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View Diary: One of the Most Heartless Articles I’ve Ever Read (14 comments)

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  •  Yes, but the biggest contributor (4+ / 0-)

    has got to be the education finance industry. Both subsidized and non-subsidized loans are available for almost any kind of education, including expensive private trade schools and schools of very poor quality. Young people borrow big bucks to get a shitty education, and then cannot possibly repay their loans. The educational finance industry has many similarities to the residential subprime industry, and just as subprime loans increased the prices of houses, subprime student loans have increased the cost of tuition (because colleges can basically charge whatever amount the students can borrow).

    Don't tell me what I can't do! I'll tread on you if I feel like it...

    by doc2 on Sat Sep 10, 2011 at 05:55:25 PM PDT

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    •  And most education loans are exempt.... (3+ / 0-)
      Recommended by:
      tardis10, OHdog, Inoljt

      ...from being discharged by bankruptcy.

      Student loans were dischargeable in bankruptcy prior to 1976. With the introduction of the US Bankruptcy Code (11 USC 101 et seq) in 1978, the ability to discharge education loans was limited. Subsequent changes in the law have further narrowed the dischargeability of education debt.

      The original logic was sound. Federal education loans are guaranteed by the U.S. government and, therefore, the taxpayers. In return for their guarantee, taxpayers deserve some extra protection against losing their hard-earned dollars. And the same protection is granted to private lenders.

      The current discussion results from bankruptcy reform in 2005. Congress extended government lender protection to the private education loan sources. These lenders are for-profit corporations, earning higher interest rates while offering limited choices for restructuring student loan debt.


      Lobbyists doing what they are paid to do.

      •  That was a terrible bill. (0+ / 0-)

        It was written and passed by lobbyists, and it shows.

        The fact that student debt can't be erased by bankruptcy wholly defeats the purpose of bankruptcy, one of the founding reasons why capitalism can succeed.

        by Inoljt on Sun Sep 11, 2011 at 02:22:57 PM PDT

        [ Parent ]

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