Posted on 02/09/2012 12:29:04 PM PST by Oldeconomybuyer
(MoneyWatch) Student loan debt is pushing a growing number of Americans into bankruptcy and an organization of bankruptcy lawyers predicted this week that the college debt problem could become as big a catastrophe as the home mortgage crisis.
"Take it from those of us on the frontlines of economic distress in America, this could very well be the next debt bomb for the U.S. economy," warned William E. Brewer Jr., president of the National Association of Consumer Bankruptcy Attorneys.
The association just released a survey of 860 bankruptcy attorneys that revealed some disturbing trends. Here are some of the most troubling ones:
More than four out of five bankruptcy lawyers say that the number of potential clients they are seeing with student loan debt has increased in the recent years.
Twenty-three percent of bankruptcy lawyers have witnessed cases involving student loan problems jump from 50 percent to 100 percent in the past three to four years. Another 39 percent of the attorneys have seen their potential client cases increase 25 percent to 50 percent in the same period.
(Excerpt) Read more at cbsnews.com ...
i didn’t know you could declare bankruptcy for student loans.
If you or I did what the Universities do we would be jailed for fraud. They get these kids in, work hard to separate them from parental influence and then push loans on the kids.
My son is in college and the blatant lies he gets told are amazing.
“Colleges make a lot of money off people getting worthless degrees.”
Yes they do. And they give the money to kids with no strings attached. The kids can use it for ANYTHING they want.
I read yesterday where a SSgt Law Enforcement Officer in Nevada was making $95,000/yr, and with over-time was clearing over $109,000.
I’m an Electrical Engineer with 22 yrs experience. I’ve faced layoffs more times than I care to count. Been down-sized, had companies fail, out-sourced and have had to move 3x in the past 10 years, just in order to find a job. Sold each house at > $20k loss.
This officer (who beat a citizen who was in an a Diabetic shock) not only gets paid more than I do, but has had the tremendous opportunity of having continuous employment, a retirement and able to live in the same community for 20+ years. Even after being video taped beating this innocent man - still has his job.
Screw the education .... I’d have been so much better off getting a job and living of the Gov’t largess.
This is the Bubble scam that the government has been using to push up the credit markets.
I don’t know what this article is talking about, but student loan debt that is guaranteed by the federal government can not be discharged in a bankruptcy.
I don't think you can be excused for any federal debt. (IRS etc) However if you are unable to pay debts and declare bankruptcy you can have the other debts excused, leaving enough to pay off the student loans.
I could be wrong. . . .
Once 50.01% of the electorate agrees with the proposition that “the government should forgive my student loan debt” it will happen.
how about a means test for institutions?
If their endowments can fully fund tuitions for students why are they indenturing students?
I met a guy a couple months ago. He was retired military, then retired from govt agency.
Now on social security. He was bragging about his 3 govt checks. All while insulting small business owners.
Should have put it off. You are going to be MAD when obama forgives all student loans to win the student vote.
By knocking off the top 25 grand saves you about 100 to 125 grand in interest over the next thirty years. You’ll probably knock a couple hundred dollars off you’re monthly payments.
That’s only in two years and working one job. If you bear down and work as much as possible and do it for the next 5 years, you’ll probably knock the whole thing off, no matter the amount.
I suspect a lot of the students who have a lot of debt weren’t serious students. They didn’t study as hard and took longer on their course of studies than most.
A person with a student loan can indeed declare or be forced into bankruptcy, but the student loan cannot be discharged in the settlement unless the lender agrees. Student loans are the modern equivalent of indentured servitude.
Obama can't do it alone, he'll need help from his closest ally in Congress, Crybaby Boehner.
if that is the case then the defaults should attach to the endowments and assets of the university.
they should bear the brunt of junk degrees.
What about the textbook scam that I mentioned? This isn't a matter of someone "willing" to pay for the professor's outrageously overpriced book - they're told they MUST buy the book in order to pass the class.
Im taking on $50,000 in debt. But plan on repaying it..
$16,000 to go. I’ll have it paid off by the time I’m 20 years out of school.
Two separate issues involved.
The textbook “scam” doesn’t cost nearly as much, like off by orders of magnitude, as the tuition “scam”.
There may be a place (arguable) for government intervening in institutionalized abuse of customers. Serious Constitutional issues aside, supply and demand again intervenes to solve the issues, albeit sometimes slowly. Students borrow/share books, Internet sales improve access to used books, copying proliferates (may be illegal, but it’s still supply-and-demand solving the problem), and of late Apple et al have made huge strides at rocking the foundations of the textbook market.
Like tuition, textbook prices rise because students pay the price. They complain, but pay. It’s part of the total cost of the package, which everyone has a choice to pay or find alternatives. When enough find alternatives instead of paying the high price, that price will drop; so long as enough pay up, so will the price.
Comes back to: education, in modern times, is free. It’s the certification which is expensive, and there are career paths which do not require certification (and which are probably better for the graduating student, like starting a business).
“The sad part is that most of those with student debt would pay it off if they could, but they graduate from over-priced colleges and in the 0bama Depression can’t find jobs, or have to settle for much lower paying jobs.”
I think many can’t even get low-paying jobs; in my area they seem to be set aside for non-English speakers or young whites with facial piercing and tattoos who probably don’t cost much.
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