Posted on 10/27/2012 6:50:47 PM PDT by SeekAndFind
Cyndee Marcoux already was stretched thin, thanks to the $80,000 in student loans she racked up after getting divorced and going back to school a decade ago. Her breaking point came in 2010, when her daughter defaulted on student-loan payments of her own.
That's because Ms. Marcoux, a 53-year-old library administrator in Seekonk, Mass., co-signed for about $55,000 of her daughter's loans. When the daughter was unable to keep making payments, Ms. Marcoux was on the hook—a burden that forced her to reshuffle her entire life. To scrape up the extra $550 a month she owed, she sold her house, then took a second job registering emergency-room patients on the weekend overnight shift. "You work your whole life and never pay a bill late," says Ms. Marcoux. "You don't ever think your kid isn't going to pay."
After years of facing all sorts of financial pressures they never expected, from adult kids moving back home to their own parents needing help to retire, empty nest parents are struggling with a new headache. Thinking it was only natural to want to help children and grandchildren, many co-signed student loans. Now, they're becoming the latest victims of the nation's mounting problem with student-loan debt, which surpassed the $1 trillion mark last year.
At a growing rate, young graduates who are either out of work or who didn't land high-paying jobs find themselves unable to pay their loans. When primary borrowers stop paying, co-signers are expected to pick up the tab—and soon find themselves fending off debt collectors. "People are confused about what it means to co-sign, and their ongoing obligation," says Deanne Loonin, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, a consumer-advocacy group in Boston. "When they come to understand that they are equally liable,
(Excerpt) Read more at online.wsj.com ...
Now government will be asked to mediate whether the terms of a private contract should be changed post-facto? So the government should intervene and void private contracts so that the “deserving” (we will wait for you to define who “deserves” or not) can stiff a private lender?
People borrowed money back then knowing that they could go to prison if they did not repay their debt. So anyone who borrowed money under that arrangement and went to prison for not repaying their debt deserved to go to prison. Whether they actually did or not is irrelevant. The fact that some people got off because the government changed the laws did not mean they did not deserve prison.
How is being required to repay a loan you agreed to a “perpetual fine”. Loan repayments are not “fines”.
The government is the only legal confiscastory muscle that there is and is the only entity that can legally compel action via the threat of force. Debtors prison was a way of discharging debt and reinforced the idea that breeching a contract and not repaying a debt is stealing.
So honoring an agreement, and in the case of a student loan a written contract, that you make is just a matter of changing mores? If mores change then its ok not to pay? So all we need is enough people to agree that student loans shouldnt be repaid and they no longer need to be repaid?
To create dependency and control. And make their buddies wealthy. As usual.
Still don’t want to say why that’s any different from how people “deserved” to go to debtors prison?
“The financial applications have to go through the Federal govt. now,”
We have a son going off to college next year and just doing the applications now. I was wondering about the financial stuff. So it sounds like I can’t just take out a regular loan? (Which if things did go REALLY bad it would be covered under bankruptcy). Although I’m guessing that the “student” loans have lower rates?
But yeah - what a scam. And it WILL fall apart some day, but with my luck it will be the year after all my kids graduate. It is just like the real estate boom and crash. All built on the promise of free and easy money.
You typed so anxiously and hastily that you misspelled “confiscatory.”
What kind of agreement is conscionable to enforce is indeed a matter of changing mores. None of these kinds of loans would have even been possible under the supposedly harsh Old Testament, by the way. You could get stoned for sodomy or fornication -- yet loans were temporary and there was a jubilee year every 50 years. Do you think God knew something you don't?
Student loans are another way to become subservient to the government. Don’t go to college unless yu can afford it or know For Sure you can pay any loans back. And you can’t be sure, usually.
One good thing to do with student loans, when you are sending a child to college: make them get out a small amount of student loans but still something they would feel, like maybe $10k. (Obviously do not cosign.). Tell them if they work hard and do well and finish, you will pay off these loans. If they don’t, they are on the hook.
Great idea - thanks!
There is no single size fits all formula. And I might point out that by your own light and formula you are calling to threaten less than successful progeny with becoming subservient to government....
One does not need a boutique university for most pursuits that require or are enhanced by higher education. The overselling of such boutique universities is a large part of the problem.
We saw how millions of mortgage agreements and notes, through several twists and turns by various parties with and without direct interest, became a financial and political armageddon. That one is still an ongoing tangled mess.
Now with student loans, we also have several parties with interest.
There is a student, who borrowed money to pay for a product (an eduction). There might also be a parent who co-signed for the loan who has an interest.
There is a college, or some such, that supposedly provided the education. In contract law, I do remember something about an "implied warrant of merchantability" for a product or service. This is a critical point that should be, and probably will be, a focal point of such discussions in these likely upcoming cases.
There is a primary lender, who originated the loan, and who received some fees for the origination and processing. There might be other financial parties who bought the loans from the originating lender. And there are probably some sort of derivative markets for packages of such loans, just as happened with the questionable mortgage loans.
There is a government entity, or several, that have interest by way of guaranteeing repayment of the loan to the lender(s), and by way of certifying educational instutions as worthy of providing the product/service in question.
Then there are the politicians who passed legislation creating and tailoring these "guaranteed student loan" programs.
As with the housing fiasco, there is also the element of unrealistic price inflation far beyond the norm, for a product quality that has diminished with each passing year. There are literally millions of students with degrees for which there is no marketable demand. Yes, some of them made stupid choices. I remember also some bizarre terms like "comparative negligence", "contributory negligence", "gross negligence", "vicarious liability", and all kinds of "malpractice" which would certainly apply to most of the educators, advisors, and administrators of academia.
My point is that the student loan fiasco and the education fiasco are possibly more complex than the mortgage loan fiasco, and just as riddled with corruption, even if the amounts are not as great.
I actually did much better in typing and spelling back then.
The real problem is that “higher” education is way more expensive than it should be. How much does it really cost, per student, for an instructor to stand in front of a group of students and guide them through a textbook? I’d venture to say that it’s a pretty small fraction of what kids are paying for tuition these days. But with the near-monopoly that colleges enjoy, there’s no competitive pressure to keep costs in check.
How does one not know what co-signing a loan means? It’s self-explanatory!
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