"Former students strike against student loan debt." Should you be able to refuse to pay debt willingly incurred, but later deemed excessive?

I look at it as no different from buying a house. You may buy a house and then the value may go up or down. If it goes down, does that alleviate the responsibility of the owner? It’s a gamble, it’s the chance they take. Others may feel differently.

I don’t know about just refusing, but I do think its crazy that there are people in their 50s who are still paying off their own loans AND their kids loans. Something is wrong with the system now. College used to be affordable and not a lifetime payment thing.

Perhaps, to some extent and in some cases.

The suit mentioned in the article is interesting, as it focuses on “predatory lending practices”. If it can be proven that the loans were in some way fraudulent or misapplied, then there’s a good case to be made. For those students so affected, they may be able to make the case.

I’m wondering also if some students can make the case that they were not fully aware of the requirements when they signed the loan papers in the first place. That is, if they were under the age of majority – as many high school graduates are – or if their high school education poorly prepared them (and “graduated” them as financial and intellectual illiterates) to sign papers that they could not read or comprehend in a practical way or in some other way they were induced with promises that could not be met, etc.

If they can prove fraud, then I’m totally in their camp.

I don’t think it’s going to be a universal “get out of jail free” card to wave like a magic wand and be forgiven debt incurred by adult, competent individuals who now have buyer’s remorse, but it could work for some. (It seems somewhat ironic, though, that their awareness and education has now improved to the point where they realize – if they truly do – that they were taken advantage of. Who gets the credit for that “education”?)

I would think that in order to secure a loan of any type, an adult would have to co-sign, since it’s not enforceable if the loan application is signed by a minor only.

Most of the loans for people under 24 go to the parents—not the kids. Once you turn 24, they stop looking at your parents income as your income.

I heard on NPR that there were some parents who had their Social Security garnished to pay off all the loans.

There should no such thing as student debt. Qualified students should go to universities and just pay for room and board. Even that money should be supplied at no interest.

After WW2 soldiers used the GI bill to pay for advanced education and built a strong prosperous country. California residents could go to state schools with no tuition cost. Reagan stopped that when he became governor, then went on to become President, doubled the national debt and sent the country into a recession that lasts to this day.

One way back is to put corporations back on the tax rolls, and restore the progressive income tax to a reasonable level. The kids educated will become the American brain trust that will lead the world once again.

Now we all know that there’s going to be no such nonsense as the legal cancellation of debt for anything as flimsy as excessive interest, penalties or fees. The banks have striven mightily and with great success to remove even the dire solution of bankruptcy from the grasp of all but corporations. Why should anyone in THIS country fret merely because education gallops in stride with those those other necessities (such as health care) in inflicting crippling debt on those requiring such things?

My generation got medical degrees and then filed bankruptcy on the student loan debt. You can’t do that anymore but I find it funny that the same people who benefited from that scam are the ones who don’t want an avenue for people to escape the same debt now.

You asked for the money, they gave it to you, you knew you had to pay it back.

@Judi student loans can’t be filed under bankruptcy.

@stanleybmanly Unfortunately, you are correct and the situation is totally disgusting.

I can’t help but wonder if there is anything that does require taking responsibility for your own actions. We’ve been through this with home loans, now it’s student loans. I’m not sure what will be next but if we can merely scream and yell to get our debts dismissed, there is no reason to stop here. Car loans, credit cards, what’s next. The only untouchable I see are loans from the bookies. Screaming and yelling doesn’t dissolve those and the penalties and interest become quite heavy.

Self-improvement requires education, yet education is unobtainable in America except for those born rich. Maybe some people who managed to get successful back when hard work was enough to make it will disagree, but often those people seem to be stuck decades in the past in other ways.

I also think many people have a demented notion of what “willingly” means. But this is what you get when you create an inherently flawed system, and is also why civilized nations are doing things differently than we do. Faced with either taking on crippling debt or settling for unlivable incomes, I suppose there is a good choice there, just as you can always jump off a cliff to avoid being eaten by wolves. Choice. Willingly. Funny!

My take is that when costs of essential items rise to where all but the elite require loans that cannot be paid off by anyone outside the top quintile, we have issues with how our society is set up.

@Jaxk I get what you’re saying, and would agree with you if this were Neverland or some other fantasy world, but in light of how the really real world actually operates, it sounds like you favor replacing Democracy with Aristocracy. I’m not sure if you realize that, and it may be unintentional, but if we assume that you know the difference between theory and fact then that’s the logical conclusion. If not for some people acting irresponsible, a large percentage of the kids in college now wouldn’t be there because the financially responsible thing to do is to avoid unpayable debt by flipping burgers until retirement and leave the high-paying jobs that require a degree to those born with silver spoons in their mouths.
This isn’t 1980 when a single mother working three jobs can take a couple night courses and work her way up to success; this is 2015 where tuition alone at many schools runs more than the median net income of the citizenry. And since that median figure includes those with degrees, those without degrees are even less able to pay.
I see the large wave of defaults as a sign that maybe was some irresponsibility on the supply side of the equation here that they refuse to own up to. After all, it takes two to tango, so colleges can reap what they’ve sown. Don’t like it? Invent a time machine and undo the past. Want to avoid it in the future? Do something about the cost of education. Many other nations have already done so.
Don’t get me wrong, I don’t like people signing a contract and bailing any more than you do, but pull back a little and look at the bigger picture for a moment. Why is it happening? Because people want to pull themselves up by their bootstraps and make a better life for themselves. Are you against that? If not, then can you think of a better way that is actually feasible? I can think of a few reforms that probably won’t ever happen in our society that could prevent this, but barring massive reform, I don’t see a better way.
(FYI, I wouldn’t single you out so much if not for your history of having some insightful expressions of opposing viewpoints.)

Ha ha! I’m on the phone with Sallie Mae / Navient now.

@Dutchess_III , they can’t be filed under bankruptcy NOW. When I was in school they could.

When was that? I filed in 1993.

@Dutchess_III , in the late 70’s and early 80’s.

So @jerv, should we think of you as having been born rich or currently uneducated? Because according to you it’s an either-or proposition.

@Dutchess_III , I couldn’t find the actual law but I remember the news at the time they were negotiating it. This article talks about the changes that happened in 1984 when loans started outpacing grants and how Reagan was behind it.

Because my mothers income was so low I got grants for almost all my tuition and since my father was deceased I was still getting social security while I was in college. All that has changed now. No more social security while in college and the grants have been replaced with loans. Thanks Reagan.

Well, in my moral code, yes, interest on debts is a horrible system except for the people who collect it. It should be phased out and abolished for the good of humanity. I much prefer societies where even higher education is affordable or even subsidized.

Higher education in the USA has become far too expensive and there’s far too much debt involved, kind of like medicine in the USA, and other things. It’s such an easy way for those with most of the money already, to stay the ones with all the money, without doing much, also because of all the shame-based ideas around debt.

So ya, debt in general is awful and should be done away with, and I think student loans should be forgiven and abolished, or at least made zero-interest.

As a practical matter, some of the people protesting might get in trouble, since the banks have most of the money, have bought most of our politicians, etc.

The school in the article is a for profit college,. For-profit colleges make a big chunk of their profits from federal aid money, and have an incentive to enroll as many students as possible. They work hard to convince students that they can afford classes there.

When I was younger, my group of friends was mostly young people working in the service industry who didn’t have a degree. That’s the exact target audience for these kinds of schools. I knew eight or nine people who enrolled in the Art Institue of DC. None of them graduated.

It’s hard enough for people going to regular colleges to pay off their loans. My aunt is in her late 50s and still pays loans from med school. The cost of education is rising way faster than inflation or salaries.

I think the idea of bootstrapping has mutated over time. It’s supposed to mean that if you work hard and seek opportunities, you can better yourself. Today, conservative politicians have hijacked that word to justify their financial policies. If you don’t like paying student loans into your middle age, you must be a whiny entitled welfare queen. A real American would have the rugged self-reliance to pull themselves up by their bootstraps. Related: soon the wealthiest 1% of the world’s population will own more than half of the world’s wealth.

Bootstrapping is used to shut down discussions about education reform. Rising college costs and high-interest student loans are seen as just part of the free market- problems for individuals, and not for all of us. That isolates people and creates a huge imbalance of power between people and financial institutions.

If people can’t get an education, it holds back the entire society, and it becomes everyone’s problem. Governments take on projects like building interstate highways or the power grid, because having infrastructure is a worthwhile aim for a whole society. Local governments use tax dollars to subsidize construction of football stadiums and even wal-marts, because in theory they will lead to economic growth. Having an educated population should be a society-wide goal. It lays the foundation for a modern economy, the way roads and electricity lay the foundation for our economy. The current climate is holding our society back, the way having dirt roads would hold us back.

I can sum people like that up in two words. “Dead Beats”

We’ve decided everyone should go to college, and drilled that into kids from the time they first start school. So schools have popped up to provide a college for everyone. At the same time, once you’re accepted to a school there is almost always a way to pay for it. Schools take advantage of that by raising prices because people can pay them.

I think it’s incredible that people have so many options here and still complain about them.

Maybe the solution is to require the same sort of warnings as credit card debt. Show how long people will be paying at the minimum payments, the total they’ll pay, and have that as prominent as they do elsewhere.

Would it really deter people though? I believe most of it is already in place.

Would we rather it was harder to get in, or that options to pay weren’t available?

@Haleth – the line for top 1% of world earners is about $45k US. So everyone who graduates college in the US is getting really close to the top 1% within a few years of graduation. We’re all incredibly wealthy here and take it for granted.

I think that there is a generation who feel that the social contract has been broken. Twenty years ago, the concept was – go to college – get a job – build a family – pay off your debt. And that’s the assumption that people used when they went to college and grad school.

But somewhere along the way – pin it on the recession in 2008–2012, and to a lesser degree on the Bush administration, and even the Reagan administration, the “social contract” of upward mobility based on education got sort of shredded.

So people who had bought into the American dream of 1990 got screwed when the assumptions of 1990 ran into the realities of 2008.

I’m not condoning walking away from debt- definitely not. But I can see how that population feels like they were screwed.

@CWOTUS Old enough to be somewhere in the middle, but young enough to still have the mental flexibility to know and accept that things aren’t like they were 20+ years ago.

@Haleth Pretty much.

@funkdaddy Not really. If you are truly poor, you may get some grants, but if you’re working class, odds are you’re too rich to get someone else to foot the bill yet too poor to pay your own way.
If you put those warnings up, either they wouldn’t work, or fewer people would go to college and we’d have even worse issues trying to fill certain positions.

@elbanditoroso Yes! Very much yes! However, those stuck in 1972 cannot and will not ever even see that, let alone admit that it’s even possible.

@jerv – How do you figure? I’ll explain myself with the hopes you’ll do the same.

When I was young, my family was poor. Kicked out of the trailer park poor. So I don’t think anyone would accuse me of “coming from money”. My wife’s parents were a teacher and a line worker for the electric company. She did not grow up wealthy.

My wife went to school and originally graduated in 2002, got married to an awfully good looking, funny, charming fellow, worked for a bit, and then went back in 2005 with only us to pay for it. I made 24k her first year in school and she made about 3k part-time. I don’t think anyone would say we’re outside the working class.

So loans paid for her school, books, part of our rent and probably some other expenses while she went. When she got done, she started work again with quite a bit of student debt that we knew we’d have to pay down, but those loans are at really low interest rates because they are student debt. We’re still paying.

Our agreement was that I could then start a business when she graduated. I worked for a year to get us in a good spot, then did that knowing I’d learn on the way. It was my “college”. Any loans or debt I’ve acquired and paid off in the time since then have been at rates about 2–3x what she pays for student loans. No one would ever dream of forgiving my debt without consequence and I’d never say I was tricked into acquiring it.

My brother also went to college on a combination of scholarships and student loans which my parents ended up largely responsible for. They paid an extra house payment every month for a long time to pay them back rather than having that money for retirement. Now he’s back in medical school and again using a combination of working for the school and student loans to fund it. He knows what he’s looking at in terms of paying those off.

I think my family’s experience is fairly typical and shows different paths people take to a career with and without college, and ways that debt gets paid, so I’m sharing it here.

So how would my family fit into your statement that

Not really. If you are truly poor, you may get some grants, but if you’re working class, odds are you’re too rich to get someone else to foot the bill yet too poor to pay your own way.

I think just about anyone that decides they want to can go to college right now in the US, and that’s amazing. The cost is time, effort, and their future earnings. Those things should be spelled out before people take loans, but I don’t understand why that debt should be treated differently than anything else that’s purchased.

I was not born to a rich family, I did not get scholarships, I worked my way through. I did it without going into debt. Part of going to college is making proper financial decisions that enable you to complete your degree using whatever means you have. Some debt is acceptable especially if your degree will actually land you a high paying job. Too much is just plain stupid especially for something like a liberal arts degree.

If you take on the debt you should pay it back. That said all of the fees and penalties I don’t feel are fair. I think they are predatory and should not have to be paid back. Not going to college at all and blaming money is a cheap cop-out.

@ARE_you_kidding_me , when did you go to college?

@funkdaddy Same here, except that the rents were high enough that even being that poor still places one above the eligibility limits for most aid. Trust me, living in a panel truck in New England sucks during the winter. In fact, I would’ve had a better chance at school if my mother and I remained that poor instead of her working her way off of welfare and taking an extra part-time job or two to cover the shortfall that happens when you fall between the cracks.

As for time, effort, and future earnings, if you insist on living indoors and eating regularly, odds are that you’ll lose time and split effort just trying to live and thus have less of either for college. And future earnings are no guarantee; I know Home Depot floor workers and McDonalds burger flippers with degrees (not Liberal Arts degrees either).

It may be a little different in places where rents run about one-third to one-half what they do anywhere I ever lived (and I’ve lived in all four corners of the 48 states), but that is what I see, have seen many times before, grew up with, and all, so that colors my opinion. It’s not wrong to base personal opinion on a lifetime of experience and observation, is it? If you want to get a little closer to my experience, a couple would need at least $35k/yr from day one just to be off the street and eating, and a bit more when the loan payments start to come due. In that light, I think you can see why many would choose to get right to work instead of racking up even more bills.

I will allow for the possibility that my life is a staggering number of improbabilities, but it seems that there are enough people from backgrounds similar to mine that I won’t give much allowance as the odds of that many people having that degree of improbability are too low for my entire life to be nothing but flukes. Therefore, I must assume that the truth, while probably not as bad as my history and observations, is nowhere near as rosy as your happy little fairy tale ending. Regardless, I think our differing views come from being in different circumstances, and having differing experiences.

@ARE_you_kidding_me I did the math. Ten years ago, even with all the grants, the GI Bill, in-state discount and everything like that, I was looking at about $8k/yr out-of-pocket for education, plus considerably more for room and board, assuming I wanted to separate from my wife to save money instead of keep a more costly place off-campus. The numbers have gotten worse since then as tuition increases have outpaced wages.

Without an iron-clad, written in stone guarantee of employment that would allow me to repay considerable debt, I wasn’t about to gamble. Especially not after seeing my mother go through that. Relying on “if” is stupid, and saying it’s a cop-out because I would rather be assured of an income rather than risk being unemployed and homeless tells me that you have lead a charmed life full of luck and good fortune.

Now, is $40k in debt with only an uncertain chance of that degree working for you an acceptable risk? Is a degree an unbreakable promise that you will earn more? Before you answer, remember that you’re talking to a tradesman in a field where the median income is comparable to what someone with a Bachelors degree pulls in. Some people decline college simply because we don’t want to default ourselves and make this issue worse. I once thought as you did, then I hit The Real World.

I graduated first in 2000 and then again in 2011 and may again in 2016. Zero loans, zero debt and a LOT of hard work. This was obviously full-time work and part-time school the entire time. It can be done. Most new cars cost about 30–40k on average these days, that’s waay too much debt for my taste but it’s workable especially if you can manage to major in something that has a reasonable probability of paying off. If your plan is to major in sociology or communications then I’d say just don’t go. You can get that information at the library for free. There is little hope of a job there unless it’s a job that “requires” a four year degree. There is always risk in going but there is risk in not going also. In my state the first two years of community college are tuition free. My philosophy was never pay retail for college. A parent worked for the university and got me half off tuition for my first one, my employer payed most of my second and I got a waiver and a stipend for graduate teaching in grad school. I never got any scholarships or grants. It’s all about being resourceful and taking advantage of what you have at your disposal. It’s just part of the curriculum.

I can’t find the original article now, but when I did read it, the students we’re talking about had a very specific grievance. They went to for profit schools. Some of the schools shut down before these people could finish their degrees. Others said they didn’t feel like they learned anything. Most of them said they couldn’t get jobs because nobody accepted their school as legit.

They are obliged to pay back all of these student loans for an absolutely worthless degree that does them no good at all. I think they have cause to protest. Perhaps for profit schools should be examined more heavily before they are allowed to take federal loan money.

@jerv Ten years ago 8k a year for tuition would be a steal. Totally doable. Charmed life my ASS, I had a wife, a mortgage and a full-time job. If I needed to sell the house and move into a shitty apartment to make it happen I would have. In fact, I actually did that for a while. Most people have a hard time leaving their creature comforts and work even harder, give up all their free-time for years to make something like college happen as an adult. That said while it’s a great experience it’s not totally necessary. It’s not just the financial cost but there is a mental and time cost as well. Paying for it is actually the easy part. Looking back, the other costs were too much and I would not have done the second one knowing what I know now.

@keobooks What you are talking about is people that went to school without a plan (didn’t know what was a good career path or what was an accredited school) and the school’s plan was to take the money.

@Tropical_Willie I think if the government is going to give people loans to go to school, they need to have more oversight as to what counts as a school worthy of investment. There needs to be safeguards against scams. It’s not good for the students or the government.

The government already does this with houses, There are certain kinds of loans you can’t get unless your house passes a rigorous inspection.

@keobooks: Sounds like they went to what we refer to as a “storefront school.” Schools that are also known as “technical institutes” or some other bullsh**. They do rely heavily on grants, but if someone pays cash, they’ll pay through the nose.

@ARE_you_kidding_me First 30–40k is too much debt, then it’s a steal? Make up your mind! Now, if that $8k was before grants and all, maybe, but it’s after, and also on top of non-trivial living expenses.
Also, you had a hook-up. Try it without that 50% off coupon or an employer splitting the bill. You don’t even know how good you had it. Yes, it was hard for you, but that was even with advantages most people don’t have. Ditch the crutches and see if it’s as easy without help.

40K for a college education is a steal, $40K for a car is insanity. Big difference there. My hookup was icing on the cake and it took getting one degree to even have that opportunity. Without that “crutch” I still would have cash flowed almost all of it and went anyway. It also came at the expense of taking nearly a decade to complete my second degree because I had the full-time job. Truth be told I would have been better off if I just went full-time and took out a small loan. The time value of money would have me much further along if I had done that. Paleeze, I worked 40–50 hours a week, took classes and did homework until the wee hours of the morning for a decade. I gave up everything during that time. I know of only one other person who did that and actually pulled it off. I’m still just hearing excuses, excuses…excuses…. The only reason you did not go is because you did not want to. I work with tradesman and they get paid very well for what they do, it’s generally good rewarding work. To get that pay and job satisfaction without having to go through the gauntlet of a four or even two year degree is about the best deal you can get. I did those jobs myself and would have been completely happy remaining at that level, my pay now is not much more. You don’t know how good you have it. I hear whining like this “only the rich can go to college ” bullshit all the time. Honestly most of the actual rich kids either flunk out or major in nothing. When you see students who actually graduate with something worthwhile 90% got there through hard work and careful planning. I know because I actually experienced it myself and I know what my fellow students were facing and how they managed. Some of the hoops they went through to get out is truly humbling and not for the faint of heart. It’s just part of the experience, “making it happen” is one of the best lessons you learn getting a real degree.

@ARE_you_kidding_me You have NO idea what my life has actually been like though, so you are just assuming that you had the hardest life in the history of ever and anyone who doesn’t do as you did is lazy and anyone who claims they couldn’t/can’t is just making excuses.

Tell me, how many major illnesses have you and/or your mate had in your life? Car accidents? Ever had a job fall out from under you unexpectedly through no fault of your own? Or family issues major enough to affect your finances? Or other such things that may have a dramatic effect on one’s life? More importantly, do you know details like that on every person you are insulting because they didn’t follow in your footsteps?

As for your hard work, 40–50 hours a week sounds like you took weekends off and worked half-days (if at all) on Friday. With those hours, you would not be able to support yourself anywhere I’ve lived unless that job paid at least $18/hr or you had a second income. I assume you had help? One blessing I do have is my wife.

Also, don’t EVER bitch/brag to anyone who went to Nuke School about studying or homework because the best you’ll get is a derisive, “That’s cute!” from someone who spent 90–130 hours a week in the classroom. (Classified material; all studying and “homework” was done in the school.) Wee hours… Phhht!!

My mother got her degree… after 20 years and in part due to “life experience” credits. Of course, by that time she already had a government job that paid her more than the degree would get her if she gave up decades of seniority to take a “degree required” job. The price of having to pay your own rent and have responsibilities other than just earning credits.

But I suppose you are still thinking it’s all excuses. Nothing will change that. You know everything, anyone who doesn’t do what you did is stupid and weak, yada yada. I’ve seen that spiel a million times before. You’ll just sit here insulting all the “lazy plebes that want handouts” while making yourself sound like a paragon of virtue, and I’m going to stick to my guns by holding that lives are different, your mileage may vary, and otherwise consider your opinion Pollyannaish at best.

Don’t get me wrong, I’m happy things worked out for you, but you seem to think that everyone has had the same circumstances and situations you’ve had and refuse to admit that it’s even possible to conceive of thinking that maybe other people didn’t live in the EXACT same conditions you did. I don’t like laziness any more than you do, but I’ve seen too many try to do what you did and not make it that (unlike you) I don’t insult people for not making it big, just as I don’t consider a soldier to be cowardly just because they don’t have a Silver Star.

So how about you just sit there in your smug superiority and stop posting flamebait since nothing you say is going to undo decades of life experience and will only serve to provoke/anger people who don’t share your views?

Your perception of what I said is waay off, so I must have hit a sore spot or something. FYI I worked a 40–50 hour week at my job, then did night school, classes during the day scheduled around field work and travel. I was able to schedule my work around classes just so it all got done. I’d get home at 10:00 or so and then have to study. Weekends…forget it! I generally “survived” on four hours or so of sleep. I’m not bitching about it either, it was required. What I am saying here is not that people are “lazy” just that you have to really want it. Regardless of your circumstance going or not going is in fact a choice. Your reasons for not going are personal but you seem to hold some sort of resentment for those who did make that choice, that they somehow feel they are superior to you. What’s really happening here is that you feel insecure or don’t feel you have been given enough credit. That’s got nothing to do with me. You initiated this by saying I must have lived a charmed life because I actually went. Most people who go don’t have this mystical charmed life you speak of. Everybody has their own shit they deal with, it’s not just you. You say I must feel like I had the worlds hardest life but that’s what is coming out of your mouth, all I said was in fact that no I did not have it easy cheesy like you would seemingly like to believe.

@ARE_you_kidding_me You hit a pretty nasty sore spot indeed.

I think you miss what I’m saying. Working 10-hour shifts with a couple more hours of commuting just to make rent and electric (and nothing else) is a little different that doing that to pay rent, utilities, food, gas, and tuition. And if you have a few thousand in medical bills, or even simply need a major repair on your car, something has to give. The “four hours sleep” thing is pretty much the story of my adult life.

But I chose everything that happened to me. I chose to use my education money for survival instead of starving in a classroom. I chose to go to the ER after a car accident instead of sign up for school. I chose to waste my textbook money on gas and car repairs. I chose to try and help my in-laws instead of seeing them thrown out into the street.

“Everybody has their own shit they deal with, it’s not just you.”

That is EXACTLY my point. And some people have enough shit to deal with that college isn’t in the cards. Well, not unless something else is sacrificed… literally. As one who likes things like having a pulse and dislikes seeing elderly people evicted, I might have my priorities a little messed up.

My mother went through pretty much the same stuff you did. She busted her ass trying to care for me as a single mother, get off of welfare, and attend the occasional night class. So resentment isn’t the issue here, as I actually applaud those who manage to pull it off like you and her did.

Where I take exception is those who make it sound like the only ones who can’t get a degree are those who don’t want one. The “Everything is a choice!” crowd. The ones who refuse to believe that anything could ever be beyond your control. Yes, there are some things that are a choice, like my decision to remain a CNC Machinist instead of get a degree that would get me a job making about what a mid-level CNC machinist makes. But I allow for the possibility that sometimes “choices” are made for you.

Relevant

He’d have worked his way through college
He’d have scooped up lots of knowledge
If he only were a Dane