SCOTUS rules against Biden student loan handout

[mike]

https://www.foxbusiness.com/politics/su ... bt-handout

Republicans argued Biden lacked the authority to unilaterally forgive student loans. Estimates from the Congressional Budget Office said Biden's plan would cost taxpayers roughly $400 billion. Republicans were outraged at the total, arguing the forgiveness would be unfair to those who either paid their way through college, repaid their loans, or never attended college in the first place.

[Josh]

Of course, the Biden admin is already sidestepping this, such as allowing people to self-declare income with no documentation required which reduces their payments to $0 (and also removes any negative info on a credit report including missed payments before Covid started).

[mike]

Of course, the Biden admin is already sidestepping this, such as allowing people to self-declare income with no documentation required which reduces their payments to $0 (and also removes any negative info on a credit report including missed payments before Covid started).

Unsurprising. I think an administration can figure out a way to spend money if it wants to. The thing about self-declaring income is common in all kinds of governmental aid. My local food pantry is actually forbidden by law to verify income statements from people applying for aid.

[Josh]

Of course, the Biden admin is already sidestepping this, such as allowing people to self-declare income with no documentation required which reduces their payments to $0 (and also removes any negative info on a credit report including missed payments before Covid started).

Unsurprising. I think an administration can figure out a way to spend money if it wants to. The thing about self-declaring income is common in all kinds of governmental aid. My local food pantry is actually forbidden by law to verify income statements from people applying for aid.

This was a new change put in recently; asking for percentage of income based repayment of students loans used to require proof of income (tax return or pay stub).

[mike]

Former NYS senator who apparently bought a 1.1 million dollar home last year complains about still owing $206K in student loans.

[Josh]

Regular, hard-working Americans have to pay off not just interest, but principal as well on their loans. Fordham grads (Fordham is basically an extended summer camp for NY elites), on the other hand, don't even bother paying their interest.

Her payment would have been $1363 for principal which is less than what many hard-working Americans are paying for their mortgage and their car (particularly after the rise in home prices thanks to covid and government policies with insane inflation). I am simply unsympathetic. Lawyers in particular can make a lot of money, too.

[Ken]

I would actually favor more loan forgiveness programs for social service jobs in high-need areas such that you get x-% of your loan paid off for every year you work. That is how it works in Chile. Med school was free for my wife but then she owed the government 3-years of service working in public health in a remote rural town in southern Chile. If you blow it off they then send you a bill for all 6 years of med school and you are on the hook to the government for that amount.

I paid off my student loans after graduating from college by going up to Alaska and working on fishing boats for a year. But that was a different time when college cost far less.

I don't have a lot of sympathy for people who run up enormous loan balances by going to expensive private colleges rather than public universities that cost 4-x less. Fordham is a Catholic school so I doubt its law school is very cheap compared to say one of the CUNY schools.

What usually happens in these cases is that the person in question applies to a dozen or more selective schools and then attends the highest rated one they get into regardless of the cost. Just because you get into some expensive private school doesn't mean you can afford it.

[Josh]

I would actually favor more loan forgiveness programs for social service jobs in high-need areas such that you get x-% of your loan paid off for every year you work.

Already exists. Work for a nonprofit for 10 years, and poof, student loans all gone. There are other programs like that as well.

I don't have a lot of sympathy for people who run up enormous loan balances by going to expensive private colleges rather than public universities that cost 4-x less. Fordham is a Catholic school so I doubt its law school is very cheap compared to say one of the CUNY schools.

Fordham is a playground for rich people. I understand people who think they need to attend a T14 law school so they can get a high paying job, but such people should not be sobbing about their student loans. Go get a biglaw job where starting salaries are $210k.

[temporal1]

(i believe) biden+posse were fully aware* of how SCOTUS would rule, and would have to rule.

(i believe) this was a threefold cruel ploy to:
1) scoop up votes (from those with ample education to prevent them from being scammed like this),
2) stir the pot, create a riot, encourage mob rule, create a sensation,
3) further undermine the stature of SCOTUS.

Student debt is an important topic that’s been discussed on MN:

2021 / Finance. Wait. Whose paying for that? ..
viewtopic.php?t=3933

2019 / Debt forgiveness
viewtopic.php?t=2541

2022 Quite surprising: Changes are in progress

How to File for Student Loan Bankruptcy
https://www.investopedia.com/how-to-fil ... cy-4772237

What Is Student Loan Bankruptcy?
You may have heard that student loans cannot be discharged in bankruptcy.
That statement oversimplifies the truth.

You actually can get student loans discharged in some cases, but the bar is higher, and the process is more burdensome than it is for other types of debt.

Filing for bankruptcy to discharge student loans may get easier, though, if a recently introduced bipartisan bill is passed.
The Fresh Start Through Bankruptcy Act of 2021, by Senators Dick Durbin (D.-Ill.) and John Cornyn (R-Texas),
would restore the ability of borrowers with federal student loans to seek a bankruptcy discharge for their loans 10 years after the first loan payment comes due.

It would also make it possible to retain the existing undue hardship discharge option for private student loans and for federal student loans that have been due for fewer than 10 years. .. ..

NOT A SLAM-DUNK.
These may be steps forward to pressure ACCOUNTABILITY from BOTH lenders AND student borrowers.
(i really dislike Durbin-IL, i know nothing of Cornyn-TX) but, i’ve questioned for years the lack of wisdom in guaranteed loans, basically, with no way out. To repeat, not ok for lenders or students!

The thing with bankruptcy is, it’s RELIEF, with PENALTY. It’s a trade-off. Thus, less likely to be abused.
There are a few types of bankruptcy, with different purposes/rules. Some wealthy people use bankruptcies as part of their business plans! i know little of these. Ordinarily, it’s a painful choice, a last resort. Which is ok.

My husband died in May 2007, the world wide bank failures were evident by the end of 2007. The following years were pretty awful for me, i was on the brink of bankruptcy for .. ?? maybe 2+ years. i was in close contact with a local experienced bankruptcy attorney, i had the paperwork at my fingertips .. i was so close. i kept fighting it. My house finally sold. i managed to squeak by. i lost a lot, but i got out of it without filing.

i learned a lot in the process. bankruptcy is more complicated than one might guess. it’s a process, and it varies by state.
it allows a new start, but it’s not without penalty. (this prevents abuse.)

thus, my opinion is, the problems of guaranteed student loans might be greatly reduced by allowng them to be discharged in bankruptcy - IF ALL ELSE FAILS. it’s not penalty-free for lenders or student borrowers. example: personal credit is damaged for 10 years! that’s a penalty. it’s not prison or death. it’s a penalty.

i don’t confuse government policies with Jesus’ model of personal mercy, grace, forgiveness, which are important tenets of faith.
i have forgiven debts, and i sometimes have been forgiven - not by government!

i’m interested in where these new policies may lead. not all student loans should be discharged in bankruptcy!
some should. if not, if there is no way out, it’s tantamount to indentured servants. imho

If bankruptcies were allowed for student loans:
1) Banks would not lend to those unlikely to repay,
2) this would PREVENT egregious debt errors, poor judgment, eliminating need for debt forgiveness.

S.2598 - FRESH START Through Bankruptcy Act
117th Congress (2021-2022)
https://www.congress.gov/bill/117th-con ... rent%20law.

*2022 / Biden made it harder for student-loan borrowers to get rid of debt when they go bankrupt
https://www.businessinsider.com/biden-m ... tcy-2022-5

Guaranteed student loans have been (guaranteed profitable) to banks and universities.
That’s why there’s been no accountability regarding education, employment, degree choice, or debt in relation to probable income.

Only government could or would engage in some cockamamie scheme like that.

[Josh]

In my opinion bankruptcy on student loans should be allowed - with the amount spent on tuition getting charged back to the university that granted the degree. This would motivate universities to make sure students are earning enough in their jobs to pay their loans back. Or else the university will be on the hook for it.

Universities are regularly charging $40k, $60k a year and have zero accountability for graduating students who end up struggling to find a job as a barista whilst they grapple with trying to repay $100k+ of debt.