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> Financial literacy courses should be required That's rich. I suppose the cost of the course will be included in the student loan? Better to do away with the

> Financial literacy courses should be required That's rich. I suppose the cost of the course will be included in the student loan? Better to do away with the cruel 3 prong Brunner test and just make the debts dischargeable in bankruptcy. Two useless financial literacy courses are already prerequisites for predominately-consumer-debt bankruptcy case discharges.

dahdum 7y ago
What stops the student from declaring bankruptcy at age 22 with no assets and a completed education? Their respect for banks? The 7 years of credit score pain?
- AlchemistCamp 7y ago
  The Bush 43 bankruptcy reform act made student loans impossible to escape via bankruptcy. As Peter Thiel said in his recent speech: > "There is the fraud of university education. Student loan debt is not dischargable in bankruptcy. The government can garnish your Social Security payments when you’re 65 to pay off your student loans." source: https://medium.com/@bonniekavoussi/notes-from-peter-thiels-speech-at-the-national-conservatism-conference-on-july-14-2019-6a51b26b202 https://medium.com/@bonniekavoussi/notes-from-peter-thiels-s...
  - howard941 7y ago
    I've counseled many parents who'd guaranteed their kid's loans only to have their own SS garnished when the kid couldn't pay. It's a shitty system.
- howard941 7y ago
  > What stops the student from declaring bankruptcy at age 22 with no assets and a completed education? With only those facts in hand I would tell my client (speaking as a debtor's BR atty in my former life) to expect a fight against a motion to dismiss for filing in bad faith. > The 7 years of credit score pain? Bankruptcy filings are reported for 10 years, discharged or not. Derogatory info related to certain tax debts also bypass the 7 year limit. Other derogatory info should go away [0] after 7 years. The only good news for debtors is the effect ages rapidly in an inverse curvelinear (sp) fashion from what I can gather guessing at the CRA's proprietary scoring algorithms. [0] It never ceased to surprise me how much stale >7 year old debt was still reported and thanks to the wonderful provisions of the FCRA the furnishers and CRAs get a free pass until the consumer takes affirmative, precise, deliberate steps to get it out of the four CRAs' systems
Sohcahtoa82 7y ago
> just make the debts dischargeable in bankruptcy Okay, and then watch the interest rates on student loans double, all the protections like income-based repayment disappear, and stop guaranteeing the availability of student loans to nearly everyone. Also, prepare for extra scrutiny in what the student loan money is spent on. Sure, legally student loans are only to be spent on class-related expenses and living expenses, but I knew someone that spent a bunch of student loan money on a trip to Disneyland. I agree that there's a student loan crisis and that a lot of students were basically swindled into for-profit colleges like ITT Tech, and many people are being told that they can get a degree in anything they want and they'll find a well-paying job with it, but allowing the debt to be discharged in bankruptcy will cause more problems than it fixes. I'd suggest an alternative like capping the amount of total interest that can be put on the loan.
- MR4D 7y ago
  Oddly, having interest rates increase would be a net positive. The whole issue with student loans is that banks have no skin in the game. They literally cannot lose money on a loan, so they will give them to anybody for any amount. The whole problem with student loans is that there is no risk in making a student loan. Solve that issue, and the problem will correct itself. FYIW, the cleanup process is going to be ugly - hangovers always are, and all remedies will suck to some degree or another. [1] [1] - A quick googling led to this article: https://fee.org/articles/how-government-guaranteed-student-loans-killed-the-american-dream-for-millions/ https://fee.org/articles/how-government-guaranteed-student-l...
  - Sohcahtoa82 7y ago
    If banks have to become selective on who they give student loans to, then the lower class, who probably needs them the most to be able to improve themselves, won't be approved.
    - MR4D 7y ago
      If they can give them credit cards and auto loans, then they can also give them school loans. Right now the situation is worse - people are working low wage jobs (such as waiters) after incurring tens of thousands in debt. Wouldn’t being a waiter without the debt be a much better situation? People need to be better with their money. Way too many people in the middle class blow their money on things like fancy cars and then borrow for college degrees that have little value, or can never realistically be paid back. Yes, some people will be hurt, but right now we are screwing up an entire generation, and the data shows it plainly.
poiuyt098 7y ago
Should be required... in highschool junior year, as a prerequisite for college applications.

dahdum 7y ago

What stops the student from declaring bankruptcy at age 22 with no assets and a completed education? Their respect for banks? The 7 years of credit score pain?

AlchemistCamp 7y ago
The Bush 43 bankruptcy reform act made student loans impossible to escape via bankruptcy. As Peter Thiel said in his recent speech: > "There is the fraud of university education. Student loan debt is not dischargable in bankruptcy. The government can garnish your Social Security payments when you’re 65 to pay off your student loans." source: https://medium.com/@bonniekavoussi/notes-from-peter-thiels-speech-at-the-national-conservatism-conference-on-july-14-2019-6a51b26b202 https://medium.com/@bonniekavoussi/notes-from-peter-thiels-s...
- howard941 7y ago
  I've counseled many parents who'd guaranteed their kid's loans only to have their own SS garnished when the kid couldn't pay. It's a shitty system.
howard941 7y ago
> What stops the student from declaring bankruptcy at age 22 with no assets and a completed education? With only those facts in hand I would tell my client (speaking as a debtor's BR atty in my former life) to expect a fight against a motion to dismiss for filing in bad faith. > The 7 years of credit score pain? Bankruptcy filings are reported for 10 years, discharged or not. Derogatory info related to certain tax debts also bypass the 7 year limit. Other derogatory info should go away [0] after 7 years. The only good news for debtors is the effect ages rapidly in an inverse curvelinear (sp) fashion from what I can gather guessing at the CRA's proprietary scoring algorithms. [0] It never ceased to surprise me how much stale >7 year old debt was still reported and thanks to the wonderful provisions of the FCRA the furnishers and CRAs get a free pass until the consumer takes affirmative, precise, deliberate steps to get it out of the four CRAs' systems

Sohcahtoa82 7y ago

> just make the debts dischargeable in bankruptcy Okay, and then watch the interest rates on student loans double, all the protections like income-based repayment disappear, and stop guaranteeing the availability of student loans to nearly everyone. Also, prepare for extra scrutiny in what the student loan money is spent on. Sure, legally student loans are only to be spent on class-related expenses and living expenses, but I knew someone that spent a bunch of student loan money on a trip to Disneyland. I agree that there's a student loan crisis and that a lot of students were basically swindled into for-profit colleges like ITT Tech, and many people are being told that they can get a degree in anything they want and they'll find a well-paying job with it, but allowing the debt to be discharged in bankruptcy will cause more problems than it fixes. I'd suggest an alternative like capping the amount of total interest that can be put on the loan.

MR4D 7y ago
Oddly, having interest rates increase would be a net positive. The whole issue with student loans is that banks have no skin in the game. They literally cannot lose money on a loan, so they will give them to anybody for any amount. The whole problem with student loans is that there is no risk in making a student loan. Solve that issue, and the problem will correct itself. FYIW, the cleanup process is going to be ugly - hangovers always are, and all remedies will suck to some degree or another. [1] [1] - A quick googling led to this article: https://fee.org/articles/how-government-guaranteed-student-loans-killed-the-american-dream-for-millions/ https://fee.org/articles/how-government-guaranteed-student-l...
- Sohcahtoa82 7y ago
  If banks have to become selective on who they give student loans to, then the lower class, who probably needs them the most to be able to improve themselves, won't be approved.
  - MR4D 7y ago
    If they can give them credit cards and auto loans, then they can also give them school loans. Right now the situation is worse - people are working low wage jobs (such as waiters) after incurring tens of thousands in debt. Wouldn’t being a waiter without the debt be a much better situation? People need to be better with their money. Way too many people in the middle class blow their money on things like fancy cars and then borrow for college degrees that have little value, or can never realistically be paid back. Yes, some people will be hurt, but right now we are screwing up an entire generation, and the data shows it plainly.

poiuyt098 7y ago

Should be required... in highschool junior year, as a prerequisite for college applications.