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View Diary: Just spent 45 minutes with student debt loan collector UPDATED WITH DOCUMENTS (232 comments)

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  •  Obviously a cap of say 125% of the borrowed (16+ / 0-)

    amount should be placed on balances.

    My bank is paying me less than 1% on much of my money.

    It would take well over 25 years to earn 25% on deposited money with bank CD interest rates well under 1%.

    •  Obviously Washington is f*cking over students. (7+ / 0-)

      That nothing is being done to correct this tells you all you need to know. That under Obama the government has taken in over $55 BILLION in profits from student loans tells you all you need to know.

      This situation is despicable. Anyone who has ever had a student loan needs to write their Senator and Congressman and let them know that unless they sign on and vote for a bill to end these practices they will not get your vote, and ask every family member and friend you have to do the same.

      •  Obama took those loans BACK from the banks (0+ / 0-)

        It was the Bush administration that passed the laws that did this. The $55 billion from the loans taken back from the private lenders who were charging as much as 18% interest on student loans, jacking the rates sky high after having lured students in with low teaser rates - all thanks to laws passed by the Bush admin to give them the ability to make student loans without controls over the interest rates. Banks can no longer offer student loans. The only remaining pathway for them to get their hooks into people is through debt consolidation loans. That needs to be ended as well.

    •  Then nobody would pay back their loans. (6+ / 0-)

      You'd borrow, say, $40,000, and be guaranteed never to owe more than $50,000.  Once you've reached that cap, you'd essentially have an interest free loan for forever.  There's no financial advantage in paying off such a loan, so nobody would make payments.

      •  Of course there's incentive: (5+ / 0-)

        to keep your credit.

        When you make payments and see your balance go down, that is incentive to pay it back.

        When you pay, and pay and pay, and see your balance go up instead of down, it kinda knocks the wind out of your desire to pay it off.

        "Mediocrity cannot know excellence." -- Sherlock Holmes

        by La Gitane on Thu Jan 23, 2014 at 12:28:24 PM PST

        [ Parent ]

        •  Nah (0+ / 0-)

          "free money in my pocket today" > "good credit that I might need tomorrow", for many if not most.  There are far better ways to structure a higher education subsidy.

          •  Have you ever tried to file for bankruptcy? (1+ / 0-)
            Recommended by:
            La Gitane

            It's no cake walk. You are not allowed to keep more than a minimum level of assets. Here in VT, they actually limit the number of chickens you're allowed to keep, the amount of firewood you can have on hand, etc.

            If you think bankruptcy is an easy out for anyone, you're sadly misinformed.

            From the list of what you're allowed to keep in VT if you file bankruptcy:
            Real property or mobile home to $75,000; may also claim rents, issues, profits & out-buildings.

            Various disability & insurance benefits, up to certain limits.

            1 Cow, 2 goats, 10 sheep, 10 chickens; 3 swarms of bees & their honey; feed to last 1 winter; 10 cords of firewood, 5 tons of coal or 500 gallons of oil; 500 gallons of bottled gas; growing crops to $5000; 2 harnesses, 2 halters, 2 chains, plow & ox yoke; yoke of oxen or steers & 2 horses

            Appliances, furnishings, goods, clothing, books, crops, animals, musical instruments to $2,500 total.

            Motor vehicles to $2500

            Think about it - do you know of anyplace in the country where you can get a house for $75k or less? Even a trailer around here goes for $90k or above.

            If you added up all your furniture, clothing, books, crops (it's a farming state) and appliances. Are they worth more than $2500? Which ones will you have to eliminate to get under the limit?

            Have you tried to find a car for under $2500? I have. The word "junker" is the best descriptor. We've had several.

            How long do you think a single 500 gallon tank of oil lasts in a VT winter? (Hint: not a month for most homes.)

            Bankruptcy is painted by the propagandists in the press as some kind of miracle panacea for the wanton spendthrift. What it really is:

            A very difficult choice people make when they are so desperate that giving up just about everything is the best option available to them.

      •  Wouldn't that be wonderful! (0+ / 0-)

        "Then nobody would pay back their loans"

        That would be great if we could get that kind of solidarity.

        What we need is a debtors' strike.  Student loans are the obvious place to start.  Those who borrowed received no hedonistic benefit in return.  (Well, not directly.  I had my share of fun in college.)  In fact, they were doing exactly what society recommended demanded of them, and what most other similary "advanced" societies provide for free.

        As for those who would bitch that "I paid mine; he should have to pay his," my response is that the payers get the benefit of living in a much more human society.

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