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Student Loan Bubble? Just Discharge It
By now everyone knows that the biggest portion of US household debt, besides mortgage debt, is a towering $1+ trillion in student loans, more than total outstanding credit cards or car loans, which is problematic for three main reasons: it is increasing at an unprecedented pace due to lax Federal lending standards, delinquent loans are soaring and are now well over $100 billion and rising at a pace of tens of billions each quarter, and it can not be discharged. At least that is conventional wisdom. But while points 1 and 2 are indisputable (and deteriorating), it is point 3 that is the more troubling for an entire generation of young men and women who are afraid to splurge on levered purchases such as houses due to an already insurmountable debt overhang, and a job market that is hardly hospitable to young entrants. Luckily, there may now be solution stamped in US case law.
Meet Mike Hedlund.
This Klamath Falls native may have just made legal history by winning a 10 year battle to have the bulk of his $85,000 in federal student loans, which he accumulated as a law student at Willamette University in Salem, discharged. The result of this legal decision will likely have epic implications for an entire generation drowning in debt, as it has now "opened the flood gates" for all those in Mike's position to challenge their massive debt encumbrance.
And when it comes to Mike's case, there are millions who not only want to be like Mike: they are just like him. At least when it comes to their
Mike's story is well-known one: spending thousands to get a degree, he was unable to obtain the well-paying job he had studied for (although how much of that was market driven instead of purely due to incompetence is unclear: he failed the bar test three times), and instead was forced to settle for a low wage job paying $40,000 as a probation officer. He then filed for bankruptcy, demanding his slate be wiped clean, including the discharge of his (collateral-free) debt. What ensued was a ten year legal odyssey with lender Pennsylvania Higher Education Assistance Agency, which ultimately reached the Ninth Circuit court twice. In the end he prevailed, with the result being a reduction of debt owed by $53,000 from $85,000 to just $32,000 (unclear how many tens of thousands of dollars the legal bill was: but Mike doesn't have to worry about that - his parents footed it).
Here is Oregon Live with the story, which most current and recent graduates can surely commiserate with:
Mike Hedlund waged a 10-year legal battle to force his lender to discharge most of the $85,000 in federal student loans he built up while earning his 1997 law degree from Willamette University in Salem.
When Hedlund graduated from Willamette, he owed two student loan companies. He struggled to pay either of them, but reached a deal with the smaller lender to repay $18,000 at $50 a month.
Hedlund was unable to make much use of his expensive law degree. He failed the Oregon bar exam twice in his first year out of law school, then locked his keys inside his car on the way to his third scheduled test, and so missed it entirely. He did not try again.
Instead, Hedlund got a $40,000-a-year job as a Klamath County juvenile probation officer, a job he still holds.
"I had planned on making $200 an hour instead of $20 when I agreed" to take out loans totaling about $100,000, Hedlund said.
Just a case of reality not jiving with one's exorbitant expectations? Seems like it:
[T]estimony from an employment expert convinced judges that Hedlund holds a good-paying job for Klamath Falls and wouldn't likely earn a whole lot more as a starting lawyer there, particularly if he worked in the public sector.
Of course, the same argument can be made by every Joe Sixpack rushing to buy a McMansion during the last housing bubble (not to be confused with the current one). But being accountable for one's choices is so 20th century.
With that in mind, Mike fought on:
Last week, in a decision that could affect debtors in eight states, a panel of the Ninth Circuit Court of Appeals in Pasadena, Calif., ruled in Hedlund's favor.
It upheld a bankruptcy judge's ruling that Hedlund proved all three factors necessary to have $53,000 of his debt forgiven: He made a good faith effort to repay the money; he can't earn enough to both repay the money and maintain a basic standard of living; and his inability to earn substantially more is likely to persist.
Who were the "villains" that granted Mike the funds needed to pursue the dream that promptly turned into a nightmare when reality collided with rosy models of what the future "should" be (see Federal Reserve for other instances of this):
He tried to negotiate a repayment plan with the firm he owed $85,000, called Pennsylvania Higher Education Assistance Agency, but that lender would not agree to a plan Hedlund felt he could remotely afford.
That lender exists to make money to help Pennsylvania students afford college, and it currently holds $39 billion worth of student loan debt. A previous director stepped down in 2007 after a state audit revealed he'd issued millions in lucrative, undisclosed bonuses to managers and executives.
When a judge agreed that all but $30,000 should be wiped clean, the Pennsylvania agency appealed, setting off a 10-year legal odyssey that twice reached the Ninth Circuit. Hedlund filed to represent himself before that high court, but Ninth Circuit judges awarded him pro bono representation by an experienced San Francisco firm.
The Portland-based lawyer who represented the lender said Friday he would ask an official with the agency to comment on the decision. None did.
Victory for Mike... and for everyone else who thought that by spending nearly $100,000 on an education pursuing a career would immediately result in financial utopia, and instead ended up with a menial, low-paying job.
"I owe a car instead of a house now," he said. "It's huge for me. What I've wanted all along is something I can afford," not having the slate wiped clean, he said.
He and his wife have three daughters, and his wife works one day a week. He coaches soccer on the side to supplement his income and continues to live frugally, he said. "We don't go on many vacations, other than day trips. My newest car is six or seven years old and our other one is a '96 Explorer."
Well, it is called a "bankruptcy" for a reason.
"I am happy that maybe this will help someone else in their dealings with the student loan people," he added.
The same people without whom he would be unable to go to school in the first place? The lawyer chimes in next:
"He had to make his showing, all this evidence, to get part of his loan discharged," Scott said. "This wasn't a case of, 'Oh, I went to school and I didn't get this dream job I thought I was going to get, so now I'm not going to pay what I owe.' He had made his best effort to pay."
And failed.
Ethical issues aside, perhaps a far bigger question is what happens when the flood gates now truly open:
Natalie Scott, a Eugene lawyer who represented Hedlund, said lawyers for the loan agency suggested that forgiving most of Hedlund's loans would "open the flood gates" to healthy college graduates claiming they couldn't earn enough and demanding their loans be forgiven.
Scott said thinks a smaller set of borrowers will be affected, because Hedlund's actions and circumstances were particularly compelling. He tried repeatedly to work out a payment plan that he could deliver on; he made some payments; he worked full-time at a good-paying job and applied for jobs paying more; and he put up with having $280 a month garnished from his wages for 16 months without objecting.
Well, no. Now that there is case law precedent, every student finding themselves to their neck in debt will try the same defense.
So great news for Mike. However, just like the great bank bailout of 2007, there is never a free lunch, and that trillion in debt on the Federal government's balance sheet will likely end up having to be made whole by someone. That someone will certainly be the Fed and the result will require even more deficit spending by the Treasury to provide the Fed with securities to monetize, even more pent up inflation, and even more unsustainable Federal debt for everyone.
Bottom line: who ends up footing the bill? Why you will dear taxpayer, in the form of even more "government" debt that will have to be, you got it, inflated away.
But in a culture in which nobody is accountable for their monetary decisions - from the too biggest to fail banker to the lowliest student pursuing levered dreams of a high-paying job - living up to the consequences of one's actions is so Old Normal.
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The taxpayer's losses were realized the moment the loans were made. No use crying over spilled fiat; the benefit of popping the student loan bubble is more than enough to celebrate.
Yeah but not everyone has parents who can foot the bill for their incompetent kids.
Isn't actually better for the banks to get bailed out by .gov than to receive 0 debt repayments from unemployed graduates?
Perhaps this is by design.
Why does anyone have to be made whole? What am I missing?
They made predatory loans to students, for exorbitant amounts, the students can't come close to paying it back, I don't see the part where the whole system collapses, because lenders aren't made whole.
Oh, loans to students will go down, you say? Good. Tuition will follow. As will enrollment. As will levels of indebtedness.
just what we need... MOAR lawyers [& future "hair Club for Men" customers] getting free diplomas...
my kids will be entering "the college years" the next 10 years! This is good news we will now all be going to college and i will look into the discharge!!!! FREE MEDICAL SCHOOL BITCHEZ!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
At least those students eventually contribute to society.
What the fuck do Alabama rednecks, claming incapacity benefits and food stamps contribute again?
My point is that if I were the banks, I'd want to push this from the individual debtor to the government. Hence the judge might have been helped with making his/her decision. This is pure conjecture but it does benefit the banks in some sense and at some point in time.
The entire student loan program is a hand-out to professors so they can become wealthy pretending to know how to survive in the real world and poisoning the minds of the next generation with their distorted hallucinations.
Way to go Pennsylvania - expand your student loan program nationwide so other states can stick it to the taxpayers of the Commonwealth.
next thing you know, people will stop having to pay off their ebt cards
In the interests of full disclosure:
Rocky and Bullwinkle likewise hail from Klamath Falls, which changes whole dynamics. Just you fuckers wait until every Tom and Jerry start defaulting on their obligations. Pretty soon you'll think it's anything but real money.
More votes to the party that takes care of the peoples. Hell yes..., it should all be free.
<sarc> (since I got my ass burned the last time I forgot to add that)
I can hear GoBombEm's names for the upcoming and corrupt administrative / legislative bailout acts: The Affordable Student Debt Relief Act, and The Affordable Immigrant Benefit Act.
It's time to leave what used to be America.
Sadly, most of the posts here seem to think "justice" has been served.
"The Affordable Student Debt Relief Act" LMAO...
I seriously wish I hadn't paid off my student loan now. I'd seriously ride this dude's coat tail and try and discharge that huge freaking debt that took forwever to pay off. Fuck credit. And, fuck these banks. Alas, it's too late. If I were a financial advisor (I'm not, bitchez) I'd recommend anyone with any bank debt to walk (at least until they launch the f*e*m*a debt camps).
Never too late. Go back to school and get a second major in FemLit. Grab the money and buy PMs, and pass on your student debt to the demoturd's children and grandchildren.
lol! I like your style, Ahmeexnal!
Look at this doof's picture!!!
Would you let him represent you in a traffic ticket????!!!!
Reminds me of and old joke couplet ...
Q: What do you call it when a bus with 64 lawyers goes off a cliff, crashes, and burns, killing all aboard?
A: A good start.
Q: What do you say when you find out there was still one empty seat?
A: A crying shame.
Welcome to the USSA where we take from those who will walk an extra mile to have that chance at success so that those who lose their car keys don't have to really try.
Why is that statue of Justice blind-folded? Because she is being held hostage.
Speaking of: what's the difference between a catfish and a lawyer? One is a bottom-feeding scum sucker and the other is a fish.
R&B hail from Frostbite Falls, which is loosely associated with International Falls, Minnesota, a noted cold place in the winter.
Damn. Well, I was part right with the "Falls" part.
Hey, probably more accurate than most Treasury and Fed prognostications.
Now that's disturbing...
Yes credit cards, student loans,auto loans,etc are a scam and should be written off.
If everyone had to pay cash for car how much would the average car be maybe 5000?
My point borrowed money only artificially inflates prices by about 600% with ur average car
Fractional money system only serves the corporations
No... It wouldn't be... It would be however much the market decides and it decides it's about $26,000 for a new car. Even if we paid all cash, I'm pretty sure the materiel costs ALONE are way more than $5000...According to the BLS, the average price of an automobile rose 2.4 percent from January 2000 to December 2011, substantially less than the change in the CPI.
Lol...
And no fractional money doesn't. In any case, if you can't manage your credit correctly, maybe you shouldn't get a credit card then. I will agree that tuition is a fucking scam though. Motherfuckers are hiring adjuncts and jacking up tuition prices.
Yes credit cards, student loans,auto loans,etc are a scam and should be written off.
If everyone had to pay cash for car how much would the average car be maybe 5000?
My point borrowed money only artificially inflates prices by about 600% with ur average car
Fractional money system only serves the corporations
That kind of system works great from the start. We're so far away from a cash system now that implementing it would wreak havoc.
We have havoc now many r financial slave being murdered by a thousand cuts.
Remenber if you dont own the land beneth your feet and cant feed youself with out workin for money. Your a slave.
Thomas paine agrarian society. Our founding fathers meant for it to be that way. Gold or silver as money
We can take it back but u and i may have to die for our children and loved one to get it back. Fiat money is only a construct.
Eh, whatever. What's another $1 trillion when the unfunded liabilities are already $211 trillion?
Might as well forgive it now while China is still buying US debt. Maybe this speeds the ultimate day of reckoning by a month or two, but either way it's nearly assured, and it will be equally ugly with or without this.
Takedown on the entire "student loan" program. No more loans? Cash only?
Cash, gold or bitcoins.
Gas, grass or ass. No free rides.
BEFORE student loans College was extremely affordable. Most people who did not go chose not to because a degree was not needed in many lines of work.
The Paradox of the Socialist to to preach freedom while denying it in practice.
You nailed it Redpill, getting paid to be the indocrinator for the zombie slaves, what a life.
Mike's story is well-known one: spending thousands to get a degree, he was unable to obtain the well-paying job he had studied for (although how much of that was market driven instead of purely due to incompetence is unclear: he failed the bar test three times), and instead was forced to settle for a low wage job paying $40,000 as a probation officer."
Obviously a victim of society. His only fault was in not choosing an MBA in Women's Studies. Can't we give this poor innocent more than an $85k write-off and 4 years of beer money?!
The course curriculum is spelled Wymyn's Studies.
Get with the program, please.
I think there are too many people who got advanced degrees who should never have gotten one in the first place.
It's the debt stupid! It always has been and always will be.
EscapeKey said: "What the fuck do Alabama rednecks, claming incapacity benefits and food stamps contribute again?"
They help to tear down the kleptoligarchy, bleed it dry.
I know, morally and ethically it is wrong, but who can blame them or this guy when everyone on Wall Street and in Washington is on the take?
At some point you realize you are the fool, the pack mule, pulling the load for everyone else.
Do you bray and keep pulling and sweating, buck, or lay down and give them a "fuck you" look?
I'm tired of pulling and sweating over the past 34 years being responsible and watching everyone else be on the take.
Disgruntled Notre Dame fan ???
NO kidding, but they should allow student loans onto bankruptcy.
I'm wondering whether you're actually serious or not. How many students have assets when they go to college or when they finish?
Bankruptcy as soon as they graduate would be the obvious choice since they have nothing to lose but the $100K debt, would it not?
No one would pay... much like today really. Let's watch out for what happens to interest rates on student loans now then eh...
Dear Escape Key,
Perish the thought that good, solid, possibly even rotund Alabama rednecks contribute little to society.
Their societal value is such that they get to vote at least twice per presidential election.
Now that's american citizenism!
In order for your kids to get those loans, you'll have to co-sign... this guy's loans were in the mid nineties... a lot has changed since then.
This one's simple. Eliminate student loans. Eliminate co-signing for student loans. Make all student loans indistinguishable from credit card debt, i.e., completely unsecured, with no hope of government bailout, and fully dischargeable in bankruptcy.
It's going to be fucking great watching the university system collapse in this country. Those bloviating turds can go out and get real jobs in the private sector.
This is contradictory... either we have student loans or we don't... even credit cards carry co-signer applications...
Yes, make student loans dischargeable and give everyone a big slap in the face with a whiffle ball bat. No bailouts. Problem solved. Academia will implode... and there's no fucking way those folks will get jobs in the private sector, that's why they're in academia in the first place... if you can't do, then _______________.
This will "draw up" the amount of kids that go to school, to the point where it's not just an extended babysitter for fucktards... but, at the same time, allow those who merit going without the means, to get a chance at upward mobility (although, anyone doing their homework is getting into votech atm).
Buckaroo .... +100
Amen to that!
Tenure ..... what tenure?
Pension ..... what pension?
Buckaroo, you are on point boy!!
+10 for "bloviated turds".
The intelligentsia in the Higher Affirmation system are some of the most egregious teat suckers on the planet.
Buckaroo sez: "... Those bloviating turds can go out and get real jobs in the private sector." Trust me, the private sector doesn't want 'em, not even the ones willing to work for a living.
"You're a nice man but this job is not suited to you but you'll easily get another job elsewhere ..." I heard this many, many, many times before I finally landed a minimum wage job.
my kids will be entering "the college years" the next 10 years! This is good news we will now all be going to college and i will look into the discharge!!!! FREE MEDICAL SCHOOL BITCHEZ!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
YES !!! FUCK YOU BANKS....FUCK YOU IN THE ASS !!!
Big, fat student debt scam infographic for those not in the know on this subject:
http://www.ritholtz.com/blog/2010/09/student-loan-debt-credit-card-debt/
I print this off and/or email it occasionally to folks with kids who are entering the college years.
Regards,
Cooter
Eh that dude is a moron, he obviously didnt do it right and wasnt motivated enough to pass the bar. As a law student I saw the law change in 98. After that I stopped getting "Student Loans" I simply paid tuition with credit cards and when the fuckers played their "universal default" BS ie you miss a payment to one card company we jack your rates up 25% even though your account is current and accessed the credit at a fixed for life of loan at 3% we jack you rate up. Yeah I fucked them Citibanq, Chase and Chemical out of 50K and told then if they wanted their cash to sue me. They never came to court to litigate the bs rates that violated state usery laws.
I admire your enthusiasm but you are crazy to think that it won't be the taxpayers that take it in the bunghole.
Well, if he'd gone to Medical School, perhaps.
"I admire your enthusiasm but you are crazy to think that it won't be the taxpayers that take it in the bunghole."
Fuck the taxpayers too....they either voted for this shit (politicians and the central bankers that come with them....not to mention not excoriating their banker neighbors) or they are too chicken shit and/or too small in number to vote them out and change the banking laws in the first place.
Fuck the banks and the taxpayers....they all deserve what's coming....corrupt pieces of shit all of them....and fuck this country too.
Great point.
Yup. Brainless fools everywhere I look. I'm not going down with this ship if I can help it.
Just check every box on the application other than caucasion, and watch the grants roll in. Be sure to include your struggles as a gblt teen, while fighting for the planet, in the essay.
http://www.guardian.co.uk/world/2013/may/28/christians-discrimination-ca...
"I was born a poor black child..."
From "The Jerk" with Steve Martin:
http://www.youtube.com/watch?v=O7why8Xo_RQ
Back in the old days the first thing you did as a newly-minted doctor (or lawyer, I guess) was declare bankruptcy right after you threw your funny looking graduation hat in the air. It's the reason they made these loans non-dischargable in the first place. Well, that's all over with now, I guess.
If you think about it in a certain way, it all makes sense. The colleges pretend to educate students and the students pretend they're going to pay back their loans for the pretend educations. And the government, being the only source of these student loans now, pretends they're going to be paid back by those students who wend to the colleges to get their pretend educations.
See, not so hard to understand. And nobody got hurt (except the taxpayer, of course, but who gives a flying fuck about them any more?).
"And nobody got hurt" - except for every average person everywhere. This results in the misallocation of capital (including the lining of many, many pockets up and down the line) and great damage to the real economy, which beyond profit motive, should exist to provide essentials and beyond, for folks, their children, and grandchildren.
Krugmania stimulus.
Broken shit everywhere.
I have a hard time believing that. So you're saying everyone who took a loan just pulled an Animal House and defaulted? In what decade? It wasn't the 1980s or 1990s, that's for damn sure. And college attendance was much lower in earlier decades.
"That lender exists to make money to help Pennsylvania students afford college"
Instead of a red arrow, responding with written communication is allowed as well.
If you believe the quoted sentence above, then good luck to you. The goal was to make debt slaves out of all students. They accomplished it. It was no accident, and to blame the students is frankly, laughable.
Herd: "The goal was to make debt slaves out of all students. They accomplished it. It was no accident, and to blame the students is frankly, laughable."
People (still) have responsibility for their actions, despite what anybody says, or the crazy actions of a runaway goobermint, or criminal crony capitalists. The predators: the bankstas and debt addicted politicians, as well as the 'victims': the students, their parents, our debt addicted culture - are all to blame. We needn't assign equal portions of blame - but there is some to be levied to all on that list. Students and parents still have a heart and a soul, right, and should know that something for nothing, or something at the expense of all future generations, and/or a massive deflationary loan default, or some future mega or hyperinflation (if they happen to connect all the ramifications) hurting hundreds and hundreds of millions at some future date certain, is surely wrong. Don't ya think?
These loans are sold to 18 yr old kids. 18 yr old kids don't have the life experience necessary to make a judgment as to whether this is a good deal. It's kind of interesting that the military also recruits a ton of 18 yr old kids and makes all of these promises then sends them off to war. And there is never a quick, easy answer to "How much is this going to really cost me?" "What is the success rate?" "What can I expect to get out of this?" Our whole lives growing up we are told about the magic of going to college, by our parents, our teachers, our school counselors, by everyone around us. So if that's all you know, how would you do anything different? An education should be a good thing. But the pricing structure and economics of it in this generation make it kind of a lousy deal.
I had a pretty decent idea of all of that when I was 18. I knew loans were bad so I only borrowed what I needed and no more. A lot of kids took those loans and bought cars, motorcycles, computers, stereos, paid rent, partied, etc. My idiot sister charged a whole semester's tuition on a credit card. That hurt. Stupid is as stupid does. I just wish people who know better would not be so fucking greedy all the time. There's no need to stick it to even dumb folks once you're a multi-millionaire. It's just sociopathic.
The military? Forget that! No father in his right mind would ever let his kids get caught up in that massive parade of bullshit. Over my dead body.
acidradio: "18 yr old kids don't have the life experience necessary to make a judgment as to whether this is a good deal. It's kind of interesting that the military also recruits a ton of 18 yr old kids and makes all of these promises then sends them off to war."
And what about their parents and other advisors? Is no one responsible for anything anymore? Are the bankstas our ultimate boogey men that absolves all of us from any responsibility. What a crazy notion that is. And untrue. I agree that an 18 year old is being taken, but so is the entire society in many, many ways up and down the line, and most of us, in the USA anyhow, seem OK with that. Where's the outrage about all the debt enslavement - including not playing along with these insane bubbles?
acidradio: "make it kind of a lousy deal."
Yeah, I'll say, and especially if we're going to discharge almost a trillion in debt onto future generations - it's REALLY a lousy deal for them!"
OK, so student loans will cause the USD to lose reserve currency status, not the gov't deficit spending, the military industrial complex, bank bailouts...
It was the student loans that broke the camels back. Gotcha.
I get what you are trying to say, my view is, the student is about 25-40% of the student loan problem. The educational and lending institutions take most of the blame in this student loan debacle.
But in terms of contributing to nearly inevitable hyperinflation of the USD? The students who borrowed student loans are about 3% responsible for that. Wall St (and City of London) and Congress take the lions share of the blame for that one.
Herd - thanks for assigning some blame to the students and parents - that is reality. I agree, it's not as much as to the predators - but the parents, and family advisors should know better than to saddle their kids and family with all that debt in some casino bet on a future job - especially one that's beholden to the whim of others.
Please read the Uniform Commercial Code at Cornell Law edu. The bankers gave the student a fake loan with fake credit. The student should be able to give the bankers a fake amount of money back-- like for like, or value for value. Instead the bankers gave the student a fake loan with fake credit, and they expect the student to pay back fiat dollars or sweat labor dollars plus interest for the rest of his life.
This lawyer-in-the-making didn't know how to discharge his debt by himself because he didn't read between the lines of the Uniform Commercial Code, but he at least managed to get his lawyer to discharge some of the fake loan credit for him. If the student had been more astute, he could have given the bankers an "on-demand" promissory note on each presentment of the series and he could have discharged his debt in total.
What I'm trying to tell you is that the monetary system is fake. That there are two classes of people in this world: those who discharge debt and manage their commercial affairs and those who pay off these fake loans with labor wages.
The accounting for all these loans operates under color of law. It is treated as real, but it's not real. That is how these bankers/freemasonry people have managed to support a two-tiered system of discharge/payment all these years.
There is no further responsibility due to a corrupt political/economic system that has been running since 1913 or at the establishment of the Fed, central private bank.
Please crawl into whatever hole you came out of because that is utter bullshit. I'll bet you can go on and on about the yellow-fringed US flags that denote "Admiralty" courts, too.
nice to see you around kayl
That's great that Greenspan and the Bernanke consulted you about their future decisions before you committed to a 30 year capital investment loan in yourself.
Me? I didn't get the consult or I might have done something completely different. As it is, the rug got pulled out half-way through it.
Bichez!
I've dealt with PHEAA as a student loan borrower. I've dealt with Fannie as a managmenet consultant. PHEAA makes Fannie look benevolent in comparison.
Some of you people are way too vindictive. Have you been paying attention? Or is this like hazing in your mind? (I suffered so you will suffer in turn!)
OBVIOIUSLY the goal is to reinstitute peonage in a real way. What kind of loan is "non-dischargeable"? WTF? If there is no risk of walking away, what's with the exorbitant interest charged on a compounding basis? My expensive, student loan financed MBA tells me the main reason for interest is to compensate for risk ... not to be the cash cow (banksters learn quick, don't they?)
Fact is, the student loan laws are the best laws bankster cash can buy. They are immoral and students and their parents, raised on bromides that haven't applied in fifty years, are not morally culpable any more than the farmers and Celentes of MFGlobal are culpable at their fleecing.
You absolutely know with certainty that these are "Predatory" loans to students? How damn clueless would someone have to be to reach that conclusion?
This dumb butt went to the lender, promised to repay the money when education finished, and offered NO collateral. This was a LOAN transaction with known and agreed repayment terms. After completing the advanced education the dumb butt was unable to pass the Bar Exam. We know from observation of the great number of incompetent lawyers that passing the Bar Exam cannot be much of a challenge,
Maybe if this fine Spuire from Cockup had actually made an effort to absorb the law school material rather than, maybe beer and dope, he would be able to join the esteemed ranks of Predator Lawyer.
I hold no esteem for a class of subhuman which "always get's their cut of 30% to 75%" .... they are the ones who need to take a hit in the wallet. I say ObamaLawcare .... all lawyers now make $20 per hour.
This guy is now a proud Alum of Willimette Law School...BTW, where is Willamette?
I think it is near Gillette, and Schick, Wisconsin (?).
Oregon, the land of damp and mold.
It's right next to East Bumblefuck.
Why is the bank any more predatory than the school that offered a pig-in-a-poke and pretended to educate this cat?
They took the money and produced failure.
Additionally, he DID NOT fail school, so clearly in their opinion, he WAS PROPERLY doing the coursework....
Yet he failed the state's standard test 2 times. How many other of their students PASSED through their school, yet
failed the standards set by the professions of the outside world?
No rsponsbility w/the school?
Perhaps the school who took the money should also take half the financial hit!
Responsibility above the level of the individual!?!?
Surely, you jest.
Only if everyone in the school failed and then it's an investigation of some sort. Rewarding the school slacker for doing his level worst? One of the times he was to take the Bar but failed was due to car trouble. How is that related to the school?
By the time you graduate college you're supposed to figure these life things out for yourself. Whether you do or not is another question but that's sort of social Darwinism.
The banks loaned nothing but 'credit' made up out of thin air. The 'education system' is a farce, few students are educated as to the nature of the debt/tax/'money' slave system in which they are entrapped. Few students learn how to think logicallly or make rational arguments.
Of course, the banks making the 'loans' (of nothing) . . . are bailed out by the very people who they screw over - - - whether those serfs like it or not. They don't have a voice because 'their' politicians are bought off.
And now this guy will need to pay taxes for the 'debt' relief he received.
The criminals definitely run this place.
What a country !
Herd: "Why does anyone have to be made whole? What am I missing?....Oh, loans to students will go down, you say? Good. Tuition will follow."
Tuition will follow? I think you're assuming we have a market and stable money. Aside from that, whether it's AIG, Washington Mutual, GM or student loans, someone is always left holding the debt default/bailout bag, and guess what, it aint the bankstas, nor the crooked politicians - it'll be we the working people - the true debt slaves. And what'll happen to the average Joe and Jolene when not even the FED can make up a farcical USG Bond market? Then the house of cards falls, and the whole lot who are unprepared will get chewed up and spit out in a much more accelerated fashion than they are right now.
Perhaps it's just more farce added onto the farcical, imaginary economy brought to you by the CON-FED Obummer.
No. Bailout is bad. Assholes that made the loans should lose, plain and simple. How is the taxpayer "responsible"? In the end it shall be anyone that is a bond holder or share holder in the bank that takes the hit! No more fuckin bailouts.
I look at it this way....the banksters have already been bailed out to the tune of trillions. So some poor schmucks get their student loans discharged? Good for them.
Oh and Tyler, we're never going to pay off the national debt so why bitch about it?
Class action lawyers will jump all over this shit eventually. They'll figure a way to make money on this.
It's only ripe for class action if you have some type of "predatory loan" cause of action or the like... otherwise, bankruptcy is an inherently individual endeavor... all with their own unique facts and circumstances. Apparently this guy was a "good guy" in the court's eyes for trying to "hard" to repay the loans... who knows whether the next guy will have the same facts in his back pocket.
Its the ninth circuit FFS. This will be reversed like all their other rulings.
Exactly- it's a cute story, but has zero chance of not being reversed.....
Mayhaps time to drag out that olde Fraudulent Conveyance principle
Hi Sweetness,
I used to bring this idea up all the time. I gave up. They can't afford to enforce the law because everyone's got skin in this game. Imagine most (all?) contracts null and void. Home loans, education loans, CDSs, ETFs, shit I best not start this list...
Collateral looks like the problem according to some thinkers around here (righteous) but what underpins even that issue?
TRUST. There is no collateral, anywhere, if all of the contracts fall through. Oh man.
REVOLUTION BITCHEZ!!!!
STUDENT BODY RIOT!!!
I don't care for the tone of this article. Good for him, and fuck the bank - and I don't give a sh*t who is backstopping it. Let it all burn, the quicker the better.
Single this guy out, after every fat cat and connected shyster rapes the entire nation, daily?
He should appeal and get every dime of it forgiven.
Again, good for him, and may 10 million similar lawsuits bloom.
Oregon stoner locks his keys in the car and can't take the test for the third time. Individuals need to take resposibility for their own actions at some point or we all implode along with them. Just like when a guy buys a house they can barely afford and then suddenly when the price drops they are over their head and the property is quickly under water. Are the banks at fault. Probably, to a degree but the largest fault is with the individual. If that responsibility is lost capitalism fails. Bear in mind the bank bailouts were another form of individuals not taking responsibility. They should have been closed down and many if not all of those ceo's jailed. The current administratin has not gone after anyone compared to past crisis.
http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/untouchables/were-bankers-jailed-in-past-financial-crises/
RafterManFMJ, I share your misgivings about the article and was surprised at how uncritical the author is of the societal institutions (like academia which admits way more students than can ever be employed in various fields) that prosper off this human misery.
I'm with you, fuck the banks and the shysters. We fought a revolution in 1776 to end indentured servitude and it may be time we fight it again!
+1...
and, FUCK YOU MIKE, and your parents too!
amen, yet though mine hang over my head like an albatross, there is something to be said about fulfilling obligations
There's also something to be said about a completely retarded concept such as "non-dischargeable".
If you go bankrupt, debts should be wiped clean. No fucking institution has a God given *right* to be repaid - that's what the fucking risk premium is there for, plus it's the obligation of the banks or equivalents to do their due diligence *before* handing over the cash.
Besides, the alternative is debt slavery, and the banks will be your masters.
Was that an added condition after the loan was made?
As a student, is there a *real* alternative to non-dischargeable?
Yeah, learn a productive trade instead... apprenticeship is alive and well... it just takes some ingenuity and people skills.
Yes there is. Do not take the loan and pay as you go, as many of us did.
There are just too many "Get out of Jail Free" cards for those in the USA today who refuse to live within their means.
That option does not exist today. Tuition rates are rising at - what - 8-10% on an annual basis.
It doesn't exist today, but it sure as shit is going to exist tomorrow. Universities are going to go out of business in droves. Those that don't are going to have to slash costs--and tuition-- by 80%. It's going to be fucking fantastic.
Here is what the district bankruptcy court stated:
" Attending law school was a guaranteed way to ensure financial stability. For current graduates, however, this is no longer true, due in large part to the high cost of law school tuition. Forbes magazine reports that, from 1989 to 2009, the average cost of college tuition increased by 71%; in the same amount of time, the cost of law school tuition increased 317%. In addition, law school tuition has risen at twice the rate of inflation and at four times the rate of wage growth. Accordingly, with the exception of the independently wealthy, students must take out loans in order to finance their degrees.
While the exact amount of debt that a student must incur in order to obtain a law degree depends on a number of factors, the current national estimate is $100, 000. Despite the relatively low cost of living, Oregon's students face a similar amount of debt upon graduation. Based on U.S. News and World Report's 2010 census, the average Lewis and Clark law student graduated with $105, 928 in debt, the average University of Oregon law student graduated with $91, 353 in debt, and the average Willamette University law student graduated with $91, 347 in debt.
While the cost of law school is, alone, problematic, making matters worse is the post-graduate job market; the probability of employment upon graduation, especially at a reasonably well-paying job, is low. Despite reports that the economy is improving, the number of entry-level associate positions continues to shrink. By 2009, law students, even from top-tier law schools, were competing for half as many openings as the year before. As a result, the New York Times deemed 2009 "the most wrenching job search season in over 50 years."
Job prospects are not likely to improve in the immediate future. In fact, for the class of 2011, there are even fewer employment opportunities, as those graduates must compete against unemployed graduates from previous years for the same limited number of entry-level positions. For example, in 2010, there were 382, 828 applicants for clerkship positions with 874 federal judges, each of whom hires one to three clerks per year. The New York Times attributed the overwhelming abundance of candidates to the fact that "more graduates [from previous years] are also competing for (and getting) these positions." The most recent statistics indicate that, through the year 2018, there will only be 25, 000 openings for the law schools' 45, 000 new graduates each year."
Queue the lawyer jokes...
To borrow an expression from McDawnolds ....I'm Luvin it!!! Universities having to cut payroll, bloviating slack jawed communist professors getting their pay cut to shitty little paychecks ..... YAHOO!
I can't wait to read about all those PH'ds ..... dropping credentials from their names so that they can get a job at McDonalds. This is truely a gift. Only STEM will exist after this. Business degree .... dead. Art degree .... dead. History, English, and Black-Studies .... dead. Communications degrees .... ha.
The list is going to wipe out the most wasteful institution next to public school, the government, and the military industrial complex.
This truly is a leak in the dam, the reason these lenders made these otherwise incredibly stupid loans is entirely due to the non-dischargability of said loans. If student loans move to being dischargable, we'll see rates pretty much at unsecured credit card terms, and if they want even $10K, their parents better co-sign and be gainfully employed.
For reasons cited by Panafrican Funk ..... this judgement has to be contested .... I see banks lining up behind this .... and fighting.
The alternative is pay as you go or don't go at all. It's not the worst thng in the world to work your way through college.
There used to be--take out a no-doc mortgage in a rapidly rising real estate market. Then take out a home equity line on the property. Pay off the student loans. Default on both the mortgage and the HELOC. Declare bankruptcy. Done.
Take advantage of all the credit card apps floating all over campus, get loads of credit pay it all back by kiting it so you have 350k in credit lines when you hit grad school, then dont do "student" loans do credit card loans that are dischargeable!
No kid knows fuck-all about loans or interest rates when they come out of high school. You can say thats their fault if you are so inclined.
Every human being knows that you pay back what you borrow.
Intimate knowledge of interest rates in ancillary.
You give the same allowances to students as the welfare state. I'd be careful -- this crowd can turn on you like a school of piranhas stripping a pig carcass.
Yo're fucking crazy. So people are born with a knowledge of usury, compound interest?
You pay back MUCH MORE than you borrow. Born yesterday?
Do they need to be born with the knowledge, or should every reasonable person understand it by the time they're 18? I'm thinking that even the dumbest of the dumb understand that if you borrow X, then you'll have to pay back Y. The issue wasn't that he didn't know how much he'd have to repay, it's that the economy turned out differently than he anticipated and he couldn't earn as much as he expected. But please, keep championing a contemptuous view of humans (the same view that gives rise to the nanny state)...
Here's the problem with your argument: while the costs of the student loan are relatively easy to calculate, the future benefits of the college education are impossible to calculate. Therefore, no rational decision is possible, no matter how smart you are.
Combine that metaphysical fact, with the pressure kids feel when they are told that they will have no future without a college degree, and you have a system that is not just abusive, but corrupt.
The only morally, ethically, and rationally correct decision is to pay college tuition in cash, as you go. Any system that encourages different behavior is immoral, unethical, and irrational.
Bullshit... you're telling me that peer pressure is a basis for absolving people of liability for financial decisions? My fucking ass. This is like saying that everyone was right in buying a 20x income mcmansions and taking out helocs like robert wagner sells reverse mortgages... no fucking way. http://www.nizkor.org/features/fallacies/appeal-to-popularity.html
Here's the rub... if you can't, with any reasonable certainty, guaranty where you'll be in 4 years (it should only take 3 for undergrad, and only then if you can't get credit for prior work, but I digress), THEN YOU DON'T FUCKING GO. You're not admitting that students today and wickedly adventurous spectators... just like home ownership, if you borrow to do it, then you're a speculator... pure and simple.
Here's another news flash... the system has always been corrupt and always will be. Once you take the impetus away from the individual to make rational decisions, the system's corruption knows no bounds...
The answer is simple, don't bail out the lenders... and allow the students to discharge the debts in bankruptcy... give them a scarlet letter for making a donkey move (and partying like bosses on a 5 year vacation), and let them get on with their lives... all while the institutions shut their doors and the creditors go bust. This is the answer... and it's really, really simple.
PS, no one wants your fucking neofeudal bullshit where only wealthy people get access to higher education... so good luck with that one.
It's not a "financial decision" when only one side of the equation can be calculated.
Do you work in the real world? Try to get a project funded without being able to project an NPV or an IRR in any kind of convincing way. You will be laughed out of the room.
And where do you get this "neofeudal" bullshit?? Back in the days before student loans, hardworking young people from any level of society could pay their way through college. ANY college, assuming they worked hard enough.
You're telling me that borrowing $100,000 isn't a financial decision? It's literally a financial decision...
What you're saying is that no one should have funded the loans... fine, no doubt there... but you're being disingenuous by ignoring the fact that the students shouldn't have taken the loans either... it took two to tango in this situation... both equally as retarded.
The neofeudal statement comes from your statement that there should only be cash paid for college... this practically eliminates any chance for upward mobility... while it might be possible to pay your way through, the ability to borrow should not be prohibited among consenting adults... simple as that.
Actually, he's stating that the artificial market for loans created inflation and scalping, leading to no-one being able to attend University without said loans (or rich parents). i.e. In the '70s you could actually pay your way through University with a semi-job, since course fees were sane (and inflation hadn't hit the $, but different topic), something that is no longer possible. It also created an arms race between competing Universities where the academic gift / training was subsumed[1] by trinkets (housing block with pool! we have two gyms! you'll want to try our seven bars and nightclub!) in an effort to attract clients with fat loan checks.
I rarely agree with the man, but in this case his reasoning is 100% true.
[1] Ivy League probably kept their edge, but few others did. There's a reason Universities get ranked # country / world. If you're not going to a top 10 in the world, then...
First, that's not what he's saying...
Second, if you (and no one else) can afford school, then shouldn't that be a huge warning signal that it's in a bubble? Since when are you compelled to go to school? I advocate going to college at 16, but if you have to go later, then what is your excuse as an adult? The government forced you into a loan contract? Brought out a gun and put it to your head and handed you a pen? Please...
What happened was that every kid wanted to be rich without having to actually be productive... if I just go to college, then I can take it easy and jack off the rest of my life living out my dreams... well, they (we) got the first part right... and partied it up during college... and got a degree... but then the hangover came... it was inherently unrealistic.
The fact of the matter is that the kids who went to welding, HVAC, mechanic, plumbing, and small engine and appliance repair training have been handsomely rewarded... they earn honest livings and many want for nothing.
So was purchasing a home a financial decision? This sort of compulsive, idiotic consumer nonsense is driving me insane... you realize it's this same dismissive and contemptuous view of other people that gives rise for the need to protect them and therefore the welfare state, right? It's literally the foundation of modern liberal thinking. People are vastly smarter than you give them credit for... and, I assure you, that student loans will be written off in the end... and all of these folks will be bailed out of bad financial decisions.
I think I understand where you're coming from, so I'll be nice.
Look - there's literally no job now-a-days that doesn't require a degree, outside of menial service / retail industry. They literally all required a degree (your magic golden ticket) and all require "experience". If we're looking at plumbers, electricians etc, they need the same bits of paper, just from different sources (and for good reasons!). Hint: if you don't want to get sued, fry yourself or flood someone's home, you get your pieces of paper.
So, let's see: British Columbia (not the USA, Canada) - here's the costs of trade courses (warning PDF). Average is about $5k. Easy to find PDF, took 2 minutes, trouble free.
Let's look at America - list of Commercial Plumbing courses. Getting cost data out of the American system is a fucking pain in the ass, but I found some: Here. Average in-State cost is roughly $8k, out-State $16k. As far as I can tell, that's per annum, and most courses are 4 years + apprenticeship (another 4). I'm happy to be proved wrong here, the entire US system grates my goat and is painful to go through. Took me 15mins of Google-Fu, and the terms & conditions are still hidden, there's no PDF, no course base I can check and so on and so forth, let alone knowing which credentials they're providing and if they're IA (UA?) compliant: there's literally three layers of bullshit bureaucracy just on the internet to wade through for a plumbing course and I can assure you're I'm far more technically minded / Google-Fu'd up than most want-to-be plumbers. They have no chance.
So, that's roughly $24k living with no medical insurance, no job and having living expenses and so on put on this.
Getting the issue yet?
First, you do not need a college degree to get a votech job... that's laughable. If you hadn't guessed, there's quite a bit of a shortage of folks with real skills... everyone took the college route (to sit on their asses) and, as a result, too few went into trades. When was the last time you asked where your plumber graduated college?
Second, you're vastly overstating the costs of a votech degree. Most all of these jobs are a mix of apprenticeship and some basic course work. Essentially, you're working with a master/teacher part of the time and going to class part of the time. Often, the company or labor union puts on the school. If not, then you're working your way through. At worst, you have a local community college that works with local companies for job placement/training programs and it's very affordable. Also, 2 years is on the long end for course work...
Third, are you claiming that a negative net worth is preferred to no net worth?
Fourth, you're being dramatic and overly broad regarding the availability of jobs without a college degree... hell, I bet you can go on monster or indeed and find at least a dozen local jobs that pay as much or more than the average lawyer makes and that require no college degree... truckers, welders, and restaurant managers come to mind. I could build computers for a living, but do I have any degree in it? Nope... how did I learn? Well, I took all my yard mowing money and bought a bunch of computer components... eventually, I figured out how to put them all together... magic.
If you want shit handed to you, then yes, you might have some trouble in the present environment... but, if you're able bodied and able minded, then you can succeed... it just takes getting the thumb out of your mouth first.
MachoMan - - - I agree with what you wrote.
Not only do you not need college to get a good job, you don't even need college to get a good education. As a matter of fact, going to most colleges today could be detrimental to becoming educated.
What do I mean ?
In the past, to be truly educated, someone needed to learn the skills of how to think. This included gathering evidence, logical thinking , communicating your views to others effectively, and putting ideas into action. These are the skills of the 'Trivium' - grammar, logic, and rhetoric. These skills were taught since the time of the ancient Greeks. This was learned by Americans up to about a century ago. In contrast many people today who have degrees in narrow technical fields are as vulnerable to propaganda as everyone else. They didnt learn how to apply the scientific method outside of their own narrow specialties.
IMO it would be smarter for a young person to pick up vocational skills with which he can make a good living - rather than end up with a B.A. and a job as a waiter or bartender after graduation. He can then spend a lifetime becoming truly educated in the manner described earlier.
In the future america of apprenticeship and self employment, the people with this type of education (self made/practical) are going to be incredibly obvious to pick out... and will ultimately be the only ones who are successful.
Again, I'll be generous.
#1 In any modern State, you want your plumber to have certain credentials to do work, to cut out the cowboys. That's what I listed: VOCATIONAL DEGREES THAT TEACH SKILLS AND END UP WITH A CERTIFICATE PROVING IT.
#2 I'm not vastly overstating the costs: I gave you the fucking price list, jesus wept. Here's the data: oh, you don't like the REAL WORLD, I guess you can ignore it then.
#3 I'm suggesting that coming up with that kind of cash, with no other support (medically, food whatever) isn't as easy as it once was, especially since rents / medical costs are now through the roof (~$900 / month in cheap areas, $2k for a broken wrist).
#4 No, I'm not. Truckers - need a cert for LGV driving and a reference; Welders - definitely need a fucking cert, especially for skilled work- WUT?; Manager of restaurant - TROLOLOL. Do you mean franchise or single business owned? Cause McD's and Burger King and Wendys now offer their own fucking degrees in management before you run their franchises.
Again, at a guess, you're over 50 and have no fucking clue how the modern world works. Seriously. You're a dinosaur. I was nice before, but now fuck off and die, before I school you. Dog years are 7 times less than ours, so you've not much left.
You have no idea how the modern economy works. Now go die on your porch my old wolfhound, because you're painfully fucking out of the loop.
First, you specifically included information for a 4 year college degree in your earlier post... you can ignore that you did so, but at the expense of credibility. Again, this has nothing to do with trade school (but I do fancy your re-direction). In other words, the only thing you ask of a plumber is whether he is certified, not what school he graduated from... not what his class rank was... etc. In short, any certification will do, so long as it gets you certified. [note: this has a huge impact on cost].
Second, I realize it's tempting to create straw men and fabrications, but please refrain. Nowhere in my post did I ever state or insinuate that certification was not required for trade work...
Third, you admittedly shit on your own price list as being innacurate... or, at the very least, had significant misgivings about its accuracy. If you're now trying to turn those doubts into certainty, well... again, this is at the expense of credibility. If you can't bother to believe in them, then why would you expect us? Here's a brochure from a technical college in bfe arkansas: http://www.blackrivertech.org/wp-content/uploads/2011/11/BRTC-2012-2013-... . Pg. 26 lists the cost per hour... and then towards the back of the handbook, there are the programs... You're looking at $1,155 per semester... for say a 2 year degree (4 semesters) in auto mechanics (it should be noted that you get a certification after your first year and the second year offers a second certification). Is this too expensive?
Fourth, did you not read my post regarding the fact that many of the employers actually train you for the jobs (often paid)? This includes the necessary coursework to gain relevant certifications... This includes trucking companies, on down the line...
Fifth, do you really think that everyone working at every trade is actually licensed in the trade? That's not how anything works... unless otherwise prohibited by law, businesses simply have a single patriarch/matriarch who is certified and then this person farms out the rest of the work... take a law firm for example... the secretaries do as much legal work as the lawyers (drafting documents, client consults, etc.). Some firms won't hire unless you have the certification... but that's a company requirement, not necessarily a legal requirement.
Sixth, yes... the cost of education is expensive for americans strapped to pay for gas... however, it is not insurmountable... in many locations, both trade school and college are still very affordable... one might want to do some research before diving head first.
PS, since you're new here (although you have the same argument style as chumba), you're probably unfamiliar with the countless posts I've made referencing my age and vocations... needless to say, you're incredibly far off the mark regarding my age and understanding of the modern world. But please keep up the ad hominems, they really bolster your already great arguments.
"and all of these folks will be bailed out of bad financial decisions."
The other side to the parasite (the bankstas, politicians, those leeching off the system) is the host (all 'good citizens' trying to abide by historical and moral standards, rules and laws). To some extent we've allowed ourselves to be the host (unless we're also 'not responsible.') Responsiblity enough to go around. Question is when will enough of the host rise up and say 'ENOUGH!'
Buckaroo Banzai: "It's not a "financial decision" when only one side of the equation can be calculated."
This guy 'bet the farm' (really our farm if the taxpayers foot the bill), or at least a very large non-dischargable loan, that he was going to be able to make $200/hour, vs. $20/hour. Perhaps it wasn't a 'financial decision' but it sure was a casino gamble on his part. We shouldn't reward that kind of a shoot the moon bet, with other people's money. As you've been saying above, perhaps the only rational decision is to pay as you go (or close to it). But we're so far from that ideal, it's not even funny. These types of loans at this magnitude, with our money, should not be allowed.
This is only emblematic of about 10 other areas in our economy - TBTF banks, housing, new autos every 2 years, etc., where our economic system has broken down to do the same thing, and it's why this runaway train has no brakes and is going to hurtle into the gulch below - damn the consequences.
Yeah you're right.
Take the guy out back and shoot him, with the others.
Buckaroo Banzai, yours may be the best comment of the entire thread. My sincere compliments on a powerful idea simply and eloquently stated. (Another solution, requiring a major societal consciousness shift, might be a term of universal service for all citizens to be followed by free tuition and fees from a grateful nation. That does run afoul of the 13-14th Amendments, however,)
Case in point, Herd: I borrowed $51,000 to get me through undergrad and law school in the 80's and 90's, and every loan I took out was at a nominal interest rate of 7-8%. (And yes, I passed the bar the 1st time in every state I took it.) I have, over the years, repaid them bastards $65,000, which equates to repayment of all the principal plus 28% interest on the principal, except that every time I had an income blip, they were happy to defer my payments, capitalize the interest, and then to charge their usurious interest-upon-interest. They now say I owe over $100,000.
Fuck them. They are not getting one more thin dime from me, pre-65 or otherwise. I was planning to do just what this kid (and his lawyers) did, and I'm damned happy to see the trail blazed. I am also grateful that the 9th Circuit was the venue.
You are absolutely correct sir. PHEAA was NOT in the business of "helping kids afford college," any more than Bernanke is in the business of providing capital funding to Joe Sixpack.
Newt,
You might not understand how interest is computed. Do not try to practice law in any field where computation is necessary. maybe you can get employment with the government. The IRS is run by attorneys who cannot compute 1/4th of 300.
You have owed some of the money for almost 30 years and were not even staying current on the interest. Sure, you have to pay Interest upon the Interest you accumulated. What did you believe Repayment meant? Send in a little when you felt like you had a little money left after beer and vacations?
+1 lol. Also, lawyers cannot do math... period.
"What did you believe Repayment meant"
Christians were forbidden from charging usury to one another in medieval times. Meaning, compound interest was illegal. Not SIMPLE INTEREST. Look at a graph and you willl see the rather crucial distinction between the two.
Kids aren't taught about compound interest, or debt slavery, from K- 12. Bottom line. You can say the kids are dumb, my view is, someone benefits from the kids not knowing anything about compound interest BEFORE taking on student loans.
And guess what, the parents don't know what compound interest is either! People think if they buy a house for $400k it costs $400k!
This is ridiculous... do you need to know complex mathematics to multiply your monthly payment by the number of payments you'll have to make over the life of a loan? If your position is that people are incapable of knowing basic math, then you're completely wrong. If your position is that people do not know anything about money because someone keeps the secret away from them, then you're completely wrong.
You want to know the truth? People are incentivized not to give a shit.... because there are not any consequences... there is no debtors prison, everyone else has bad credit, and if worse comes to worse, the free shit army will vote itself the treasury.
If you want to make excuses in perpetuity for peoples' bad choices, then be my guest... but you'll never solve the problem.
I did not obfuscate anything there, which is why you can feel free to snark about "computations." Neither did I disclose all other factors in play. For a quant, this response is real cute. For humans, it says something else entirely.
Agreed. Some of the macho posters here remind me of Shylock more than a human being.
Nice how you buy in to the immoral fraud of compaound interest. Can I write my own expression and become wealthy on it, sucking the blood out of real men? e ^-rt bitchez! I'm rich I'm rich and all i did was play with my spreadsheet for a few minutes!
Now slave, serve yo massa!
Dude- you've had 30 YEARS to cover a $51K nut and you haven't done so?????? If you've passed the Bar in "numerous states", then clearly, you can WORK....
What- EXACTLY- have you been waiting for??? That's not even a car payment, for god's sake..... Do you own a car????
Time for that backup plan- "Welcome to Walmart"..... Which, had you done part time, you'd have paid this nut off 10 yrs ago....
First off, Jizz, I guess you missed the part where I'd paid $65,000 of that "$51K nut." I obviously did not, as AUGUST-us suggests, spend all on beer and vacations. It also has not been thirty years since I entered the workforce. It has been 26 since I first entered college. There are any number of other facts I could bring into this discussion (if one can call this a discussion) if I were inclined to do so. Which I am not.
It is interesting to see the knee-jerk assumptions you and others engage in. Interesting, and laughably, pathetically uninformed. Do you feel superior now?
Newt-
Seriously, are you making this up?
Oh my bad- so in TWENTY SIX YEARS, you haven't been able to pay off $51K of principal?
The monthly payment on $51K over 26 years isn't even a Kia payment, dude- wow.
By your own admission, you've passed the Bar in multiple states- so you're working as a lawyer....
You've already shown you don't understand compound interest.... I find that very odd, given most lawyers deal extensively with compound interest calculations.
All hostility aside, dude, it's time to man-up and take some personal responsibility- you're not making it in life, and your so-called hidden excuses as to why don't wash here- the Ninth isn't gonna get you off the hook, either- you should know their track record, if you really are a lawyer-
You are a dead-beat, pure and simple, and your attempts to paint yourself in any other light are pathetic.
Get off this forum, go get a part-time job at Dairy Queen, and pay off your obligation- YOU earned it.
Seriously, even 10 hours per week at Dairy Queen will cover your nut- go, spread some cheer and happiness, and do something productive in society, because clearly, you ain't doing that now......
I suppose if you give it some thought, a good case could be made that almost everyone is superior to a deadbeat lawyer.
Hypothetically speaking, of course.
"Borrow?!?"
Nobody 'borrowed' nothin'. We are talking about something else here. The 'money' was conjured out of thin air.
A TRUE lending relationship is when I lend YOU something I HAVE, meaning I lack it until it is repaid. If you don't repay, I lose. Where the fuck is the LACK on ANY banker's part after having "lent" $50T of Z1 credit into the FRN zone???? Have they been living as paupers all these years after lending all these FRNs out? I mean, surely they lent SOMETHING real, right? And when someone defaults, do these bankers end up LOSING permanently the value lent?
The whole fucking system is an OUTRIGHT fraud. The money powers belong to the people and must be run as a public utility. We have granted seigniorage and ultimate power to a bunch of crooks. Bankers are legalized parasites. They add NOTHING of value to this societal equation. EVERY function they perform could be performed by public utilities.
In fact, the reason true fiat currencies haven't worked is because BANKS through speculative attacks, have destroyed every one of them. The BOE used the Sterling Bill to destroy bimetallism and rape nations. There is NO reason whatsoever that fictitious money could not be "lent" by the US Treasury, or as Friedman maintained, printed by a fucking computer.
(Disclaimer: I stole the foregoing rant from some outraged ZeroHedger some months back. Wish I was as articulate.)