency for 10 year, and make all your loan payments on time, they will forgive the rest of the debt regardless of how much you owe.

    Also, they are structured to go along with your pay scale now. They will base the payments on how much you make. And if you make under a certain amount, your payment will be $0.00 ....

    So those morons can shut up now.


    [edit] I can tell you one thing. If they do add student loans to bankruptcys, the lines will be huge and bankruptcy lawyers will be making a lot of money. [/edit]

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    LTC Member Odysseus's Avatar
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    Quote Originally Posted by LukeEDay View Post
    The main reason student loans aren't on a bankruptcy is because they are government insured. So the bank will get their money whether you pay it or not. There is, also, currently a push to add student loans to bankruptcy. Current statistics show that they are the biggest burden on a person. Then when you major in Art History; it is no wonder you can't find a job making above minimum wage.

    Something they already have is loan forgiveness. The way that works is that if you work for the government sector; ie, school teacher or a government agency for 10 year, and make all your loan payments on time, they will forgive the rest of the debt regardless of how much you owe.

    Also, they are structured to go along with your pay scale now. They will base the payments on how much you make. And if you make under a certain amount, your payment will be $0.00 ....

    So those morons can shut up now.


    [edit] I can tell you one thing. If they do add student loans to bankruptcys, the lines will be huge and bankruptcy lawyers will be making a lot of money. [/edit]
    And, nobody will be able to get one. The initial push will be to have the government pay back the loans, but the government is already overextended, so it will end up having to borrow in order to pay them off. That means that it will eventually end up either shutting off the spigot, or coming up with new revenue schemes, such as inflationary policies, which can make loan repayment easier, but that ends up screwing over everybody.

    Loans are based on the risk to the lender. If student loans become uncollectable, then the lender has to mitigate the risk by raising the interest rates, eligibility requirements and collateral requirements. Right now, rates are kept low through the federal guarantees, and pretty much anyone with a pulse and a GPA above zero can get one. This, of course, has led to all manner of inflation of tuition, not to mention a glut of useless degrees. Come to think of it, the declared major and GPA will probably become factors. A student with a 4.0 in pre-law or engineering is a much better risk than a student with a 2.0 in Womyn's Studies.
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    Power CUer NJCardFan's Avatar
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    As I said, if you declare your student loans in bankruptcy, you should have to forfeit your degree. Seems fair considering if you claim your car loan you forfeit your car.
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    Power CUer noonwitch's Avatar
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    I was lucky to have gone to college in the days when middle class parents could afford to send their kids to college. I didn't need any loans, thankfully.


    College is ridiculously expensive, even to attend a second-rate state university like I did. Kids wouldn't be saddled with so much loan debt if the tuition was not so high.
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    SEAduced SuperMod Hawkgirl's Avatar
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    Quote Originally Posted by NJCardFan View Post
    As I said, if you declare your student loans in bankruptcy, you should have to forfeit your degree. .
    It's exactly what happens now. My neighbor took out student loans to pay for her Chiropractic degree. Somewhere along the line, she decided to stop working and stopped paying her loans. She claimed she was disabled due to a back injury...which is BS...BUT, she can no longer practice in her field. She CAN go back to practicing, but she will have to start paying, which she won't. So, she's now a high school teacher with an MD degree who defaulted on her student loans.

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    LTC Member Odysseus's Avatar
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    Quote Originally Posted by Hawkgirl View Post
    It's exactly what happens now. My neighbor took out student loans to pay for her Chiropractic degree. Somewhere along the line, she decided to stop working and stopped paying her loans. She claimed she was disabled due to a back injury...which is BS...BUT, she can no longer practice in her field. She CAN go back to practicing, but she will have to start paying, which she won't. So, she's now a high school teacher with an MD degree who defaulted on her student loans.

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    Or the rigorous demands of the education profession.
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