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Saturday, October 24, 2015

Bailout For Banksters, Why Not Students?

Everyone who has a student loan knows how unfair it is, and that the loans will follow you and any cosigners to their graves. Student loan debt is almost impossible to get discharged in bankruptcy, defaulted federal loans result in harsh penalties including garnished wages, tax refunds and even garnished social security payments.

Earlier this week, I noted that some small progress has been made in discharging loans in bankruptcy.  There is finally talk about reducing the amount of money that can be reduced from social security. Small steps in the right direction, but it's not enough.

Here is a question everyone who can vote should be asking themselves. Why does my country use taxpayer money to bail out banksters who got into trouble speculating on crap investments, and refuses to help the students who took out loans to get ahead and get a good job?

Here's another troubling issue - many of the students who took out loans were deceived by fraudulent statistics to lure them in, and then screwed over by loan sharks like Sallie Mae. Why is Congress sitting on its fat ass and not helping?

In a nutshell here's why: The banks own Congress, and Congress wants to make them happy. Students don't do anything for Congress. So maybe this next election, we only vote for someone who has a bailout plan in mind for Americans that deserve it, not a bunch of rich bankers who, despite inside information and lots of cash, still managed to not only lose money, but almost brought down the country.



3 comments:

  1. We do get "bailed out." After 25 years it all gets foregiven. It then gets goes to the IRS as taxable income. However, if you have a good accountant, she can make an offer and compromise or get the whole thing wiped away because you are indigent. They are have programs for us shit law solos with 37K Schedule C income. For you youngsters with 100K in undergrad debt, remember the three "D's" 1. Never Default. 2. Deny with Economic Hardships and 3. Delay with forebearances. Its all about Delay and Deny. Call your Servicer like Great Lakes and you can pull it off for 20 years and then go on IBR for the last five years and then it gets foregiven. Student Loans are just as convoluted as our tax code.

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  2. It's a start, I agree, however, the banks didn't have to live with their problem for 25 years. And for some, who are getting more than $200,000 written off after 25 years, having to come pay the tax on that even with a good accountant, isn't easy. Deferments don't get forgiven after 25 years, you have to be on IBR for 25 years to get rid of it.

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  3. I dunno, if you are really broke and un/underemployed then you are judgment proof, and there are really not any wages to garnish or anything like that. So what does it really matter?

    Just don't pay. They'll probably put you on deferment or the IBR payment is going to be $0-25.

    The only reason you should care about your student loans or paying them back is if you make a high income or expect a high income with a good job for the foreseeable future.

    Most don't have that, and that's the problem. Yes the loans, especially for law school, are too high and the interest rate is too high too. We got sold a lemon. But if the economy was really doing well they're not that big of a deal especially anything below around $120k or so, which even for law school is about the average. $35k and under, especially at undergrad 3% interest rates, is even less of an issue.

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