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I had a self-proclaimed "yellow dog democrat" professor in college that regularly bragged about intentionally wracking up student loan debt and then declaring b

I had a self-proclaimed "yellow dog democrat" professor in college that regularly bragged about intentionally wracking up student loan debt and then declaring bankruptcy to get out of it. He encouraged his students to do the same. There's a good reason student loans are protected from bankruptcy. I know someone who's dad died from a brain aneurysm a bit after she graduated from college. It was a bad situation involving his mental health, and a court-appointed power of attorney stopped making payments to her student loans and didn't say anything. She found out when the loan defaulted. It sucked for her for a while, but she had an engineering degree. Her financial woes acted as a bit of a catalyst for her to actually go out in the world and get a good job, and she dug herself out.

AlexandrB 4y ago
This is pure anecdata. Based on the government's own numbers discharge of loans through bankruptcy was not a big issue when it was outlawed: > The Commission on the Bankruptcy Laws of the United States recommended to Congress that educational debt be exempt from discharge in bankruptcy. The Commission made this recommendation despite evidence showing that less than 1% of federal student loans had been discharged in bankruptcy.[1] Meanwhile, corporate America seems to have no moral qualms about stripping assets from a company, loading it with debt, and then going into chapter 11 to screw the creditors[2]. I don't see why we should hold students to a higher standard than highly paid executives. [1] https://www.tateesq.com/learn/student-loan-bankruptcy-law-history https://www.tateesq.com/learn/student-loan-bankruptcy-law-hi... [2] https://www.retaildive.com/news/the-story-of-toys-r-us-bankruptcy-is-still-unfolding-and-it-still-matters/617429/ https://www.retaildive.com/news/the-story-of-toys-r-us-bankr...
- sgtnoodle 4y ago
  This article from that time period talks about an increase in student loan defaults, with 12-18% of loans not being paid back. That's probably right around when that professor was in college! https://www.nytimes.com/1974/06/04/archives/default-rise-feared-on-students-loans.html https://www.nytimes.com/1974/06/04/archives/default-rise-fea... It also talks about a general trend to federalize student loans. Does it really make sense to compare students taking federally secured loans to corporations taking private investments?
edmcnulty101 4y ago
> intentionally wracking up debt and then declaring bankruptcy to get out of it. American Airlines, GM, Kodak, Texaco, Sbarro, Six Flags, all went bankrupt. Business do this all the time. Donald Trump did this 7 times. Apple almost went bankrupt until MSFT saved it. The federal government literally is in more debt than at anytime in history. Debt funds literally everything in the world. Saying that it's ok for these businesses to go bankrupt, and some even get govt bailout, but not a student, is an hypocritical nutty take.
- sgtnoodle 4y ago
  It seems like you are putting words in my mouth. I think government bailouts are a bad idea. If a private entity invests money into a business and the business fails, that sucks for them but I don't really care. Bankruptcy seems like a necessary legal tool to reconcile otherwise unsolvable accounting. I think the idea of using bankruptcy frivolously is disgusting. It would be great in my opinion for society to hold corrupt business leaders and politicians personally accountable for intentionally making irresponsible choices that externalize the consequences.
  - edmcnulty101 4y ago
    It's arguable that a student who works full time but still can't pay the loan back is not frivolous and deserves to bankrupt out of the loan by the same yardstick you're applying to other situations. Youre bringing the argument down to a tribalistic subjective standard rather than a rational level headed law to be applied across the board. Frivolty is subjective and based on who you determine is frivolous. This is expected based on your original sensational example. You're arguing off of emotion. The only to win this argument for you is to leave rationality on the wayside.
    - sgtnoodle 4y ago
      You're once again putting words in my mouth. It seems like you are looking for an argument, and making assumptions about my opinions. I don't think you are arguing in good faith and you are turning quite rude.

AlexandrB 4y ago

This is pure anecdata. Based on the government's own numbers discharge of loans through bankruptcy was not a big issue when it was outlawed: > The Commission on the Bankruptcy Laws of the United States recommended to Congress that educational debt be exempt from discharge in bankruptcy. The Commission made this recommendation despite evidence showing that less than 1% of federal student loans had been discharged in bankruptcy.[1] Meanwhile, corporate America seems to have no moral qualms about stripping assets from a company, loading it with debt, and then going into chapter 11 to screw the creditors[2]. I don't see why we should hold students to a higher standard than highly paid executives. [1] https://www.tateesq.com/learn/student-loan-bankruptcy-law-history https://www.tateesq.com/learn/student-loan-bankruptcy-law-hi... [2] https://www.retaildive.com/news/the-story-of-toys-r-us-bankruptcy-is-still-unfolding-and-it-still-matters/617429/ https://www.retaildive.com/news/the-story-of-toys-r-us-bankr...

sgtnoodle 4y ago
This article from that time period talks about an increase in student loan defaults, with 12-18% of loans not being paid back. That's probably right around when that professor was in college! https://www.nytimes.com/1974/06/04/archives/default-rise-feared-on-students-loans.html https://www.nytimes.com/1974/06/04/archives/default-rise-fea... It also talks about a general trend to federalize student loans. Does it really make sense to compare students taking federally secured loans to corporations taking private investments?

edmcnulty101 4y ago

> intentionally wracking up debt and then declaring bankruptcy to get out of it. American Airlines, GM, Kodak, Texaco, Sbarro, Six Flags, all went bankrupt. Business do this all the time. Donald Trump did this 7 times. Apple almost went bankrupt until MSFT saved it. The federal government literally is in more debt than at anytime in history. Debt funds literally everything in the world. Saying that it's ok for these businesses to go bankrupt, and some even get govt bailout, but not a student, is an hypocritical nutty take.

sgtnoodle 4y ago
It seems like you are putting words in my mouth. I think government bailouts are a bad idea. If a private entity invests money into a business and the business fails, that sucks for them but I don't really care. Bankruptcy seems like a necessary legal tool to reconcile otherwise unsolvable accounting. I think the idea of using bankruptcy frivolously is disgusting. It would be great in my opinion for society to hold corrupt business leaders and politicians personally accountable for intentionally making irresponsible choices that externalize the consequences.
- edmcnulty101 4y ago
  It's arguable that a student who works full time but still can't pay the loan back is not frivolous and deserves to bankrupt out of the loan by the same yardstick you're applying to other situations. Youre bringing the argument down to a tribalistic subjective standard rather than a rational level headed law to be applied across the board. Frivolty is subjective and based on who you determine is frivolous. This is expected based on your original sensational example. You're arguing off of emotion. The only to win this argument for you is to leave rationality on the wayside.
  - sgtnoodle 4y ago
    You're once again putting words in my mouth. It seems like you are looking for an argument, and making assumptions about my opinions. I don't think you are arguing in good faith and you are turning quite rude.