Against all odds....

The Prez, a man for all seasons...doing the most GOOD for the most people....

place in his heart. mahalo n2doc

Failing that, put a cap on the amount of fees and penalties that can be applied over the life of the evil and inescapable loan.

that making student loans dischargeable is a great idea ... it incentivizes loan servicers to work with struggling borrowers ... but President Obama can't do it; Congress must act to amend the BK law.

But a guy can dream, can't he?

I wonder if EW will re-new her attack on BK law? And who will follow her?

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Because Congress is too busy repealing the ACA and trying to declare war on Iran.

Or the cost of going to school...All the rest makes no diference...a new web site will make it easer for them to collect the debt as well.
But I guess that is all he can do.

life of the "loan." Anything else is bondage and should be called something else other than a "loan."

Even 2 or 3% interest would be acceptable. But mine have more than tripled since I graduated.
I can't even imagine the balances due for people who went thru law school or med school.
And every year the interest is capitalized which means I'm paying interest on interest on interest.

My current payments are $500 a month.
I called Great Lakes (the servicer) when I noticed that even after several years worth of payments my balance keeps going UP & they explained that I am being charged $485/mo in INTEREST. So, my $500 payment is only paying $15 on the principal.

I may as well just set that $500 on fire every month, for all the good it's doing me to pay the damn loan.

I can't afford to pay more, I am basically just paying the monthly interest and not much more. I feel hopeless.

Absolutely outrageous.

When you think of all the other things you could do with that money every month and actually have it count towards something ...
medical bills, savings - where it could EARN interest, house payment or SOMETHING ... instead it's just like flushing it down the toilet.

I wish there was a way we could negotiate a 'lump sum payoff' like other creditors sometimes do - my balance is $80k (yah!) ... say they accept $40k in a lump sum & consider it done for good. I'd rob my 401k and sell my car (and a couple organs) to make this damned thing go away.

I only borrowed $50k and now it's about $135k due to compounded interest (had to go into forbearance a number of times because I couldn't afford the minimum and they wouldn't let me pay what was manageable for me). I really f***ing hate those greedy bastards.

Sorry, Obama is doing everything SHORT of abolishing student debts or increasing the pay back period. Right now Student loan repayments is the third largest form of income to the Federal Government (Behind Income taxes and Social Security taxes). Given it is almost IMPOSSIBLE to discharge this debt in Bankruptcy. They are students who will NEVER pay off these debts. They will have to pay them out of their Social Security Checks.

In classic economics, bankruptcy is the driving force. If your costs exceeds the costs of others, you go bankrupt for no one will buy from you. Thus the main Check on people borrowing to much is the ability to pay the debt back. If there exists no ability to pay back the loan, no one will loan out the money. This principal was IGNORED when Loans started to replace grant under Reagan. The justification was education bgs with it increase income and thus the ability to pay back the loan. The problem is what happens if the increase education does NOT increase income? That possibility was ignored and it is the problem facing Students today.

I have clients who are living with their parents, unemployed and getting letters that they are being denied other benefits for they own student loans that they can NOT pay back. This proposal does NOT address such students. Such Student are denied a discharge for it is theoretically possible for them to get a job, even if they NEVER finished their degree and have never worked (Many of these clients fit into the work category of "Last hired, first fired" i.e. they are NOT ideal employees and employers will only hire them if they MUST have an employee and no one else is available, thus the chances of them paying off their student loans are slim to none).

Thus how do you address the problem these student loans are providing these students? The answer is to discharge them, but to do so, how do you discharge a debt for some people but not others? The Answer is what Davy Crockett proposed in the 1820s, debt discharge (Yes, Davy Crockett was popular with people on the frontier, but the history books and Movies ignore WHY he was popular, he advocated Debt Relief).

THe problem with Obama is he is unwilling to go that step, for it means increase willingness to discharge ALL debts, including private debts (and that includes Mortgage debts). No one is advocating discharge of private debts but while the US Constitution forbids such the STATES from "impairing the Obligation of Contracts," no such restriction applies to Congress (Congress CAN abolish debts).

See Article 1, Section 10, restrictions on the states:

http://www.archives.gov/exhibits/charters/constitution_transcript.html

Thus anything to do with Student loans (and any other debt that is the result of Contract, which is ALL debts except for fines leveled by the State and Federal Government) MUST be done by Congress. Congress also has the power to abolish any and all other debts (or what debts Congress wants to be enforced, and what debts can not enforce). The states can NOT even pass a law affecting HOW these students loans are to be paid back, even if the loans were NOT loans from the Federal Government.

Thus in many ways abolishment of Student Loans is NOT even mention as a possibility for if Student Loans can be abolish, it opens the door to other debts being abolished. That is what the banks fear more then abolishment of Student Loans. Congress has the POWER to abolish private debts including any and all loans, be the loans be Student Loans or Mortgages. No one in Congress has spoken of abolishing private debts since Davy Crockett, but the fact he advocated it shows that the idea is NOT new and there is NOTHING in the US Constitution that forbids such an abolishment by Congress.

Most school tuition and fees are tied up in admin cost and sports team funding. The average tuition for a 4-year university is $18,000/year (not counting R&B and meals) and tuition has outpaced COL increases by 6-fold since 1978 (i.e. tuition has increased at six times the rate that the cost of living has increased). We have one of the highest average tuition rates of any OECD nation. Student loans can take 20 or more years to repay...if you pay non-stop. Get a deferment for 6 monthes or a year...once or twice or three times and you are likely looking at life-long debt. Its a debt that can never be discharged in a bankruptcy.
Our higher education system is screwed and I see no relief in sight.

The income based plan is very helpful. I recommend people check it out who are in that position.

I'm on an income based plan. I pay $500/mo but my loan accrues $485/mo in INTEREST ALONE.

So I am only paying $15 on PRINCIPAL per month. And at the end of every year, the interest is capitalized & then there is interest charged on that interest.

When they look at my taxes this year to refigure the Income-Based payment, it's likely to jump to close to $800/mo and my balance due probably still won't budge ... due to interest. I may as well just set that money on fire every month.

The entire system is corrupt and needs reform in order to unshackle students from massive, lifetime debt. Outrageous what this does to the young, their future, the economy and the overall health of our society. Germany recently abolished college tuition because they care about the welfare of their young and their country. Elizabeth Warren tried to pass legislation to lower the interest rate on loans a couple years ago but was defeated. The USA forgave Germany's WWII debt, out of self interest to have a strong buffer to the USSR but it happened. A debt jubilee forgiving all US student debt is the only way to resolve this mess.