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White House Backs Bankruptcy Option for Some Student Debt
Wall Street Journal ^ | July 20, 2012 | By JOSH MITCHELL

Posted on 07/20/2012 4:01:31 PM PDT by Oldeconomybuyer

The Obama administration urged Congress to make it easier for people to discharge a portion of certain student debt by filing for bankruptcy protection.

The recommendation, in a report by the Education Department and the Consumer Financial Protection Bureau, wouldn't affect the vast majority of student debt, which is issued by the federal government. It would apply only to the roughly $150 billion, or 15% of total outstanding student debt, issued by private lenders such as SLM Corp.'s Sallie Mae and Wells Fargo & Co.

Consumer bureau chief Richard Cordray said Congress should consider modifying a 2005 law that, except in rare circumstances, prohibits discharging private student loans through bankruptcy.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Government; News/Current Events; Politics/Elections
KEYWORDS: doddfrank; obamanomics; studentloans
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To: Repeal The 17th

Wow. I am sorry to hear your son made those decisions. You may not like my reply, so feel free to tell me to take a walk. I have not been in your son’s situation, but I have made mistakes; and I (as all Christians), have been humbled and saved.

What he did is a textbook example of folly. He did it; no one else. The solution is for your son to go Dave Ramsey on his debt. It will be a difficult and miserable period. He is free to contact the holder of the debt and work out a settlement schedule, if possible. Maybe they will agree to a lower amount.

But if he does go Dave Ramsey, in full, I know he will (a) pay off the debt sooner than one thinks, (b) learn character and financial lessons that will benefit him for the rest of his life, (c) be able to teach others from his mistakes, and (d) know that for the rest of his life no one on the planet can take away his self worth and confidence, no matter what.

Or he can vote for Obama. His life, his choice.


41 posted on 07/20/2012 6:16:11 PM PDT by Stat-boy
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To: Oldeconomybuyer

A couple of things to keep in mind here:

1) Just about all other deadbeats get off without paying, so it does get difficult to understand why these losers shouldn’t get a free ride also.

2) Keep in mind that ANYTHING this clown proposes will add to the national debt, so if these loans are forgiven guess who has to pay them back (and no, not the taxpayers, but their kids and grand kids).


42 posted on 07/20/2012 6:16:41 PM PDT by BobL
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To: BobL

What if we really let the free market work? For example, a top student gets a loan for a mechanical engineering degree at a top school at low interest. A high school dropout, if they can get one at all, pays a lot for a loan to get an English degree, less for something practical and doable.

The loan underwriters would get to see your school records (acedemic and diciplinary), and any community or work records. Maybe young people would get the message that actions have consequences. Maybe it’s just too late.


43 posted on 07/20/2012 6:29:07 PM PDT by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: The Antiyuppie

“Maybe young people would get the message that actions have consequences. Maybe it’s just too late.”

Yea, you slipped up BIG TIME. There is no way that this government will do ANYTHING at all to cut down on the useless degrees. They will MAKE CERTAIN that people will continue to get paid to get useless degrees.


44 posted on 07/20/2012 6:41:16 PM PDT by BobL
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To: BobL

“Keep in mind that ANYTHING this clown proposes will add to the national debt.”

Worth repeating - but when is the last time you heard a Democrat politician publicize a proposal to SAVE money?*

* (unless it involved cutting the military).


45 posted on 07/20/2012 6:46:13 PM PDT by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: Zhang Fei
Should have made it clear ~ if you cannot discharge a debt through bankruptcy it should be marketable at much closer to the rate for a collateral lone than it currently is.

4% with collateral ~ actually you can get mortgages for less but given the amount of equity you need to have the actual rate (since you won't be earning interest on that equity) is nearer 4%.

46 posted on 07/20/2012 6:54:06 PM PDT by muawiyah
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To: Oldeconomybuyer

“The recommendation, in a report by the Education Department and the Consumer Financial Protection Bureau, wouldn’t affect the vast majority of student debt, which is issued by the federal government. It would apply only to the roughly $150 billion, or 15% of total outstanding student debt, issued by private lenders such as SLM Corp.’s Sallie Mae and Wells Fargo & Co. “

See above, where this is coming from. The Coffee Server Puppet not close to any brains making up these recommendations.

Inside bureaucratic-fascism, just like what’s coming with Extortion-Care.


47 posted on 07/20/2012 7:04:13 PM PDT by Varsity Flight (Extortion-Care is the Government Work-Camp: Arbeitsziehungslager)
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To: Stat-boy
Student loans used to be dischargeable. A debtor couldn't file on them until at least seven years and six months expired after the last student loan was made.

The rates charged to students were still very favorable.

48 posted on 07/20/2012 7:20:13 PM PDT by CharacterCounts (A vote for the lesser of two evils only insures the triumph of evil.)
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To: DallasDeb
When were your loan debts made? Have you compared the costs of when you got your education to the costs now? I don’t care how many jobs a student must work to pay their college costs—there’s no way they can work/earn enough to pay for college any more.

1985/89. Well, I guess you do have a point. I know one guy who is in debt, or will be, for $160,000 but until he finds his dream job, he works at an auto parts store. I do agree on that point where good jobs are not as easy or plentiful as they were 10 years ago or even 5. If he cannot find what he's looking for, he might as well roll over and say, "uncle."
49 posted on 07/20/2012 7:20:48 PM PDT by Nowhere Man (June 28th, 2012, the Day America Jumped The Shark.)
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To: CharacterCounts

“Student loans used to be dischargeable.” Yes, that was almost 40 years ago, and the laws have changed continuously since then.

Prior to 2005, student loans from gov or from a non-profit were not dischargeable. That’s where the lower rates came from [from Congress-a/k/a tax dollars]. Post 2005, loans from for profit entities (a/k/a banks) also were not dischargeable.

But back in the 70s, 80s, and 90s, student loans were dischargeable after a certain period of time (you mentioned 7 years) if they had been in payment during that time. I may have the details wrong, but this case was intended to capture a student who paid for a number of years and then had some unexpected hardship; it was designed to prevent a student from racking up big loans and declaring BK soon after graduation. Of course, remember that these loans were primarilly gov programs (or a non-profit) and that tuition was not outrageously high.

Public school tuition is way too high these days. I have a bunch of kids, and this is something I watch carefully. U. Texas is about 10K a year tuition for an in-state student! 25 years ago it was about 500 per year tuition. Heck, back then one did not need big loans to attend a public university—a part-time job during school and summer jobs could just about cover the entire thing.

In fact, I remember that it used to be rare for anyone to have large student loans, except for those who just graduated from medical school.


50 posted on 07/20/2012 8:13:55 PM PDT by Stat-boy
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To: Oldeconomybuyer
I see a problem with changing the rules in the middle of the game...change for the future is one thing, going back is another. How can a business make contracts when the govt willy nilly can change the terms down the road?
How would someone who struggled to pay back the loans feel about others getting a way out?

There is no rule of law currently in the USA it is flexible depending on the politicians latest whim. Disgraceful.

51 posted on 07/21/2012 12:14:10 PM PDT by rolling_stone
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To: Oldeconomybuyer
Owebama: Bankrupting the world, one step at a time. (One big step for my reelection, one small step for communism.)
52 posted on 07/22/2012 1:06:57 AM PDT by tdscpa
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To: Repeal The 17th

I agree with you completely.


53 posted on 07/23/2012 1:30:38 PM PDT by Made In The USA (Can we cut the BS and just say it like it is?)
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