How to rip off student loans

[RgrF]

Bankruptcy does not erase student loans; get with the program kj. BTW it would help if folks like you would stop blaming the victim and go after the real perps.

[rjmacs]

RgrF wrote:
Bankruptcy does not erase student loans; get with the program kj. BTW it would help if folks like you would stop blaming the victim and go after the real perps.

There's enough accountability to go around. Both irresponsible lenders and borrowers can (and should) take their lumps.

[RgrF]

So if irresponsible loan applicants pay the price through the loss of their homes, how do irresponsible loan executives pay anything?

[swampy]

I live in Florida. My plumbing company is open shop.

[kj]

RgrF wrote:
Bankruptcy does not erase student loans;

I thought you and someone else above were saying it should. Even so, if they don't pay, what happens?

RgrF wrote:
BTW it would help if folks like you would stop blaming the victim and go after the real perps.

I think calling them victims might be going a bit far. I've known many people who've gone that route, and despite info that should have dissuaded them from doing it, they did it anyway. They made really bad decisions. I don't think they are any more a victim than someone who majors in "women's studies" or psychology at an expensive university. On the other hand, I still get sick to my stomach thinking about what happened to some of these people and especially their kids (unfortunately their poor decisions were not limited to academic choices).

How do you "get" the schools? If there is a way, someone should. How do you stop the ridiculous loan situation? I suspect it is just your basic gov't idiocy of refusing to make a common sense decision to stop those types of loans. The "who am I to say this type of education is illegitimate" type thinking. Of course, maybe it is more intentional in the sense of campaign contributions, lobbying, etc. I don't know. At any rate, I'm not blaming the people who go to these schools, and I don't think those who run these schools and enable their practices should be let off the hook. But the people who choose these schools essentially bought a Yugo, and that's not my problem, or yours (unless you or I choose to personally help them out). But how can the government and the taxpayer afford to bail out everyone who makes a poor decision? kj.

[rjmacs]

kj wrote:
But the people who choose these schools essentially bought a Yugo, and that's not my problem, or yours (unless you or I choose to personally help them out). But how can the government and the taxpayer afford to bail out everyone who makes a poor decision? kj.

Are you somehow under the impression that federal student loan programs are losing money and costing taxpayers? Because that's just not true. Profits from student loan repayments has generally been used to subsidize Pell grants and Perkins subsidized loans, which provide money for very economically disadvantaged students' tuition. Previously, these profits have also been used to pay private lenders to provide loans, but that was phased out beginning in 2007.

Rest assured, none of your tax dollars are going to pay for students who default on their federal student loans. The system can more than cover its losses with operating revenues. The phrase 'bail out' simply doesn't apply here.

[kj]

No, I didn't know that. But it still seems unwise to make it easier to default on the loans. Especially with the continuing proliferation of these fake schools. And it is still money that could be used more wisely. And couldn't one say that those who pay back their student loans are subsidizing this mess? kj.

[rjmacs]

kj wrote:
No, I didn't know that. But it still seems unwise to make it easier to default on the loans. Especially with the continuing proliferation of these fake schools. And it is still money that could be used more wisely. And couldn't one say that those who pay back their student loans are subsidizing this mess? kj.

Who is making it easier to default on the loans, again? Remember, these loans don't go away even if you file for bankruptcy...

It's always true that the people who pay back loans subsidize those who don't, no matter who the lender is or what sort of loan it is. That's just part of lending money. If you have a better solution to debt non-repayment, you have a future in finance!

[kj]

rjmacs wrote:
[quote=kj]
No, I didn't know that. But it still seems unwise to make it easier to default on the loans. Especially with the continuing proliferation of these fake schools. And it is still money that could be used more wisely. And couldn't one say that those who pay back their student loans are subsidizing this mess? kj.

Who is making it easier to default on the loans, again? Remember, these loans don't go away even if you file for bankruptcy...

It's always true that the people who pay back loans subsidize those who don't, no matter who the lender is or what sort of loan it is. That's just part of lending money. If you have a better solution to debt non-repayment, you have a future in finance!
Like I said, people in previous posts seem to be saying the loans should go away with bankruptcy. I'm not sure they should.

I would have to say I don't know the specifics, but I do know that a lot of these people will never pay their loans back, whether the loan "goes away" or not. The rest of what I said is dependent on the idea that it become easier to default. If it becomes easier, at the very least there will be less money to be used by people for legitimate education. So default is not a victimless outcome. Now, if you could take care of the scam, then forgive the debt, that might be acceptable, but right now it would just help the "schools", and those making the loans. kj.

[rjmacs]

kj,

I agree that lots of student loan money is borrowed foolishly, and the educations obtained aren't always of great quality. I'm not sure how best to approach that problem, and 'vet' the institutions that take the money. They have to be accredited in order to qualify for federal loans, but perhaps there should be other restrictions? Do you have ideas about how we could better ensure that borrowed money goes to better investments?

Edited to move the first part of my post to another thread.