Bravo America!!!
Build on this!
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Or call it odious and just not pay.
We donât live on bread borrowed from the future.
Debt is bullshit.
Once I perfect these shock collars⌠youâll all see what I mean.
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Or (c), just not spend so much on military shit?
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I donât blame you. I think the original post is a bit sensationalistic.
The loan here was a âbar loan.â This is a loan that a student can get after they graduate to cover their short-term living expenses while they study for the bar (which typically takes a few months). The loans are only available to law students, but that doesnât make them educational loans.
The theory is that the students will pass the bar, start practicing as an attorney, and they be able to repay the loan. So yes, technically, itâs only available for law students (or recent graduates), but that doesnât make it an âeducationalâ loan.
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So, uhm. Could you take out normal loans, dump that money into paying off your student loans, and then file for bankruptcy?
Youâd have to be very sneaky about it. Usually when you go to borrow money they ask you why you are borrowing it, and then when you say, âTo pay back another loanâ they say, âNo money for you.â Also, taking a loan with the intention of declaring bankruptcy would be fraud, and thatâs probably the kind of fraud that the criminal justice system punishes.
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On further reading, it sounds like this is specific to prepping for and paying to take the bar exam. I donât know if that makes it more of a âstudent loanâ or less of one but could see how a judge would consider this basically beyond the âschool loanâ although the schools are involved in facilitating them. These are in the $10K range. http://hls.harvard.edu/dept/sfs/bar-exam-loan-information/
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Which makes sense why the judge could declare it not a âstudent loanâ. It is a personal loan, since it covers living expenses, not tuition. There is a huge deal of collusion between the schools and lenders on these as well and the rates are by their nature predatory.
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I donât understand why youâre criticizing Cory Doctorow. He introduces the salient subject educational costs in paragraph one, then he clearly explains the issue (âbar loansâ vs. regular student loans) in the second paragraph. Further paragraphs discuss the judgeâs rulings, with some citations.
Donât criticize him for having a lede. Writers have been doing this since newspapers existed.
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The bankruptcy case was fought by Lesley Campbell, who graduated from Pace University Law School in 2009 with nearly $300,000 in student loans, and ended up in a $50,000/year job at a hotel.
Nice job, Ms. Campbell!
In addition to what @Mangochin saidâŚ
âWorthâ is not a well-defined concept in this case; itâs partly defined by what people are willing to pay, which in turn gets skewed by easy availability of loans. âWell, the bank is willing to lend me money to buy a house/pay tuition at this price, it must be worth that much!â is one component of that.
One problem is that in addition to functionality (houses provide a place to live, education provides skills), these are positional goods. Part of the perceived value of either of them lies in having a better house than others, living in a better neighborhood than others, going to a better school than others. Positional goods are intrinsically scarce and widely perceived (sometimes rightly) as desirable, so people spend as much as it takes to get the best ones they can. The end result is higher prices and everyone ending up exactly where they would have been anyway but poorer - except the banks who profit from the arms race and any other middlemen taking a percentage.
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And future asset bubbles are pretty much guaranteed as long as central banks keep holding interest rates at zero (or less). Weâve done incalculable damage to our economies by destroying the concept ot a safe investment.
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If I understand correctly, (which Iâm not sure I do) itâs that this immunity to bankruptcy only applies to federally backed loans through the stafford or PLUS programs, not to non-federally affiliated, private âstudent loansâ that are also extended directly by financial institutions.
My econ professor told the story of a guy who did currency conversion from Canadian Tire money to CDN. Had a posted exchange rate and everything â at a slight discount to the CT money, since it was less widely accepted than CDN.
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And to add on just a little bit moreâŚ
Before the GI Bill and the creation of the FHA, buying a home meant putting down at least 80-90% as a down payment. Thus, not many people could afford to buy homes. Notice how big the pre-war apartments are in NYC, for example? Thatâs because most families lived in rental units their entire lives, even back when 6-12 children were the norm. Further west the rental units might be physical houses, but they were still rentals. (The Westward Expansion in the 1800âs was a BFD precisely because Euro-heritage settlers were able to claim actual ownership over land, which meant they owned their house and crops too.)
With the FHA backing mortgage loans, potential home owners could put down âonlyâ 20%. That was much more affordable, and still meant there was enough of a capital commitment that they would take care of their home and pay the bills. Then the down payment limit was lowered to 10%, because everyone âknewâ how safe home ownership was. Then it went down to 5%, the market tanked, and home âownersâ (with almost no personal cash paid in at the start of the mortgage and mortgage amounts well in excess of the value of the homes, which meant even if they could sell theyâd still have to come up with significant funding to cover the difference) walked away from the houses as the only rational financial choice.
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And since all of that happened before most of us were grown we just assume that it was always that wayâŚ
I am not old that but I do recall stuff on tv about balloon payments and 18% interest rates for mortgages when I was a kid. Heck the 30yr mortgage is pretty much a new thing relatively.
This why mortgage burning parties were such a big deal previously though we only see it in passing reference in a few movies from the era. You could put 90% down on the house and still have it go poof if you couldnât make payments and it was a much quicker schedule.
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God forbid we acknowledge we have common interests as a country and that we should fund those via taxation.[quote=âslybevel, post:43, topic:75846â]
(c), just not spend so much on military shit?
[/quote]
But⌠but⌠teh scary moooslims will gets our freedoms!!!
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