3 ms·

I think you misunderstood. He/she said "default", not "forgive". As in, the people with the loans walk away from them and take the massive credit hit that com

I think you misunderstood. He/she said "default", not "forgive". As in, the people with the loans walk away from them and take the massive credit hit that comes with that, likely by filing for bankruptcy. The issue is that student loans are uniquely sticky, so a person with student loans today basically can't get out of them. If it were possible, many people would choose to file for bankruptcy to release the loans, take the temporary hit, and start again. This would burn the treasury and banks who hold the loans, just like they get burned when they loan mortgage money to people who can't afford one and later default on it.

ajross 9y ago
Bankruptcy is yet another thing though. And I agree, by the way, the laws as written are unfair and don't help anyone. But bankruptcy isn't the ability to "walk away" from a loan. You literally need to be bankrupt: you can't hold any other assets beyond the statutory minums. Most people suffering with student debt aren't literally destitute (obviously some are), they just have a cash flow problem. Bankruptcy won't help them.
- 8note 9y ago
  I doubt that Drumpf was ever destitute when declaring bankruptcy. Students get off easy as far as assets go. they don't have any yet, so there's nothing to get rid of.
  - linkregister 9y ago
    You probably get this a lot, but here is one more data point. Almost nobody who uses the term "Drumpf" is taken seriously. It's the 2017 equivalent of using M$ to refer to Microsoft. It's a way to immediately get your opinion written off.
- mdorazio 9y ago
  I think you might be overestimating the requirements for filing Chapter 7 bankruptcy. In many cases it's a strategic choice much more than a need due to being destitute. Take a look here [1]. In general, if your income is below the state median (which most recent grads' income will be), your debt is more than half your income (easily the case for most recent grads), it would take more than 5 years to pay off (again, easily the case), and your disposable income is low, you can file for Chapter 7. [1] http://bankruptcy.findlaw.com/chapter-7/who-can-file-for-chapter-7-bankruptcy.html http://bankruptcy.findlaw.com/chapter-7/who-can-file-for-cha...

ajross 9y ago

Bankruptcy is yet another thing though. And I agree, by the way, the laws as written are unfair and don't help anyone. But bankruptcy isn't the ability to "walk away" from a loan. You literally need to be bankrupt: you can't hold any other assets beyond the statutory minums. Most people suffering with student debt aren't literally destitute (obviously some are), they just have a cash flow problem. Bankruptcy won't help them.

8note 9y ago
I doubt that Drumpf was ever destitute when declaring bankruptcy. Students get off easy as far as assets go. they don't have any yet, so there's nothing to get rid of.
- linkregister 9y ago
  You probably get this a lot, but here is one more data point. Almost nobody who uses the term "Drumpf" is taken seriously. It's the 2017 equivalent of using M$ to refer to Microsoft. It's a way to immediately get your opinion written off.
mdorazio 9y ago
I think you might be overestimating the requirements for filing Chapter 7 bankruptcy. In many cases it's a strategic choice much more than a need due to being destitute. Take a look here [1]. In general, if your income is below the state median (which most recent grads' income will be), your debt is more than half your income (easily the case for most recent grads), it would take more than 5 years to pay off (again, easily the case), and your disposable income is low, you can file for Chapter 7. [1] http://bankruptcy.findlaw.com/chapter-7/who-can-file-for-chapter-7-bankruptcy.html http://bankruptcy.findlaw.com/chapter-7/who-can-file-for-cha...