A new study suggests that distressed borrowers using a simpler bankruptcy process are succeeding — and that more people like them should try.
The process which enables this was introduced during the Biden administration.
The process which enables this was introduced during the Biden administration.
The law that prevented being able to discharge student debt by bankruptcy it in the first place was championed by Senator Biden. He doesn’t get credit for a halfassed fix on a problem he created.
Trying to claim credit for halfassed fixes in response to problems he created as a senator pretty much sums up Biden’s entire administration.
Generalize that statement, and you have a pretty decent understanding of US politics overall.
Americans should get free college F these pedofile overlords
they should be allowed to rescind thier graduation application in the in the final year(before the semester end) if they realize they need more time in college. plus alot of colleges devote very little resources for “extracurricular experience” for many fields. like lab work, and research is so important but the seats to labs are so limited and small. and PI are super picky on who they choose. plus theres no informing students that there are labs in universities they are at too.
Well historically it’s nearly impossible to get student loan debt cancelled from bankruptcy. There are literal agreements when you do a federal loan that it can’t be included in bankruptcy filings. It’s in the contract.
However, this article says in extreme cases,such as being very old (50 + ) and having a debt of 100k, that sometimes a court will allow it.
And another person got out of it because the school they attended flopped and they didn’t get their degree.
The 10 year loan forgiveness program was listed. But that’s gone now.
I personally was planning to do it cause , as a grad student, I have 130k in debt. Right now. It will be 260k by the time I pay it off. Assuming I can make 2k a month payments. Im also older. I’m 40.
The 10 year loan forgiveness program was pretty much my only chance at paying it off.
Now that’s gone.
There is no reasonable way I will make enough to pay it off in my life. And a 2k a month loan payment will have me living out of my car.
So I was seriously considering teaching in Canada next fall. (Though I’m new graduate so I’m not that competitive).
Because I cannot afford 2k a month plus my own rent and living expenses. In a city. Cause that’s where colleges and universities are.I’m already in grad student poverty. It’s going to take me a while just to get established and on my feet again.
Being a college professor does not pay like it used to.
I’m expecting around 60-70k a year before taxes. (After taxes that’s about $3500 a month. Minus health insurance)
My area is cognitive neuroscience.
Im hearing stories all the time of professors living in their cars. Living in friends garages. Or parking garages.
The debt burden is insane already. And trump just made it 10x worse.
If I were you I’d just leave the us and never go back
Yeah it’s looking bleak here.
Plus why should I let a county benefit from my hard work that won’t invest in me? A country who is trying to discredit science?
I have better places I could be.
Out of curiosity, how did you end up in this situation? When did you realize it will be impossible for you to pay off this debt?
I have family in US and my niece went to college last year. My sister was suggesting her to study in Poland where we have family so it would be easy for her to relocate, she would have support and the studies are free. She (my niece) obviously decided to study in US and I do understand that it’s nearly impossible for an 18yo to forgo partying with friends and instead spend couple of years studying abroad. Kids are not great at making rational financial decisions. Now she will get degree in journalism or something and end up with $60k in debt. Is this what it looks like for most people? Simply making crucial decision too early in life?
As I mentioned I’m 40. So I started college later.
I actually worked full time and supported myself for my entire undergraduate degree. A 4 year degree that took me 8 because I did it part time.
I went to community college for the associates and state for the b.a. and only took out loans for tuition.
Together those were 13k (a.as) and 35k. (B.a)
I think people don’t realize how expensive college is now days. That’s the cheap option.
Interest occurs during my studies.
Then I got a masters. I studied in Wales because it was half the cost.
I had 12k in savings to help me on my way.
Still had to take out a loan for 46k. That’s literally less than half of what it would cost in the U.S.
Then I got into a doctorate program that was partially funded. Funded for 5 years. But I need 6.5.
Partially due to “it usually takes 6 years” plus covid slowing down my doctorate research which is on humans.
I have had to take out around 30k to finish it. Only big universities in big cities have doctorate programs. Meaning cost of living is very high. My one room (no bed room) studio was $1300 a month. Plus utilities.
Again,interests incurs while I’m school. So I’ve also added around 10k in interests.
I’m trying not to be offended that you assumed I was some party kid fucking around.
I did things the cheapest way possible and I have very little social life.
Tuition is insane here in the u.s. also.
And dorm costs (which luckily I never had) , coat as much as renting an apartment now days.
I didn’t waste money.
Also when you fill out our federal loan papers every time, it forces you to look at your owed amount, expected payments, and interests. It tells it to you right on the website.
Many first gen graduate students are like me. We went the cheap route. But we still had to pay for our own education. And we are all in this debt and even worse. Most i know are closer to $200k right out of school. I worked during my first 2 degrees so I saved a lot.
If you did a 4 year state college with a dorm… Easily 35k a year. X4. That’s 140k just for a bachelor’s degree.
I got mine for 48k for all 8 years.
Higher end university is 50-60k per year for tuition. Plus dorms.For wealthy kids; their parents pay this for them.
For the rest of us, we take out government loans. That have interest.
__
The 10 year loan forgiveness program works this way:
You work for the state or non profit company for 10 years and make payments based on your income.
These jobs typically pay less.
At the end of 10 years if you made all the payments, the rest of the loan is forgiven. Indentured servitude.
But many of us were willing to do it for an education. I was. I still am. If they bring it back.
It is a program to incentivise people with higher education to work for jobs that benefit society the most.
Otherwise no one would take these jobs because they pay significantly less. And we all have insane student loan debt.
what was your field if i may ask. many fields have next to no job prospects despite what people say, also students are never warned about certain degrees have issues after graduation.
PhD in cognitive neuroscience.
It’s a stem degree.
You havnt applied for faculty positions, even to teach? psych. i know FACULTY is nealry impossible to get as they are hyper-competitive, because tenures arnt leaving til they croak/ or cant teach anymore due to physical illness. at least in the biotech area, potential applicants have to have a obscenely large amount of entries in thier cv to get noticed by universities, like dozens of papers(wether they are good quality or just fluff pieces is another matter, and brings a whole new can of worms in the industry)
I’m looking to teach and do research.
Tenure track positions are slim to none now days.
Most universities do something akin to gig work. (Isn’t that some shit? I go to school for 14 years to do gig work!!)
They hire you to teach a class at a semester-to-semester situation.
Those positions suck as there are no full time employee benefits nor security. But they are easier to find and get.
Since I’m a fresh graduate I’m looking at community colleges to start with. Then in 2 years I am hopeful I can find a university position and start research again. But you are right about competition. And at present I have nothing published. I’m hoping to get a published paper from my dissertation work but I feel like that’s 50/50.
Also I feel like I need a break from research and need to build up my syllabus courses and that takes an enormous amount of time. So I’m okay with doing teaching only for 2 years.
My first solo teaching class easily took 30+ hours a week to prepare for. Not counting the 3 hr lecture. And it was my specialty area.
I talked to a few other professors and they said that’s what they remember it being for the first time they taught each of their classes. I wasn’t expecting that.
At present I only have 1 fully prepared course. However I’m qualified to teach probably 6 courses.
So depending on what the college needs, I will almost certainly need to create new courses.
Research methods class is a favorite of mine and it just so happens most professors hate teaching it. So I think I might have a good “in” by emphasizing I’m open to teaching it.
It’s always good to know what you can do that others can’t or don’t want to do.
whose job is it to warn student about their employment prospects?
I’m trying not to be offended that you assumed I was some party kid fucking around.
It’s not what I meant. I meant that when you’re 18 going to the same school as bunch of your friends and living on a nice campus sure looks more fun than going alone to another country and just trying to find your way around there. I meant that when you’re 18 it’s really hard to understand what paying off massive debt is like. In the end most people didn’t had to support themselves at that age so they don’t know how much everything costs, what are the wages and so on. I think that’s why my niece is studying in US even though she had an option to get her degree for free in Europe.
Your situation sounds completely different. You understood your situation, tried to do it the smart but hard way and still ended up in a terrible position. It sounds like higher education in US is simply not worth it anymore and there’s no way around it.
Thanks for sharing. I hope you will find your way out of it somehow.
I was working 2 jobs when I was 18.
I didn’t start college until I found a single job that paid enough to live on. I was 24.
I’ve no doubt a lot of 18-19 year olds do fuck around and waste college money and time.
But I wasn’t one of those.
Here is the thing. When people say. “Don’t go to school if you can’t afford it”.
That’s social mobility.
What exactly was my alternative option?
Stay working shit minimum wage jobs my whole life. Where I’m reminded every day how replaceable I am. ?
No money for healthcare.
Ending up with chronic conditions at 40 from the hard jobs. No way to afford to treat them.
My parents are young. My mom is 16 years older than me and she looks like she’s pushing 80. She’s got a laundry list of health problems and can’t even work anymore. 56 years old. And at the end of her life.
Being poor will lower your lifespan significantly. It will age you prematurely.
Im also an atheist and believe this is the only life I get. And I better do whatever I can to make it at least 70% enjoyable.
It was unacceptable to me to stay at the bottom. Quite honestly, I’d rather not be alive than have that life.
I’ve seen it. I know exactly what it looks like. And I know exactly how it ends. Usually around 55-65. Dying of a preventable disease.
Never retiring. No fruits from a lifetime of hard labor.
As I said the 10 year loan forgiveness program was a way for people to get themselves out of the cycle of poverty. But now, only wealthy kids get to go to graduate school.
And not that many will. Nepo babies usually just get bachelor degrees.
It’s going to take years to re build departments at universities that will start closing in the next year.
People don’t realize how much they depend on higher education in our society.
Medical staff. Lawyers. Engineers. The people inventing things do so at universities.
Even in my field, the research I do helps us understand the human body better and could lead to new interventions to help people have a higher quality of life.
People seem to not realize that all these tech advancements take humans to make them. And companies rarely invest in these. Except in their own properties.
I know so many people who think universities should be defunded of grant money for research.
They literally have no idea where the things they use every day even come from.
My sister moved to US from Poland when she was 18, about 25 years ago. She worked retail, banking and other random jobs. Got her degree online only couple of years ago. She has two kids, her husband died over 10 years ago so she was she was on her own for a long time now. She’s not complaining and is not planning on moving. Being Polish I know many people that moved to US with no education and did rather fine. My aunt and uncle won the green card lottery, moved to New Jersey ~30 years ago. He worked construction, she cleaned houses. They bought a big house, raised two kids. My other uncle worked construction there for 30 years until he retired and moved back to Poland. He was there illegally all this time and he was able to afford healthcare and is still alive while many of his peers in Poland died long time ago (5 uncles and aunts on both sides of my family died before 60). So… is it really as bad as you describe? How is it that immigrants with no degrees can find their way around, live comfortably, raise kids, go on holidays and so on but for Americans it’s all debt and/or suffering? I honestly don’t understand this.
Husband?
So a two income household.
Banking ?
Yeah that’s a corp job.
“Worked construction and did house cleaning and bought a big house”.
That’s not something most people with those two jobs could do. Even in a dual income household.
Unless perhaps you failed to mention he owned a construction business.?
Maybe 30 years ago. Sure. Not now.
I think you are unaware of a few things that have changed.
The cost of education has went up so much in 30 years.
Even my associates degree I paid $13000 for in 2008-2012 is easily now a $25,000 degree. At a community college.
As I said. Going to the next level , a state college, will be at minimum, $30k a year. (60k for associates, $120k for bachelor’s).
Also , if you have kids or disabled, you are eligible for “free” money for college.
I did not qualify for any free money.
30 years ago , heck even 20 years ago, you could buy a house with only 8 or 9k down. And the house payments would be ~700 a month.
That’s not how it is anymore.
Those same Homes are half a million now.
And the down payments needed are 30-50k.
This is why boomers are very much out of touch with the reality of American life now.
It’s not how it was in the 80s, or 90s.
College is so expensive that when you graduate you owe so much, that the interest will rise faster than you can pay it off. Meaning you will just keep owing more money.
Also as far as credentials. Every place that isn’t base like minimum wage jobs , requires a degree of some kind. With the exception of hard manual labor jobs. Like working in factories and warehouses. Hard labor. Hard on your body. And usually men work those jobs because of the physical demands being high. Destroying their bodies by 40.
And also. I never could afford health insurance at any job I ever had until I got a job working for the health insurance company.
There is no way anyone on minimum wage could possibly afford health insurance premiums.
I recall working at Pizza Hut 2006 before I got my corp job. $6 an hour.
After taxes I made about 700 a month.
Insurance premium was $250. For a young healthy 20 year old.
It’s way more than that now. ~$500-700 per month.
And anyway. Doesn’t matter. Couldn’t afford deductable or copays. So pointless to have.
Yeah, it all makes sense. I guess things really went downhill recently. My uncle and aunt didn’t own any business. They simply got a normal, fixed rate mortgage and bought 2 floor house. They lived at one floor and rented the other. That was 25-30 years ago but we’re talking two immigrants with no education. It’s crazy how much worse things are now.
Still, my uncle lived there until 5 years ago when he retired. Worked construction, didn’t die at 40, had enough money to go to doctors, rent apartment and send money back home. I visited him twice for summer and worked with him (illegally, don’t tell anyone). It wasn’t hard work. I was a skinny teenager back then and was able to handle it. Lots of nailing and cutting but not that much carrying heavy things. I mean I wouldn’t trade places with him but again, we’re talking about immigrant with no education beyond primary school, not speaking English and staying in the country illegally. So yeah, I still can’t really wrap my head around just how much worse things have to be now. Or maybe immigrants are just build different? They look for different opportunities, have different support networks, expect different things…
people like you aren’t supposed to exist. you are supposed to die after a lifetime of barely getting by.
that is what the rich want. they dont’ want you to be ‘mobile’. they offends their world order wherein there are the only deserving ones.
that is what the rich want.
Your comments in this thread indicate that it’s what you want as well.
how far gone are you that you think anyone who isn’t in perfect agreement with your politics is the enemy?
you make a lot of bad choices that compound. you choose the school that ‘fits’ you better or seems fancier… but doesn’t offer you any fiancial aid. then you major/train for a job that is a low wage. while you are a student you don’t work… you live beyond your means (study abroad, travel, etc) and pile up more debt. suddenly your tuition and COL is has a few extra 10K extra per year or more in debt.
on lemmy it’s verboten, but a lot of massive debt holders are that way because they just… don’t pay back their debt. they don’t save, they spend spend spend and just further debt burden themselves. they simple don’t pay back their debt and act like it’s a problem for their ‘future self’. they refuse to budget and live within their budget. they repeated defer and pile on more debt and their interest rates go up and up as their credit tanks.
i know several people who took out totally unnecessary student loans… to buy cars, to go on vacations, to afford apartments (won’t get roommates) they could not have otherwise afforded etc.
a lot of people are simply financially irresponsible. but that isn’t a ‘nice’ thing to say. it’s ‘judgemental’. it’s how evil and predatory everyone is… it’s never their fault.
However, this article says in extreme cases,such as being very old (50 + ) and having a debt of 100k, that sometimes a court will allow it.
That’s not what the article says… It says that having payments greater or equal to your income and a long history of high payments may satisfy the “hardship” requirements.
. I quoted at the wrong age for that specific example. That one was 65.
I put “50+” because the other example was for a 47 year old.
The point is that it isn’t their age and the amount in absolute numbers. It’s the amount as a percentage of income and how long they have been struggling to pay off the loan that matters.
Under Brunner, debtors must answer three questions before their debt can be dismissed: Can they currently pay the loans and maintain a minimal standard of living? Is their situation likely to persist for a significant portion of the repayment period? And have they made a good-faith effort to repay the loans?
Under the newer approach, each piece of the test becomes easier to pass if the debtor can check certain boxes. For example, if a debtor’s allowed expenses equal or exceed his or her income, that may satisfy the first question. Being over 65, or having loans in repayment status for at least 10 years, for example, would fulfill the second question.
I didn’t summarize the whole article because that wasn’t relevant to my points.
My points were.
Fasfa contract says it can’t be reduced with bankruptcy but article gave two examples of when it has been.
One due to the institution being shut down. The other from owing a high amount and being older.
Everyone involved was not wealthy. Otherwise they wouldn’t have the debt in the first place. So I didn’t think that was relevant to mention.
I’m not sure that two examples is enough to convince me that this is possible for more people to get this exception made for their student loan debt.
But maybe with the loss of the loan forgiveness program, people can make a stronger case for it.
The other from owing a high amount and being older.
Not being older but having a history of making a good faith effort to repay the loans. So they happen to be older.
Really - it’s all outlined here: https://www.justice.gov/d9/pages/attachments/2022/11/17/student_loan_discharge_guidance_-_fact_sheet_0.pdf
Nowhere does it say “old” or “poor” though those conditions may coincide with other criteria.
Both of the people were older.
My impression was that they couldn’t pay off that much debt at that age.
A nation that sells knowledge to its people is beyond me. Aren’t they milked enough when they finally are allowed to slave themselves to death in work?
This nation is a great example to others how it should not be done. But yet we all will follow slowly…
And yet, poor people still multiply and forward their suffering. Willingly, as planned well by their owners.
Remember, it’s always been predicated on the idea that success proves worth regardless of circumstances, especially for American conservatives. It’s a myth built to serve those with power and privilege, a shield that protects their ego and image, and a gag for any talk of social or economic equality.
Our founders paid lip service to egalitarianism and ridding ourselves of kings, then created a system that allowed for the rise of a new sort of royalty. Instead of titles and land, it’s wealth that creates power and is inherited by children.
Universities don’t just sell knowledge, they sell opportunity and status, and the bar has to be high enough to ensure that only people the powers that be find deserving can climb over it.
The worth-success correlation is not just the USA, it’s here (Germany) the same. And probably nearly everywhere else too.
As for the rest I can’t add anything, you already summed it up quite eloquently with enough cynical observation.
I hope for you that you’re a wealthy one, as being poor AND open-minded in the US must be a nightmare. Knowing when and how you get fucked into which parts hurts more than just rolling along the others, never having to reflect or ponder…
I mean, if it’s going to take you over 7 years to pay it off anyway, then why not?
7 years is nothing. most car loans are 7 years at this point. and a 7 year loan on a car that will last you 15-20 years isn’t a big deal.
It’s possible to discharge student loans through bankruptcy or is this one of those shitty versions of bankruptcy where they just consolidate your debt and interest payments into something more manageable?
Based on the comments so far, I am confident that I am the only commenter that read the article.
This is normal; only about 1 in 4 people who comment or vote on an article bother to do so much as click the link.
Gotta get rid of that pesky loophole!
I shedded my debt by paying it back. all 30K of it.
what a weird concept that is…
I too have managed to be lucky enough to not suffer much hardship despite there being several recessions and a fucking pandemic since I graduated college, but that doesn’t mean I’m going to be an empathy-lacking prick about it.
not paying back your debt so you can ‘live it up’ isn’t lacking empathy.
most debt holders aren’t unfortunately victims of circumstance… they are people who took on debts and refuse to pay them back.
30K and you didn’t learn conjugation?
Step 1: take out a loan for something that improves who you are, with no added goods.
Step 2: declare bankruptcy, selling off your nonexistent assets while keeping your diplomas.
Step 3: get meaningful work while carrying no debt, meaning you can take the work you want instead of the work that pays the loans.
Step 4: profit!
Why is this downvoted so hard? I’m confused.
because it’s suppose to be funny but it comes across as stupid and tone deaf.
Hm. I guess one could look at it that way especially if actively being fucked by the situation.
Because you can’t do that, even under the new rules; it takes making a good-faith effort to pay off the loans and having undue hardship as a result of them. That’s not a typical situation for new grads.
I guess everyone missed my point then.
Undue hardship IS common for new grads nowadays. Although I guess as it becomes normal, it won’t be considered undue hardship anymore.
The courts definition of undue hardship means not being able to attain a minimal standard of living and not having any real chance of it changing. For new grads in good health, the expectation is that it will change in the near future.
There as also a implication it was going on for a while, 10 years in the article.
New grads may feel it’s helpless and whole be for 10 years but courts do not operate on feelings, they need evidence.
The point of the article is there is more hope now than there was and to spread awareness because most people aren’t including this in their bankruptcy.
