Life led Elizabeth Hadzic and Kim Coles to bankruptcy court.
Hadzic, 50, a psychotherapist in Maryland, doesn’t make enough to support herself and her adult son, whose health struggles set her back thousands of dollars. Coles, an accountant in Oregon in her late 60s, was laid off last year.
Both have tens of thousands of dollars in student loan debt. Although they have been making payments on those loans for years, they no longer can. And both, in the absence of an alternative, have resorted to taking the costly, typically unsuccessful route of trying to get their loans discharged in bankruptcy court.
That’s where things diverge.
For Hadzic, bankruptcy is proving to be the answer to her financial woes. After months of litigation, she’s on track for a full discharge. In Coles’ case, the government is putting up a fight − though she is of retirement age − against discharging the balance of a loan she’s been paying down for more than a decade.
“I always paid my student loans,” Coles said in an interview. “I was never late.”
The disparity in how the government is treating their cases is indicative of the intractability of one of the country’s most extreme and inaccessible forms of student debt relief, as the Biden administration grapples with finding alternatives to the kind of sweeping student loan forgiveness option that the Supreme Court struck down in June.
When my wife and I went through bankruptcy we didn’t get any student debt relief. And now the want to give people student debt relief!? That’s awesome, we should be trying to help people out of debt any way we can.
Had me in the first half
I don’t understand why the government can’t at least offer everyone the opportunity to refinance at zero interest so they can get those private debts paid off.
Especially for government owned loans. It’s always been bizarre to me that I pay interest on my federal student loans. My education makes me a huge contributor to the economy already, why do I need to pay back 2-3x my tuition over the term of my loans too?
Because they’re considered safe loans because they are very hard to discharge. So your student loans are funding your parent’s pension funds and 401k’s
Isn’t it that the companies overseeing those pension funds and 401ks have given out that money as risky loans because they had the promise of being able to create a generation of debtors by going into schools and targeting children for predatory interest rates?
I am on board with cancelling some student debt for those who are struggling, but I wonder if this is a good long term solution. How do we stop getting overburdened graduates into the debt machine at 22? Do we lower tuition costs, make college free, talk kids out of going, giving more government grants to low income students?
If the taxpayers are going to socialize anything I’d prefer to start with healthcare. That impacts everyone.
You can socialize more than one thing at a time. Student loan debt affects everyone too. We have an entire generation right now who can’t afford to buy a house, and who are putting off marriage and having kids. That effects the entire economy. Not to mention they can’t save for retirement if a good chunk of their income is going into student loan debt.
A few counters to this:
Given that public opinion weighs so heavily on the ability to get anything done, healthcare, to me, seems like an easier win. Focus on one thing, get it done right, make people happy, get elected to a second term.
Student loans do not affect everyone. College attendance is declining and nobody ever dies from not having a bachelor’s.
Home prices and interest rates are out of control, but neither has anything to do with student loans. Home prices have risen at way beyond inflationary rates to beyond what is affordable even for those without debt. Other factors are at play here.
Stopping the student loan program would be a good start. It would cause some people to not be able to go to college, but it would likely save far more from a debt trap. Stopping loans would also apply a huge downward force on tuition, which may actually help more people afford to go to college in the first place.
Maybe after a few years of no loans, a grant system could be created. It would pay participating universities directly, if they agreed to some level of affordable tuition. You could tie additional grant money to performance objectives that are harder to game like graduation rates, job placement, average salary of recent graduates, and performance of the bottom quintile.
Interesting to think about. I wonder how much schools would need to scale back to make a noticable difference in tuition and what jobs would be cut in the process. At a time when private colleges are already struggling, it might be difficult to find the fat to trim.
Admin jobs would be cut. The vast majority of tuition increases have not gone to the faculty, who teach the classes.
I assume the schools would just partner with a bank and offer their own loans at that point. Similar to those store credit card scams
There’s tons of administrative fat. Also admission staff could be cut because of reduced enrollment. Financial aid departments would lose 90% of their options, so could be reduced.
Healthcare is a good start, but education is the biggest investment we can possibly make. Why not both, though? The money exists.
Well, sure, the money exists, but it’s not for those people
Pre George W. Bush, it was perfectly legal to discharge student debt in bankruptcy. That made loans harder to get, and consequently, kept college prices from these insane increases.
Does anyone know how they plotted that “Student loan debt” graph? Looks nice.
I believe this is a strategy to encourage young student voters to vote for Biden.
Making the country better is often a good reelection strategy
Ironic since Biden is the reason you can’t discharge your debt in bankruptcy now.
LOL, the irony. Biden is a HUGE part of why student debt can’t be discharged. OH, how he happily wants to forget about his past in Congress.
Biden co-sponsored bankruptcy exemptions under Regan and more. HE was PIVOTAL in fucking over students. The guy is a severe piece of shit. And we won’t talk about his anti-choic activities and associates in the past.
The difference between the parties explicitly in economic terms is zero. There are two capitalist parties who are lock in step with their billionaire donors.
People can change, my man. Forty years is a long time.
When people change magically at the same time their approval has cratered, on one of the issues wrecking his approval (again, that he helped architect but doesn’t own up to as a mistake), then it’s important to be suspicious or get duped.
Well, be fair. This wasn’t how he wanted to deal with student loan debt relief. But Republicans sued the federal government, and the stacked courts served their masters well by preventing the loans from just being discharged outright. Now we have yo try and find all these bullshit, overly complex, and deficient mechanisms to try and help people. We do still want our presidents to follow the law,
even ifespecially when they don’t want to.“magically”
I find it hard to decry someone trying to correct his past mistakes. There are too many people on the hill willing to endlessly hard-line their past stances in spite of them being proven wrong or ineffective. I’d rather criticize them or Biden for his current on going mistakes than for things he’s turned the corner on.
If he was doing that saying “I fucked students over for rich assholes. I regret it. I want to change it.”
Sure.
But he’s pretending he had nothing to do with it. And counting on people too young to know he’s an architect of fucking students financially.
That’s something totally different than correcting his past mistakes. Especially since he’s in dire political trouble, and this is a pandering move.
Okay, so what would you rather happen instead? Biden… not look for ways to relive student debt? Hope to vote for a 3rd party candidate that won’t get elected? Or you could vote for Trump or another Republican, who want to charge back interest for the student debt pause during the pandemic?
I’m just trying to figure out where you’re going and what you’re trying to accomplish with your rage.
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Man, let people grow. If you keep holding everyone to what they did so many years ago, they got no reason to do better now.
If the dude wants to overwrite things from the past, using his powers of the present, I say good.
Actions are worth more than words though, so time to start making changes
Biden definitely doesn’t want people juding him on actions.
From day one he could have done all the student debt relief via executive order. Yes it was debateable among scholars, but plenty of laywers and academics believed it consitutional.
Worst case scenario it would have spent ages in the courts, meanwhile the reprecussions from countering the executive order would have snowballed to where it would have been nearly impossible to unwind it.
Trump and Bush have showed the Dems the new norm over and over. You do what you want, worst case it spends years in court while staying in effect, THEN if you lose in court, you do the same thing but so slightly differently that the effect is the same and you start another cycle of years and years of living with it.
This was an easy and clear strategy to deal with the student loan crisis. But again, as an architect of preventing students from discharging loan debt via bankruptcy—his actions speak loud and clear (just like you said).
And I’m fine if people learn from their mistakes. But when they seek to rewrite or burry history that’s not learning from their mistakes. Nor is catastrophcially crashing in the polls and needing the younger voters so suddenly this is a priority.
one of these women is in her ‘late 60s’ and only been paying student loans for ‘more than a decade’–they would have phrased that differently had they been paying for more than 20 years.
so she went back to school on loans at what? aged 50? 55? older? why??
Am I not allowed to go to uni because I got a job? The fuck?
I got my first degree in my twenties, then got hurt and was unable to continue that career, so I went back to school in my late forties to get into another career I can actually perform.
We’re old and we exist.
How dare she want to continue her education!!
Don’t borrow what you can’t afford to repay. Easy. Not everyone was stupid enough to get indebted up to their eyeballs, and many weren’t “fortunate” enough to even try.
Student debt is sold based on a lie about earnings potential for graduates. Debtors are told that they’ll be making X amount of money and will be able to pay off their debt in Y number of years. Then they graduate and find out it was all a lie.
Not at all. All the data is perfectly clear. Some professions make more money than others. Some of those professions require degrees. There are numerous professions that require degrees that do not pay much more money. The lists of the current professional average salaries per geographic area have been published for decades.
If you are too stupid to read a list and see that a $200k education for a $40k/yr job is a poor life choice, why is everyone else subsidizing you?
A $200k education for a $200k/yr job is currently worth it if that’s what you want to do. It is not a lie. You just have to do literally 10 minutes of work before you decide your entire life’s trajectory. I guarantee these same idiots did more than 10 minutes of “research” to decide what colour $1.5k iPhone they’re going to buy.
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Why the fuck do you want others to suffer like you did though? You gained zero benefits from your suffering, it just put you in a worse position in your life than if you hadn’t suffered.
The cost to you for this change will be miniscule.
Aside from the whole higher education system being built on this loan system
You didn’t even read that both people are in situations they never could’ve predicted happening back when they took those loans, one of which was laid off from the job meant to pay for that loan…
Bad things happen to people all the time. The only time their debt is cancelled is when they die. If I lose my job, is all my debt cancelled? No. If I lose my job do I get to not pay my debts? No.
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Bad things happen to people all the time. The only time their debt is cancelled is when they die. If I lose my job, is all my debt cancelled? No. If I lose my job do I get to not pay my debts? No.
There’s this thing called bankruptcy, people do it all the time.
student load debt cannot be discharged through bankruptcy
And it is abused all the time making everyone else’s life more expensive for not being a gigantic fucking idiot with money.
Got a source on that claim?
Feelings
Apparently, which his must be getting very hurt for how hard he’s lashing out.
*crickets chirping*
While that is true on the surface, system in USA is so predatory when it comes to finances. You literally can’t afford any mistakes of any kind or you are going under.
Don’t loan what they can’t afford to repay. Easy. Not everyone was stupid enough to offer debt up to people’s eyeballs, and many weren’t “fortunate” enough to even try.
Stupid games cause stupid prizes, for everyone involved. Bankruptcy exists for a reason and it was foolish to ever allow any debt to bypass it. Humans always have and always will act in their immediate best interests with a hopeful view of the future, and the best way to accommodate normal behaviour is to balance discouraging it (by encouraging the specialists in debt to refuse bad debt by punishing them with unrepaid loans) and ensuring the people caught in the system can still be functional in society since that is better for them, society, and everyone except the idiots who loaned them money they were never paying back.
If someone is deemed by society too stupid to make life choices we assign them a care giver and they become a ward. If your excuse to taking out mountains of debt is no reason and want to get it all expunged with no penalty, then you should be divested of your finances and have someone appointed to take care of all your financial choices.
Otherwise some societies have debtor prisons where you exchange time of your life for the value you stole from others. The US only has debtors prison for federal taxes even though they don’t call it that anymore.
Bankruptcy not allowing certain types of debt is very stupid and obviously because of lobbies. Bankruptcy should be eliminated. The very few people that use it individually are nothing compared to the corporations that use it to hide billions of dollars. Go “bankrupt”. Stores stay open. Management continues getting paid. Employees lose their pension and stock benefits. All the creditors like the small supplier shops get no money for the items they sold to the store. Store can continue to sell items and never pay for them at ridiculous prices because the cost is zero.
Trying to control the lives of millions of people because they were too stupid with their finances is a very inefficient solution to the problem (also unpalatable). I think the far simpler option is to simply stop protecting anyone giving bad debt. The government has less work to do, people learn to be smart in what debt they offer, because if they start offering people the moon for punishing but distant costs, they’ll get nothing.
Your solution relies on every human being smart. Mine doesn’t care how smart people are, it ensures the problem is self correcting. Much neater, much less societal harm. Who actually cares about “punishing stupid debtors” when you can instead just not have any stupid debtors.
Just to add, I think the reason bankruptcy needs to exist is to ensure there is no burden on the government enforcing inefficient debt collection. It’s not about fairness or second chances, those are just happy side effects. But if someone’s business model relies on government enforced punishment to function it’s a wasteful model from the governments perspective. Allowing people to go bankrupt means nobody will benefit from this model of debt collection, and thus saves the courts and government to focus on more beneficial contract law involving large amounts of wealth, rather than millions of pittances that cost the government more than they earn the loan sharks.
Pretty sure scratchee and TechNerdWizard42 are the same person.
I assure you we’re not, and we seem to disagree pretty fundamentally, possibly you’re confused by the fact I replied to my own comment, but I assure you that was just because I was a bit drunk and couldn’t find the edit button
There was a bit where you both seemed to have pasted identical responses. The other comment seems to have been deleted.
