Higher Education Insanity -- 8th Circuit Court rules that a poor guy can't discharge $350,000 student loan debt.

[halik]

Originally posted by: WhipperSnapper

Originally posted by: StrkI already posted an exert from the case, but here we go again. He left several jobs for personal reasons (I.e. his decision to leave), he doesn't pay rent and occasionally pays some child support on one child (he has two). He could get a job in his field making good money, but he just doesn't want to.

And he lives in Minnesota. I'm sure if he were to support himself for once, and considering he's 45 and still doesn't I doubt he will,

It would be good to know what the jobs he left paid and what the reasons were for leaving. Perhaps the jobs didn't pay all that well and he had good reasons for leaving; we don't know.

What evidence do you have that he could obtain a job working as an attorney? Note that Minnesota has one of the nation's highest registered attorney-to-population ratios and that it isn't a legal mecca like New York, Boston, or Washington, D.C. Who do you think would hire him and why would he be hired over a promising new graduate or over an attorney with a few years of experience who doesn't have any black marks on his resume?

It doesn't even come close to being relevant here AT ALL - If you have law school loans and alimony you have to pay, YOU DO NOT HAVE THE LUXURY TO QUIT FOR PERSONAL REASONS.

This kind of retarded, neo-lib altitude just boils my blood. You're a fucking adult and if you gotta pay 500/mo for your god damn kids and another 500/mo for your debts, then you keep your ass working. It's called being a man. :|

No wonder this country is going to shitter with this collective responsibility bs. It's the society's fault that this jackass was fucking around in college, had a bunch of kids, didn't feel like working and now he can't pay for the fun he had. Discharge his loans, all the other people with college loans that are doing the right thiing (myself included) will be the ones paying for this fuckup. Bah!

 

[Blackjack200]

Originally posted by: halik
It doesn't even come close to being relevant here AT ALL - If you have law school loans and alimony you have to pay, YOU DO NOT HAVE THE LUXURY TO QUIT FOR PERSONAL REASONS.

This kind of retarded, neo-lib altitude just boils my blood. You're a fucking adult and if you gotta pay 500/mo for your god damn kids and another 500/mo for your debts, then you keep your ass working. It's called being a man. :|

No wonder this country is going to shitter with this collective responsibility bs. It's the society's fault that this jackass was fucking around in college, had a bunch of kids, didn't feel like working and now he can't pay for the fun he had. Discharge this losers loans, all the other people with college loans that are doing the right thiing (myself included) will be the ones paying for this fuckup. Bah!

You've whipped yourself up into such a frenzy that you're not making sense anymore. Child support is not alimony.

For all the breast beating about being manly, personal responsibility, and countries going into the shitter; a huge debt load (In this case 7x what he could make in a year) is enough to completely demotivate just about anyone.

That's why you don't lend someone $350,000 without any collateral.

 

[miniMUNCH]

His problem is that he took too long to give up.

The lenders and courts pointed out that Jesperson hadn't made a single voluntary payment toward his student loans. That's true, Jesperson said.

"I'm just like everyone else on the planet," he said. "I've been surviving. Housing and food and diapers."

The ruling stated that Jesperson should have taken advantage of a program that would have allowed him to make payments based on his income and family's poverty level -- regardless of his total unpaid student debt. Lenders argued that if Jesperson had used the program, his loan payments would have equaled no more than $629 per month.

If, after 25 years, he had not repaid the debt, the unpaid portion would be forgiven

That seems pretty good to me...

I have little sympathy for folks who rack up huge debt in college and graduate school / med school / law school. These folks DEFINITELY should be able pull out a calculator and figure out what their payments are gonna be and do some simple math to figure out if they do it.

So his loans should be forgiven because he's an idiot?

 

[WhipperSnapper]

Originally posted by: miniMUNCHI have little sympathy for folks who rack up huge debt in college and graduate school / med school / law school. These folks DEFINITELY should be able pull out a calculator and figure out what their payments are gonna be and do some simple math to figure out if they do it.

So his loans should be forgiven because he's an idiot?

But part of the calculation is whether or not you'll be able to pay off the loans. If you have been lied to by our society, the government, intellectuals, the media, and the universities and indoctrinated since early childhood into believing that higher education is essentially a guarantor of at least middle class economic success, then it might be difficult to realize that your chances of being able to pay off the loans are slim. (Just read the newspaper, listen to the radio, or turn on the TV and you'll probably hear a reference to a stale report about how college graduates do so much better than high school graduates bandied about not to mention more calls for higher education and claims that higher education is the solution to our nation's economic problems.)

 

[ericlp]

well, he could get out of by suicide.

But, if he had the brains to graduate out of law school, or maybe you don't need brains these days. I would think he could figure out his financial difficulties. We all make our own beds in life ... now it's time to sleep in them.

Meanwhile his interest is accruing on his debt. You gotta wonder tho, how many are getting off on paying back student loans I am sure this was not the ONLY case and I am sure some do get a free ride. I suppose he could wait a few years and try it again with a different judge? Seems to be the American Way.

 

[sactoking]

Originally posted by: CycloWizard
Yes, being a tenured professor is usually a cushy job. But to get tenure, one must:
[*]get a PhD (or equivalent) - ~10 years of college-level courses and research, usually accompanied by depression, incurring massive debt, and living below the poverty line, and that's if you're getting paid to be a grad student[/li]
[*]get a post-doc position (2-6 years), usually paying around $40k/yr, which is less than what a lot of PhD's would have made with their bachelors degree (but that's what the government mandates for post-doc salaries via NIH and NSF, who fund most of them)[/li]
[*]get a tenure-track position (process alone can take 2 years, then you are completely at the mercy of the tenure committee for seven more years with no job security), pulling in anywhere from $50-80k, depending on the school and the discipline. Again, most of these guys would be making that already by now if they had gone into industry with a BS degree. Work 80+ hours per week. Responsible for funding your own research, getting published, teaching, and mentoring students.[/li]
[*]If the funding gods and the fickle peer review process smile on you, you might get tenure. In this case, you'll pull in anywhere from $60k-110k, depending on school and discipline, which is usually less than what you could have started with in industry when you first graduated with a PhD. By this point, you're pushing 40 and are, at best, at the same level of income as your undergrad classmates in the same discipline. Future growth potential is very limited.[/li]

Really? Because most of my tenured professors went the route of:

• Get a B.A./B.S.

• Get a job.

• Get work experience.

• Get a professional degree or designation.

• Get a Ph.D.

• Leave the stress of the business world after making millions.

• Get job teaching for $120,000+ with guaranteed tenure.

• Milk state benefits.

 

[WhipperSnapper]

Originally posted by: ericlp
well, he could get out of by suicide.

Hopefully that would discharge it. I can't say that I would be at all surprised though if the government and the lenders also tried to attach it to his wife and/or children. The lenders would if they could.

This goes off topic a bit, but you do have to wonder what would happen if a painless, peaceful suicide (for any reason, for adults) were fully legal in this country. I suspect that suicide rates would increase since the barrier to committing suicide would be lowered (fear of pain, fear of surviving and being crippled).

But, if he had the brains to graduate out of law school, or maybe you don't need brains these days. I would think he could figure out his financial difficulties. We all make our own beds in life ... now it's time to sleep in them.

I'm sure he's already figured it out--get a job at a large law firm, build a successful solo personal injury practice, work your way up to partner at a small or medium-sized firm. The problem involves actually being able to do that when a huge amount of people are trying to do the same thing.

I can tell you how to win an NFL football game--tackle the other players, sack their quarterback, block his passes, complete your own passes, and run all over the opposition. However, it's much easier to say that then it is to actually do it. (If 11 clones of myself lined up on a football field against an NFL team, I'm sure Team Whippersnapper would get driven into ground on the first snap--but I do know what you need to do to win the game.)

Meanwhile his interest is accruing on his debt. You gotta wonder tho, how many are getting off on paying back student loans I am sure this was not the ONLY case and I am sure some do get a free ride. I suppose he could wait a few years and try it again with a different judge? Seems to be the American Way.

I would be interested to read statistics about student loan defaults in this economy. I suspect that they are increasing. Does anyone know anybody who has defaulted on their student loans? What happened to them?

 

[halik]

Originally posted by: Blackjack200

Originally posted by: halik
It doesn't even come close to being relevant here AT ALL - If you have law school loans and alimony you have to pay, YOU DO NOT HAVE THE LUXURY TO QUIT FOR PERSONAL REASONS.

This kind of retarded, neo-lib altitude just boils my blood. You're a fucking adult and if you gotta pay 500/mo for your god damn kids and another 500/mo for your debts, then you keep your ass working. It's called being a man. :|

No wonder this country is going to shitter with this collective responsibility bs. It's the society's fault that this jackass was fucking around in college, had a bunch of kids, didn't feel like working and now he can't pay for the fun he had. Discharge this losers loans, all the other people with college loans that are doing the right thiing (myself included) will be the ones paying for this fuckup. Bah!

You've whipped yourself up into such a frenzy that you're not making sense anymore. Child support is not alimony.

For all the breast beating about being manly, personal responsibility, and countries going into the shitter; a huge debt load (In this case 7x what he could make in a year) is enough to completely demotivate just about anyone.

That's why you don't lend someone $350,000 without any collateral.

My mistake, where I'm from alimony and child support is one and the same.

There is nothing wrong with lending people money precisely because of the reason we're talking about - the debt cannot be discharged in bankruptcy. You know the person HAS to pay it back. That's why you can lend people 350K and feel good about it.

The fact that the guy is a total fuck up at life has nothing to do with decision to lend money for education; a guy that goes to a top undergrad and then say john hopkins med school can rack up more than that with ease. The difference is that one is a deadbeat trying to get out of his obligations and the other just needs a lot of money to get thru school.


Also the new obama plan lets you discharge loans after 25 years if you pay some sort of a multiple of your monthy gross.

 

[WhipperSnapper]

Originally posted by: halikAlso the new obama plan lets you discharge loans after 25 years if you pay some sort of a multiple of your monthy gross.

Does this apply to both federal and private loans or only to federal loans? Also, aren't the federal student loans capped at about $56,000 total? Even with the new repayment plan, he'd still have just under $300,000 in private loans to deal with.

 

[halik]

Originally posted by: WhipperSnapper

Originally posted by: halikAlso the new obama plan lets you discharge loans after 25 years if you pay some sort of a multiple of your monthy gross.

Does this apply to both federal and private loans or only to federal loans? Also, aren't the federal student loans capped at about $56,000 total? Even with the new repayment plan, he'd still have just under $300,000 in private loans to deal with.

I think stafford may be, but the grad plus loans have no limit (up to the full cost of your education). My room mate is a Michigan law grad (as of this may) and all of his loans are gubment.

The only issue with the Obama loan thing is that, in most cases, after 25 years you end up paying more money than if you had paid it off with a regular schedule plan. So I guess it really depends how high is you discount rate (how much is a dollar next year worth to you now)

 

[rpanic]

The guy will probably just take a PE class at his local JC for the rest of his life to keep the loans in deferment till he dies.

 

[miniMUNCH]

Originally posted by: WhipperSnapper

Originally posted by: miniMUNCHI have little sympathy for folks who rack up huge debt in college and graduate school / med school / law school. These folks DEFINITELY should be able pull out a calculator and figure out what their payments are gonna be and do some simple math to figure out if they do it.

So his loans should be forgiven because he's an idiot?

But part of the calculation is whether or not you'll be able to pay off the loans. If you have been lied to by our society, the government, intellectuals, the media, and the universities and indoctrinated since early childhood into believing that higher education is essentially a guarantor of at least middle class economic success, then it might be difficult to realize that your chances of being able to pay off the loans are slim. (Just read the newspaper, listen to the radio, or turn on the TV and you'll probably hear a reference to a stale report about how college graduates do so much better than high school graduates bandied about not to mention more calls for higher education and claims that higher education is the solution to our nation's economic problems.)

Dude... I went to grad school. I left a good paying job, sold a house, moved across the US to get a Ph.D. in chemical engineering. My wife and I had a baby while i was grad school and I had to pay 2k out of pocket on my sucky insurance deductible.

Yet I got through all my undergrad and 5 years of grad work with no debt. zero. none.

Why?

Because I understand simple economics and can do basic math... this guy obviously didn't. He probably does now (lol).

Plus he wanted to be a lawyer... if anything, I wouldn't feel sorry for him for that reason alone.

 

[CanOWorms]

He should just enroll in the Income-Based Repayment plan which limits his payments based on his income level & number of children. The loans are discharged after 10 years of public work or 25 years of private work.

 

[Vic]

Good.

 

[Vic]

Originally posted by: Fear No Evil
This thread is a perfect example of the emotional vs logical arguments that liberals often make. It started off as a OMG! How can this man on food stamps survive a debt like that? Of course we should forgive the loan.

Of course when LOGICAL conservatives look into it, its clear this guy is a deadbeat who is choosing not to pay his bills.

It must be nice to live in your pretty little black-and-white fantasy world.

 

[Codewiz]

This is pretty simple guys.

I graduated and had 20K in debt. It took me a year to find a job in my field but I still paid my student loan while earning $8/hour and paying for housing. This is a very simple question....

Can he afford to pay on the student loan debt(lets say $500/month)? Yes or No
If yes, then too bad. He has to pay because he signed up for the debt.

If you say no, then why not? He has the income to pay. If he loses his job then he can get a forbearance while he finds another job. Then he can continue paying.

This has NOTHING to do with the amount of money. It has everything to do with his ability to pay. It has been proven he has the ability to pay but chooses not to pay. Tough shit for him.

If he got into a horrible accident and couldn't work anymore then I would be willing to hear his arguments for wiping the debt clean in bankruptcy court.

 

[halik]

Originally posted by: Codewiz
This is pretty simple guys.

I graduated and had 20K in debt. It took me a year to find a job in my field but I still paid my student loan while earning $8/hour and paying for housing. This is a very simple question....

Can he afford to pay on the student loan debt(lets say $500/month)? Yes or No
If yes, then too bad. He has to pay because he signed up for the debt.

If you say no, then why not? He has the income to pay. If he loses his job then he can get a forbearance while he finds another job. Then he can continue paying.

This has NOTHING to do with the amount of money. It has everything to do with his ability to pay. It has been proven he has the ability to pay but chooses not to pay. Tough shit for him.

If he got into a horrible accident and couldn't work anymore then I would be willing to hear his arguments for wiping the debt clean in bankruptcy court.

I believe disability and things of that sort are THE reason why they have the undue hardship clause. Not because you keep fucking in in life and then decide you don't wanna pay off your debt.

 

[TheSlamma]

I don't get it OP, we have too many people getting educated in this country? Then why are there so many people who don't believe in evolution in this country still?

I'm all for education, if this moron and his moronic lenders can't control their money that's a separate issue like codewiz just said a couple posts ago. People get in trouble with credit cards and buying dumb shit like Escalades and 4000 sq foot houses. Compared to those someone going to learn that thunder isn't angels bowling is fine by me and a lot less worse then the other BS Americans get themselves into trouble with.

 

[soccerballtux]

Originally posted by: Genx87

Originally posted by: soccerballtux
Usually you can't discharge it, it happens under the "undue hardship" clause. Did he argue for this?

Guys don't forget tuition costs wouldn't be so high if it weren't for government involvement in the first place-- free loans and Pell have done nothing but increase the price.

I think he had a hard time arguing this due to having what appears to be a 70k\year job.

He shouldn't-- that's still undue hardship. To pay that off he'd have to live on $20k for 10 years, maybe more, because of the interest. Good luck trying to run a family....

Get the gov't out of the situation first (student loans) and then things like this will fix themselves.

Did you know if the government hadn't been in control of student loans then my last 2 years of loans would have been at about 2-3% instead of the 6% mandated by congress? That works out to something like 40% lower monthly payments, IIRC, assuming I make the minimum payment (I won't be doing that, but still).

 

[SagaLore]

Originally posted by: WhipperSnapper
This ruling is consistent with our nation's ridiculous policy of subsidizing, encouraging, and producing huge oversupplies of college graduates, which constitutes a tremendous amount of economic waste.

You're right. All the more why people shouldn't be allowed to have all their debt wiped clean.

 

[AndrewR]

Originally posted by: JD50

Originally posted by: JKing106
Because that would make sense, and it's never, ever the lender's fault. American Greed 101.

Agreed, people should definitely not be responsible for their own actions.

No, it's not that at all. Of course this moron is responsible for his own actions, just as the idiots who took out interest-only jumbo mortgages are to blame for their actions in the housing market.

However, just as in the housing market, the student loan lenders bear some responsibility in the same way that the mortgage lenders bear some responsibility for not doing ANY due diligence on borrowers, because the lenders knew the mortgage would be bundled into a CDO and sold on the market for someone else to worry about. The student loan lenders know that the laws will protect their loans, guaranteeing payback regardless of the situation of the borrower even if the borrower enters bankruptcy. Talk about a lack of incentive to care about the borrower's ability repay the loan!

Since when is it prudent for a lender to give out money without caring about the borrower's ability to repay? Certainly, there must be some guarantee because there is no collateral involved, but at a certain point, there must be a cutoff. If you cannot get loans to cover a top tier school, you simply have to go to a lesser one. Boo hoo for you, life's not fair.

Shame on the borrower to incurring so much debt; shame on the lender for allowing it to reach such a level.

 

[EagleKeeper]

Originally posted by: soccerballtux

Originally posted by: Genx87

Originally posted by: soccerballtux
Usually you can't discharge it, it happens under the "undue hardship" clause. Did he argue for this?

Guys don't forget tuition costs wouldn't be so high if it weren't for government involvement in the first place-- free loans and Pell have done nothing but increase the price.

I think he had a hard time arguing this due to having what appears to be a 70k\year job.

He shouldn't-- that's still undue hardship. To pay that off he'd have to live on $20k for 10 years, maybe more, because of the interest. Good luck trying to run a family....

Get the gov't out of the situation first (student loans) and then things like this will fix themselves.

Did you know if the government hadn't been in control of student loans then my last 2 years of loans would have been at about 2-3% instead of the 6% mandated by congress? That works out to something like 40% lower monthly payments, IIRC, assuming I make the minimum payment (I won't be doing that, but still).

He had the choices over the past 10 years to get himself into that situation.
Not paying anything while he was working.

He is a deadbeat and that should not be an excuse for not paying the loans while he works.

 

[Genx87]

Originally posted by: soccerballtux

Originally posted by: Genx87

Originally posted by: soccerballtux
Usually you can't discharge it, it happens under the "undue hardship" clause. Did he argue for this?

Guys don't forget tuition costs wouldn't be so high if it weren't for government involvement in the first place-- free loans and Pell have done nothing but increase the price.

I think he had a hard time arguing this due to having what appears to be a 70k\year job.

He shouldn't-- that's still undue hardship. To pay that off he'd have to live on $20k for 10 years, maybe more, because of the interest. Good luck trying to run a family....

Get the gov't out of the situation first (student loans) and then things like this will fix themselves.

Did you know if the government hadn't been in control of student loans then my last 2 years of loans would have been at about 2-3% instead of the 6% mandated by congress? That works out to something like 40% lower monthly payments, IIRC, assuming I make the minimum payment (I won't be doing that, but still).

Nobody forced him to run up that much debt for school. The guy is a deadbeat.

 

[CycloWizard]

Originally posted by: WhipperSnapper
I agree with that sentiment, but you also have to ask, why is it the government's job to protect irresponsible lenders from their lending decisions (or do you completely disagree with the policy that allows bankruptcy in general)?

I know several people that have turned their lives around due to bankruptcy. However, I don't think it's the government's job to protect lenders or lendees. Short of physical coercion, both parties freely agreed to the terms of a contract. Therefore, they should be bound by that contract. The idea that someone should run up so much debt that they can't get out of it, then I get stuck with the bill, is wrong on several levels. While I am all for helping people out when they are down, whether or not I do so should be my choice through avenues of private charity - not mandated by the government.

My point is that by not allowing people to file for bankruptcy the government is encouraging irresponsible lending and economic waste in the form of college graduate overproduction. The government also supports overproduction directly.

I agree - the government is the problem here. They subsidize schooling for several classes of citizens, thereby driving up costs for everyone. I disagree that there is an overproduction of college graduates. The trend has been that the college population has tracked the general population in the college age group. Assuming this trend continues, the number of kids in college will decrease soon, resulting in decreased demand and (maybe, dare I hope?) a resulting decrease in tuition. I'm not familiar with exactly how bankruptcy works, but I was under the impression that the state paid the debts owed by the person. Please correct me if I'm wrong. If I'm right, then not allowing bankruptcy means that companies must be more careful in selecting who gets college loans, since only that person will ever pay them back. If bankruptcy was allowed, then they would throw money at everyone who applied because they would get it back no matter what.

Oh, this guy is partially responsible for his situation, but other players are also responsible for having enabled it and encouraged it. Do keep in mind that most people in this country are naive and unaware of the problem of college graduate overproduction. It's difficult to read a newspaper or to listen to the radio or TV without hearing someone blab about how more and better education is the solution to our economic problems and about how it's a guarantor of a middle class standard of living. For example, most people still believe that all lawyers are rich and earn gobs of money when in reality most just scrape by or never find work in their field. Fo example, most people believe that we need more PhD scientists when in fact we are producing a large oversupply and most can't find career positions in their field. This guy was just doing what society and the government have indoctrinated him to do--to pursue education. He probably thought he'd easily be able to pay off his loans.

I am a PhD scientist and I'm hardly having a hard time finding a job. My only problem is choosing between them. I don't know anyone who has graduated in the last five years that hasn't had at least two job offers prior to even graduating. People who really look for jobs often have ten or more job offers before graduating. I don't understand how you can arrive at the conclusion that less education is better for the economy, since innovation is one of the primary drivers of economic growth. While the high school dropout is still an important component of society, an increasing number of jobs require a larger skill set that is gained through education. One thing I will suggest is that we could supply this skill set by tailoring lower education levels to a desired career path (i.e. trade schools, appreticeships, et cetera).

 

[CycloWizard]

Originally posted by: sactoking
Really? Because most of my tenured professors went the route of:

• Get a B.A./B.S.

• Get a job.

• Get work experience.

• Get a professional degree or designation.

• Get a Ph.D.

• Leave the stress of the business world after making millions.

• Get job teaching for $120,000+ with guaranteed tenure.

• Milk state benefits.

In what field? I'll guess that it's business-related.