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The problem is Clinton making student loans undischargeable via bankruptcy. That meant it was risk free for lenders to give student loans. That meant institutio

The problem is Clinton making student loans undischargeable via bankruptcy. That meant it was risk free for lenders to give student loans. That meant institutions could double or triple tuition without any fears because everyone could get an easy loan. The entire system is predatory and cancelling student debt is not the solution because it just means the lenders make all their profits off the backs of taxpayers. The real solution is to make student loans dischargable and for lenders to bear the risk of debt again. Then the markets will return back to normal.

FollowingTheDao 5y ago
Agreed. This is what is called "Socialism for the Rich".
malandrew 5y ago
> undischargeable via bankruptcy What I don't get is why more people trapped by student loans don't just leave the country and set up life elsewhere. Debt is country specific. If you're in debt in country A, you can move to country B and start anew. Undischargeable debt is only an encumbrance on income earned in the country in which you owe the debt.
- doktorhladnjak 5y ago
  First, it’s a lot to ask of someone to leave the country where their friends and family live. Many aren’t interested in doing that. Immigrating elsewhere is also not easy if you’re in a less in demand profession. Of course these are the ones where it’s most likely to have unsupportable amounts of debt. If you’re a US citizen, you are still required to pay taxes on your global income no matter where you live in the world. If you ever get a tax refund, it can be garnished for federal student loans that are in default.
  - inglor_cz 5y ago
    "If you’re a US citizen, you are still required to pay taxes on your global income no matter where you live in the world." The first 108 000 dollars that you make elsewhere are exempt. You can live quite comfortably in most of Europe on 108 000 dollars brutto.
- zozbot234 5y ago
  A vast majority of people are simply not "trapped" to that extent. They're better off staying and paying down their debt with the increased incomes they can earn in the U.S. The unavailability of bankruptcy is only ever an issue for a small fraction of basically non-traditional students, either at for-profit colleges or pursuing some sort of professional education that ends up not recouping the expenses involved.
  - hattmall 5y ago
    A significant, maybe half, Ill have to look of student loan debt is held by people who didn't graduate and thus gained no economical advantage from the debt.
jimbob45 5y ago
I’m seeing 1976 as the date student loans became non-dischargeable [0] via amendments to the Higher Education Act of 1965. I think I know why you’re confused though because the Wikipedia entry on the Higher Education Act doesn’t include a section on the ‘76 amendments and instead skips straight to the ‘92 amendments (which would have been HW, not Clinton). Still, it looks like the parent poster is right that Clinton did make some questionable additions to the Act during his tenure in 1998 [1]. [0] https://www.tateesq.com/learn/student-loan-bankruptcy-law-history#:~:text=Congress%20passed%20the%20Higher%20Education%20Act%20of%201976,Bankruptcy%20Code%20and%20added%20Section%20523%20%28a%29%20%288%29 https://www.tateesq.com/learn/student-loan-bankruptcy-law-hi.... [1] https://en.m.wikipedia.org/wiki/Higher_Education_Act_of_1965 https://en.m.wikipedia.org/wiki/Higher_Education_Act_of_1965
mrep 5y ago
And then the top 20 schools will only end up taking rich kids whose parents can pay/co-sign as I highly doubt they would massively cut costs and perceptibly decrease their rankings to make it cheap enough that lenders would risk giving loans to poor kids.
- mrep 5y ago
  So I calculate da possible total cost that could be done in [0]. University of Chicago has an average cost of tuition after aid at $27,315 and that does not even include housing or food! 1-(15000/(27,315*4)) = a 86% reduction in costs and then you have to use the $665.6 of your weekend target money for food and shelter. They wouldn't even try. [0]: https://news.ycombinator.com/item?id=30403200 https://news.ycombinator.com/item?id=30403200 [1]: https://www.google.com/search?q=average+cost+university+of+chicago&sxsrf=APq-WBvS-wk2QbGDU7V1wsTHV7xeAsVV_g%3A1645332800571&ei=QMkRYs_qHs-sqtsPpKKXkA0&ved=0ahUKEwjPivKovo32AhVPlmoFHSTRBdIQ4dUDCA4&uact=5&oq=average+cost+university+of+chicago&gs_lcp=Cgdnd3Mtd2l6EAMyBggAEBYQHjIGCAAQFhAeMgYIABAWEB4yBQgAEIYDMgUIABCGAzoHCAAQRxCwAzoECCMQJzoKCAAQgAQQhwIQFDoFCAAQgAQ6CAghEBYQHRAeSgQIQRgASgQIRhgAUKQHWMYcYP0gaAJwAHgCgAGwA4gB-RuSAQowLjE1LjIuMS4xmAEAoAEByAEIwAEB&sclient=gws-wiz https://www.google.com/search?q=average+cost+university+of+c...
dragonwriter 5y ago
> The problem is Clinton making student loans undischargeable via bankruptcy. Bill Clinton’s first federal office was the Presidency, and he was sworn in in 1993. The federal law that made student loans non- (well, actually, less) dischargeable was passed in 1976, 17 years before that, while he was running what would become his first successful electoral campaign, for Attorney-General of Arkansas.
- farmerstan 5y ago
  That because you don’t understand the law. What Clinton did was make it practically impossible to discharge the debt. You can still discharge the debt today but it’s incredibly difficult and very rare. What Bill Clinton did was turn it practically impossible which is the problem.
mrep 5y ago
So unsecured personal loans? Those depend on your credit which most students don't have much/any and your debt-to-income which is normally infinite for students because they don't work. You would massively screw over kids whose parents cannot pay/co-sign a normal loan as it would force them to work and study. Also, you normally cannot get very much with such low income and cherry on top, they have awful interest rates which range from about 6% to 36%. The APR on loans for borrowers with excellent credit is around 12%; it's about 29% for bad credit borrowers which students with no credit are likely to be. Edit: If you work at target for 2 8 hour days on the weekend making 15 an hour and with a 36% debt-to-income ratio limit, you could afford a payment of $374.4 a month. $15,000 punched in a 30 year repayment at 29% interest rate equals a $362.57 payment with $0.07 interest. So you might be able to do it but it would hate to be working every single day between weekend work and weekly school.

FollowingTheDao 5y ago

Agreed. This is what is called "Socialism for the Rich".

malandrew 5y ago

> undischargeable via bankruptcy What I don't get is why more people trapped by student loans don't just leave the country and set up life elsewhere. Debt is country specific. If you're in debt in country A, you can move to country B and start anew. Undischargeable debt is only an encumbrance on income earned in the country in which you owe the debt.

doktorhladnjak 5y ago
First, it’s a lot to ask of someone to leave the country where their friends and family live. Many aren’t interested in doing that. Immigrating elsewhere is also not easy if you’re in a less in demand profession. Of course these are the ones where it’s most likely to have unsupportable amounts of debt. If you’re a US citizen, you are still required to pay taxes on your global income no matter where you live in the world. If you ever get a tax refund, it can be garnished for federal student loans that are in default.
- inglor_cz 5y ago
  "If you’re a US citizen, you are still required to pay taxes on your global income no matter where you live in the world." The first 108 000 dollars that you make elsewhere are exempt. You can live quite comfortably in most of Europe on 108 000 dollars brutto.
zozbot234 5y ago
A vast majority of people are simply not "trapped" to that extent. They're better off staying and paying down their debt with the increased incomes they can earn in the U.S. The unavailability of bankruptcy is only ever an issue for a small fraction of basically non-traditional students, either at for-profit colleges or pursuing some sort of professional education that ends up not recouping the expenses involved.
- hattmall 5y ago
  A significant, maybe half, Ill have to look of student loan debt is held by people who didn't graduate and thus gained no economical advantage from the debt.

jimbob45 5y ago

I’m seeing 1976 as the date student loans became non-dischargeable [0] via amendments to the Higher Education Act of 1965. I think I know why you’re confused though because the Wikipedia entry on the Higher Education Act doesn’t include a section on the ‘76 amendments and instead skips straight to the ‘92 amendments (which would have been HW, not Clinton). Still, it looks like the parent poster is right that Clinton did make some questionable additions to the Act during his tenure in 1998 [1]. [0] https://www.tateesq.com/learn/student-loan-bankruptcy-law-history#:~:text=Congress%20passed%20the%20Higher%20Education%20Act%20of%201976,Bankruptcy%20Code%20and%20added%20Section%20523%20%28a%29%20%288%29 https://www.tateesq.com/learn/student-loan-bankruptcy-law-hi.... [1] https://en.m.wikipedia.org/wiki/Higher_Education_Act_of_1965 https://en.m.wikipedia.org/wiki/Higher_Education_Act_of_1965

mrep 5y ago

And then the top 20 schools will only end up taking rich kids whose parents can pay/co-sign as I highly doubt they would massively cut costs and perceptibly decrease their rankings to make it cheap enough that lenders would risk giving loans to poor kids.

mrep 5y ago
So I calculate da possible total cost that could be done in [0]. University of Chicago has an average cost of tuition after aid at $27,315 and that does not even include housing or food! 1-(15000/(27,315*4)) = a 86% reduction in costs and then you have to use the $665.6 of your weekend target money for food and shelter. They wouldn't even try. [0]: https://news.ycombinator.com/item?id=30403200 https://news.ycombinator.com/item?id=30403200 [1]: https://www.google.com/search?q=average+cost+university+of+chicago&sxsrf=APq-WBvS-wk2QbGDU7V1wsTHV7xeAsVV_g%3A1645332800571&ei=QMkRYs_qHs-sqtsPpKKXkA0&ved=0ahUKEwjPivKovo32AhVPlmoFHSTRBdIQ4dUDCA4&uact=5&oq=average+cost+university+of+chicago&gs_lcp=Cgdnd3Mtd2l6EAMyBggAEBYQHjIGCAAQFhAeMgYIABAWEB4yBQgAEIYDMgUIABCGAzoHCAAQRxCwAzoECCMQJzoKCAAQgAQQhwIQFDoFCAAQgAQ6CAghEBYQHRAeSgQIQRgASgQIRhgAUKQHWMYcYP0gaAJwAHgCgAGwA4gB-RuSAQowLjE1LjIuMS4xmAEAoAEByAEIwAEB&sclient=gws-wiz https://www.google.com/search?q=average+cost+university+of+c...

dragonwriter 5y ago

> The problem is Clinton making student loans undischargeable via bankruptcy. Bill Clinton’s first federal office was the Presidency, and he was sworn in in 1993. The federal law that made student loans non- (well, actually, less) dischargeable was passed in 1976, 17 years before that, while he was running what would become his first successful electoral campaign, for Attorney-General of Arkansas.

farmerstan 5y ago
That because you don’t understand the law. What Clinton did was make it practically impossible to discharge the debt. You can still discharge the debt today but it’s incredibly difficult and very rare. What Bill Clinton did was turn it practically impossible which is the problem.

mrep 5y ago

So unsecured personal loans? Those depend on your credit which most students don't have much/any and your debt-to-income which is normally infinite for students because they don't work. You would massively screw over kids whose parents cannot pay/co-sign a normal loan as it would force them to work and study. Also, you normally cannot get very much with such low income and cherry on top, they have awful interest rates which range from about 6% to 36%. The APR on loans for borrowers with excellent credit is around 12%; it's about 29% for bad credit borrowers which students with no credit are likely to be. Edit: If you work at target for 2 8 hour days on the weekend making 15 an hour and with a 36% debt-to-income ratio limit, you could afford a payment of $374.4 a month. $15,000 punched in a 30 year repayment at 29% interest rate equals a $362.57 payment with $0.07 interest. So you might be able to do it but it would hate to be working every single day between weekend work and weekly school.