Student Debt Lawsuits Are a Lucrative Business
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Re: Student Debt Lawsuits Are a Lucrative Business
#2I suspect these guys are not the only debt collectors operating this way, but the whole thing is shameful. Talk about an industry crying out for more stringent regulation.
Re: Student Debt Lawsuits Are a Lucrative Business
#3It is remarkable that you cannot declare bankruptcy from student debt. We have essentially decoupled the price of college from the expected return.
Re: Student Debt Lawsuits Are a Lucrative Business
#4It is remarkable that you cannot declare bankruptcy from student debt. We have essentially decoupled the price of college from the expected return.
The other side of it is everyone qualifies for a loan. So there's an enormous amount of risk associated with it and the interest rates do not reflect that risk.
It's difficult to loan 18-year olds money as they tend to lack income and credit worthiness and it's also unreasonable to expect an 18-year old to really understand the future debt they are setting themselves up for.
Re: Student Debt Lawsuits Are a Lucrative Business
#5It is remarkable that you cannot declare bankruptcy from student debt. We have essentially decoupled the price of college from the expected return.
If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were given the option. Since a degree is not tangible, there is nothing to secure it with, they can't foreclose on your education like they can a piece of property. Without anything to secure it, there would be 0 market for college loans except for the privileged who can pay out of pocket for their education. IMO the only way to solve it is to put the school on the hook for part of the $$ if the default rate exceeds X%. Then it forces the school to look at costs, as well as expected outcomes of the program. At the end of the day, maybe giving an 18 year old 120k to study underwater basket weaving for 4 years is not the best investment of money?
Re: Student Debt Lawsuits Are a Lucrative Business
#6Slavery is illegal.
Letting people enslave themselves however is not.
An indentured servant or indentured laborer is an employee (indenturee) within a system of unfree labor who is bound by a signed or forced contract (indenture) to work for a particular employer for a fixed time. The contract often lets the employer sell the labor of an indenturee to a third party. Indenturees usually enter into an indenture for a specific payment or other benefit, or to meet a legal obligation, such as debt bondage. On completion of the contract, indentured servants were given their freedom, and occasionally plots of land. In many countries, systems of indentured labor have now been outlawed.
When you are enslaved by the monetary system... well... You made that choice
Re: Student Debt Lawsuits Are a Lucrative Business
#7It is remarkable that you cannot declare bankruptcy from student debt. We have essentially decoupled the price of college from the expected return.
If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were gi…
Or alternatively, you could make sure there's an affordable public option for university level education for qualifying students, to avoid the need for a loan in the first place. It was feasible before, and I'm sure there isn't any non-political reason why it'd be impossible now.
Re: Student Debt Lawsuits Are a Lucrative Business
#8I suspect these guys are not the only debt collectors operating this way, but the whole thing is shameful. Talk about an industry crying out for more stringent regulation.
Is it more shameful than the colleges and universities that push students to taking out these loans (calling them "financial aid") knowing full well what waits them on the other side?
Re: Student Debt Lawsuits Are a Lucrative Business
#9I'm rarely one to advocate for legislating solutions to problems but forcing schools be responsible for more of the communication with student/customer/debtor when it comes to loaning money, collecting payments and handling defaults would really cut down on the number of student loans that aren't paid back on schedule.
If the school is responsible for the overhead cost of that communication they will have a strong incentive to make their students capable of paying back their loans or accessing the various deferment/income based repayment options in order to avoid the cost of collections.
A work study student who hates their minimum wage job will be a lot more helpful to a debtor who received a payment due and is calling the 1-800 number on it because they are confused than some random person in a call center that's an Nth level subcontractor for some bank that owns the debt.
A work study student who hates their minimum wage job will be a infinity more helpful to a debtor who is in default and is calling the 1-800 number on it because they are confused than some random person in a call center who makes a commission based on how they handle the account in question.
If the school was responsible for the cost of communicating with the debtor a lot fewer loans would make it into default in the first place.
Re: Student Debt Lawsuits Are a Lucrative Business
#10Earlier quoted context omitted.
If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were gi…
Or alternatively, you could make sure there's an affordable public option for university level education for qualifying students, to avoid the need for a loan in the first place. It was feasible before, and I'm sure there isn't any non-political reason why it'd be impossible now.
The percentage of the population that enrolls in college has increased dramatically, so a given level of individual support has become more expensive in total.
(I don't mean the above to really try to address whether it is feasible, just to point out that the situation has changed)