Where is Eric “apparently unable to prosecute anyone who isn’t a whistleblower” Holder when you need him?
Surely if we can just reclassify these delinquent students as white-collar criminals, the problem will clear up in no time.
Debt is the enemy of humanity. The viscous debt owners deserve nothing.
I have a couple takeaways from this:
1 - He has been unemployed for 13 years. I can’t imagine being unemployed for that long. After a year, MAYBE a year and a half of being unemployed, I’m applying for a job as a Walmart greeter if it means I can bring in ANY money. I mean, I’ve got a little bit of pride, but seriously, what the hell.
2 - Who the fuck is giving this guy loans for 5 years after he’s unemployed? Although, further thought, I guess they were probably against his (now foreclosed) house.
All in all, this sounds like a completely bonkers situation.
The reason that the government is asking no mercy is that, unlike twenty or thirty years ago, the government is holding almost all the paper.
Back when the banks held these notes, (a) they had to show some due diligence in who they loaned to, and (b) the government had no vested interest in treating these loans differently from any other debts for bankruptcy purposes.
And by “the government”, I mean, of course, you and me.
Anyone who knows that the federal government will backstop the debt.
The “should be obvious” stupidity of the current state of bankruptcy laws is this: Interest rates should be a function of risk. Therefore, if it is IMPOSSIBLE to not pay back a debt, then the risk to the lender is zero. Logically, that means the interest rates should also drop. Debt peonage is the new slavery.
What’s needed here isn’t finger-wagging at the DOJ. They’re just doing their job, upholding the law. What’s needed is to change the law.
The banks were allowed to write the new bankruptcy law in 2005. It made bankruptcy more difficult in several ways, but most notably it made student loan debt non-dischargeable.
Preventing abuse is fine, in fact it’s a job I used to do. But making student loan debt stick all the way to the grave is unconscionable.
The plus side, and I hope somebody points this out to poor Robert Murphy, is that the Government is pretty restricted in the ways they can collect that debt. Collections agencies can call, but you can ask them not to call and they must comply. After that, about all they can do is garnish your tax refund. I don’t even think your paycheck can be garnished, and certainly benefits such as Social Security can’t be. Many times there’s actually nothing they can do to a debtor. But that’s no substitute for a saner law.
That seems to be in direct contradiction to this sentence from the OP:
And also with this article from June of this year.
From “Hope and Change” to “certainty of hopelessness”…
A friend of mine had their wages garnished for student loads, and they made less than $10 an hour, so it was brutal.
I feel bad for my friends with young kids. If I thought they would be interested in my child-rearing advice I wound suggest they raise them to assume they’re not going to college and plan accordingly. Learn a marketable trade and start utilizing it as early as possible.
Hm, I thought I recalled that was only under special circumstances, but that article sure doesn’t back me up.
Yeah, a quick googling of “student loan social security garnish” seems to bring up a fair few examples.
Poor, need an education and lost your job? = irresponsible person who doesn’t deserve a break.
Rich, have your education paid for my mumsy & dadsy, lost the most recent chunk of money you transferred in from the Bahamas on bad investments? = file as many BK’s as you like and wipe out 100% of your debt, transfer in new funds and start again - you’re a job creator after all!
The reason for holding student loans outside of BK’s is twofold (as I see it): 1) it unfairly targets the poor as we’re (I’m including myself as I just finished paying off my student loans after 21 years) the most likely to have to rely on student loans in order to get an education. The affluent have the money to pay for their education and can take out loans, of even greater total value, for yachts and mansions, and yet get away from those scot-free (just ask Trump, he’s done it four times and he’s running for President - and that somehow also makes him “awesome at business”)
2) it places the overall financial burden for stability of the entire economy on the poor/middle class who have to rely on loans to pay for an education that is becoming increasingly expensive. Causing more and more people to take out more and more loans. It’s a money engine and they need to make sure there is no way for it to fail. However, this also ensures that the rich to continue to gamble with their finances and if they lose (which happens more often than not) they get to wipe that debt away and start over. In order to allow that to continue to happen, they need to ensure that there is a constant stream of revenue in the economy that cannot be erased - so it’s student loans that become a permanent debt. Over time, education will become even more essential. With the current emphasis on STEM starting in KG, it will be impossible to have any STEM skills that an employer recognizes without an official education. The only way to get that education for the vast majority will be to rely on student loans. I’m not crying conspiracy or anything, I’m just saying there lies the seeds for a long term revenue generator which unfairly targets one class of people and will ultimatley help ensure the maximum number of people who start out in that class remain in that class. There will always be outliers - the system actually relies on that fact - as they are held up as the shining example that if you were to just work hard enough you too could be “one of us”. which also means that, if you fail or falter, it is all your fault.
Yay capitalism.
The question to ask here is “why is the Department of Education overriding the orders and laws passed by the actual Obama administration”?
Reminds me of when I was taking out my student loans. For a laugh I took a look at the conditions under which the amount owed could be reduced or forgiven entirely:
“If you die while going to school, the debt transferred to your parents may be reduced”
End of list.
I wish I understood why a college education is so f__king expensive nowadays. Is it administrative bloat? The struggle to attract students with a resort-like milieu? Professors making 7 figure salaries? (I doubt) Anyone have a clue? Can it be lowered with some reordering of priorities?
Physical plant (electricity bills) are a large part of it; most campuses were not built with conservation in mind. So is administrative bloat, some of which is because there is simply much more work to do (the amount of work just to remain in compliance with federal regulations is staggering), and some of which is because as faculty do less and less of the administrative work (again, for a variety of reasons) you need to hire more and more people. Administrative salaries have also skyrocketed. At large universities, the effort to be competitive in the sciences means that many schools have added or beefed-up programs in the most expensive research areas, especially biomedical sciences. And then there’s athletics, which hemorrhages money at all but a handful of Division I universities.
With respect to the original article, the man in question is possibly not the most sympathetic victim. He earned a very good salary ($165k in 2002 was serious money) yet didn’t save enough for his children’s education, and for unspecified reasons didn’t take any jobs when he lost his main one and was still relatively young; essentially, he decided to retire at 52.
The Obama Administration: standing up for the rights of impoverished bankers since 2008.
