patrick.net

Somebody call the waaaambulance!

Comment on story posted by James: "Bankruptcy protection on student loans is tricky. There would be a huge incentive to go to an expensive school (Harvard law degree, anyone?) and then declare bankruptcy the day after graduation. "

That is exactly why students loans were removed from bankruptcy protection. I remember seeing stories in the 70's when the counterculture was in full force of the typical long-haired college graduate with a professional degree and his live-in girlfriend smirking into the camera and saying "Yeah, we graduated then immediately declared bankruptcy, we never intended to pay our debts!" And I'm sure they were thinking "And screw you too!" These were also Baby Boomers.

It would be nice if student loan borrowers were put on parity with house loan borrowers.

Currently, you cannot refinance student loans at market rates. The Dept of Ed is raking in huge profits on many students, who are paying 6.8%. These loans are not costing the Dept of Ed money. They are making money off of them.

Options for loan repayment programs are complex, and if you sign up for a particular program, the gov't makes no guarantee that they will not change the terms at a later date. There are no truth in lending laws. Some private servicers have web sites that are intentionally obtuse. If you call them, you are put on the phone with an Indian who could not get a job answering phones for Dell. Students should pay their loans, but they shouldn't be subject to such crappy treatment.

Also, there is no reason that student loan interest should not be tax deductible. There are deductions for people who plan accordingly. I suggest any student talk to a CPA 3 yrs before heading to college, even if you don't make much income. Otherwise, lube up.

"“My wife and I have over $150,000 in student loans between us, in large part because we have never been able to make regular payments because they would be so large as to prevent us from having a home. "

And you just must buy a home. That is, you must take out additonal debt to tell yourself you have a home.