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Student loans were exempted from bankruptcy, allowing banks to make riskier loans (more students, higher amounts). Colleges soon followed with increased tuition
by samtp 13y ago
Student loans were exempted from bankruptcy, allowing banks to make riskier loans (more students, higher amounts). Colleges soon followed with increased tuition to match student's new ability to pay.
- dnautics 13y agoI am pretty sure that is a large part of why this is happening, but when was that signed into legislation?
- nether 13y agoIt's gotten progressively tougher since the '70s, starting with med/law school debt. > Before the mid-1970s, debtors were able to get rid of student loans in bankruptcy court just as they could credit card debt or auto loans. But after scattered reports of new doctors and lawyers filing for bankruptcy and wiping away their student debt, resentful members of Congress changed the law in 1976. > In an effort to protect the taxpayer money that is on the line every time a student or parent signs for a new federal loan, Congress toughened the law again in 1990 and again in 1998. In 2005, for-profit companies that lend money to students persuaded Congress to extend the same rules to their private loans. http://www.nytimes.com/2012/09/01/business/shedding-student-loans-in-bankruptcy-is-an-uphill-battle.html?pagewanted=all&_r=0 http://www.nytimes.com/2012/09/01/business/shedding-student-...
- dnautics 13y agothis doesn't match up with the hypothesis then.
- sliverstorm 13y agoWhat, because "Mid-70's" isn't the same as "1981"? It sometimes takes a little while for the ripples to be felt.
- dnautics 13y agobecause, MD and JD debt wouldn't apply to undergrads, unless you think the wave can travel back in time?