Help! Defaulted Student Loans (and other debt fun)

[China]

Education Department Forgives $415 Million in Student Debt for Borrowers Who Attended For-Profit Schools

 

The U.S. Department of Education has announced it will cancel the student loans of nearly 16,000 borrowers who attended certain for-profit schools, including DeVry University. The relief comes out to $415 million in total.

 

"The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards," said Education Secretary Miguel Cardona, in a statement Wednesday.

 

"Students count on their colleges to be truthful," Cardona added. "Unfortunately, today's findings show too many instances in which students were misled into loans at institutions or programs that could not deliver what they'd promised."

 

Click on the link for the full article

[China]

Your Credit Score Can Predict When You'll Die, Research Shows

 

Need another reason to obsess over your credit score? Here’s a new (if macabre) one: According to a team of economists, that three-digit number isn’t just a good indicator of how stable you are as a borrower — it can also predict how long you’ll live.

 

Researchers from the University of California Irvine and the University of Geneva recently analyzed Experian credit data from 2004 to 2016 for more than 2 million randomly-selected people. If an individual died during that period, their death was recorded by Experian, allowing the researchers to create a computer algorithm sussing out whether elements of their credit report — like a sudden, significant change in credit score — is linked to mortality. According to the researchers' findings, published in a December 2021 paper, it absolutely was.

 

“People behave in the credit market in different ways according to specific underlying characteristics,” says Giacomo De Giorgi, a professor at the Geneva School of Economics and Management and one of the study’s authors. “In this case, the risk of death is one of those.”

 

How credit scores are linked to death
The connection between mortality and credit scores manifests in two major ways, according to the researchers.

 

The first is in how people spend money throughout their lives — especially at the end of it. Someone who just received a cancer diagnosis, for one, will probably spend in markedly different ways than he did just a few months prior. He might rack up medical debt or, if the diagnosis is terminal, max out his credit cards on Mediterranean cruises, BASE-jumping equipment or some other high-dollar, once-in-a-lifetime expense.

 

The second connection is less direct.

 

Previous research tells us that people who experience economic strains, like a sudden job loss, are more likely to take on debt, lose access to health care resources and experience mental health crises compared to those who are gainfully employed. All of this leads to financial duress that can shorten a person’s life in the long run. That shows up in credit data too, the researchers say.

 

Click on the link for the full article

[PleaseBlitz]

Thats not surprising. Credit scores are remarkably sophisticated. When I was a mortgage guy I used to say that I could tell everything about a person from their credit report. 15 years later as an attorney, i still think that is basically true. 

[Renegade7]

My two closest male friends and little sister all got their students loans forgiven from the same school for the same reason that I'm stating in my borrower's defense application that I submitted today (we all went to ITT-Tech). 

 

My sister jus got confirmation today, hopefully I'm next...

 

 

[China]

Why Biden hasn't scored a political win from canceling $17 billion in student loans

 

Joe Biden has canceled more student loan debt than any other President -- a notable fact that's flown under the radar.

 

Taking a piecemeal approach, the Biden administration has expanded existing loan forgiveness programs for borrowers who work in the public sector, those who were defrauded by for-profit colleges and borrowers who are now permanently disabled.

Those moves have delivered significant relief to more than 700,000 borrowers, totaling more than $17 billion.

Yet some voters feel misled by the President, who had supported canceling $10,000 for each of the 43 million federal student loan borrowers while on the campaign trail.

"He's not delivering on his promise," said Jennifer Lewis, a 57-year-old nurse practitioner in Washington state who has about $80,000 in student loan debt.

"If he were to run again, I would think twice about voting for president at all," added Lewis, a self-described "super progressive."

Biden is also facing a drumbeat of pressure from some key Democratic lawmakers who are urging him to do more and cancel $50,000 per borrower.

That puts Biden in a tough political spot as federal student loan payments are set to resume May 1 after a two-year, pandemic-related pause. Biden could decide to extend the pause again, a move that could please borrowers in a midterm election year who are struggling with rising inflation.

But not every Democrat thinks it's a good idea to broadly cancel student debt, and some economists warn that extending the payment pause could make inflation worse.

"I think it's important to keep in mind that there is far from a consensus viewpoint among Democratic members of Congress and Democratic voters that large sums of debt should be canceled," said Michelle Dimino, an education senior policy adviser at Third Way, a think tank that promotes center-left ideas.

 

Click on the link for the full article

[Renegade7]

Because it's a $1.6 Trillion problem.

 

Bunch of mathematicians these folks are, maybe they should go to college or something. 😒

 

$17 billion out of a $1.6 Trillion problem is like walking around in Antarctica with a thong on and claiming you aren't buck naked.

Edited March 28, 2022 by Renegade7

[The Evil Genius]

Quote

57-year-old nurse practitioner in Washington state who has about $80,000 in student loan debt

 

I'm just a little curious as to when that debt was incurred..

[Ball Security]

5 hours ago, The Evil Genius said:

 

I'm just a little curious as to when that debt was incurred..

Yeah, me too.  Though they could have been a co-borrower for a child.

[PleaseBlitz]

https://www.consumerfinance.gov/enforcement/actions/edfinancial-services/

 

On March 30, 2022, the Bureau issued an order against Edfinancial Services, LLC. (Edfinancial). Edfinancial, headquartered in Knoxville, Tennessee, is a student loan servicer that services both FFELP loans, which are loans from private companies, and Direct Loans, which are loans directly from the Department of Education. The Public Service Loan Forgiveness (PSLF) Program is a government program that forgives student-loan debt for certain borrowers who work in public service and make 120 qualifying loan payments. Ordinarily, FFELP loans must be consolidated into Direct Loans before any payments qualify towards the PSLF program; but in October 2021 the Department of Education provided a limited waiver allowing payments to FFELP loans to retroactively qualify so long as the borrower consolidated into Direct Loans by a certain date. The Bureau found that Edfinancial made various deceptive statements to FFELP borrowers, including in many instances telling borrowers that they were not eligible for the PSLF program even though borrowers could become eligible by consolidating their loans; that borrowers could not consolidate their loans; that borrowers’ past payments qualified when they did not qualify; and that qualifying jobs did not qualify for PSLF. The Bureau also found that, in numerous instances, when FFELP borrowers asked about forgiveness options available to them, Edfinancial’s representatives did not mention PSLF as an available option. The consent order requires Edfinancial to contact all its FFELP borrowers to inform them of the limited waiver so that eligible borrowers can take advantage of the waiver before it expires. The limited waiver is currently set to expire by October 31, 2022. The order also requires Edfinancial to pay a $1 million civil money penalty.

[Llevron]

On 3/25/2022 at 5:45 PM, Renegade7 said:

My two closest male friends and little sister all got their students loans forgiven from the same school for the same reason that I'm stating in my borrower's defense application that I submitted today (we all went to ITT-Tech). 

 

My sister jus got confirmation today, hopefully I'm next...

 

 

WORD??? 
 

Send me the link (Also ITT Tech survivor 😿)

[Renegade7]

33 minutes ago, Llevron said:

WORD??? 
 

Send me the link (Also ITT Tech survivor 😿)

 

I got you, bro.

 

Fill out the "BDLR" form with everything they BS'd you about, but at minimum reference the "2021-States-Group" attachment as that was signed Virginia Attorney General at the time and primary reason many ITT-Students are being forgiven.

 

The address for where to send it is on "BLDR" doc, last page.

 

Make sure you attach a copy of your transcripts.

 

Working on clearing out my inbox, if you still got my number and have questions, halla at me.

BDLR.pdf 2021-States-Group-BD-Application_ITT-updated.pdf

Edited March 30, 2022 by Renegade7

[TheDoyler23]

On 3/28/2022 at 6:13 PM, China said:

"He's not delivering on his promise," said Jennifer Lewis, a 57-year-old nurse practitioner in Washington state who has about $80,000 in student loan debt.

"If he were to run again, I would think twice about voting for president at all," added Lewis, a self-described "super progressive."

Click on the link for the full article

 

To this imbecile, these two are the same:

 

A. Biden's administration has forgiven more in loans in 14 months than any president ever. Likely more initiatives for free college and forgiveness. 

 

B. Trump's secretary of Education obstructed loan forgiveness programs intentionally and was sued by several states to take action. 

 

 

. 

 

 

 

[Llevron]

@Renegade7 Bless you sir. I have a bottle of bourbon with your name on it. 

[Cooked Crack]

 

 

[skinsfan4128]

On 3/25/2022 at 4:45 PM, Renegade7 said:

My two closest male friends and little sister all got their students loans forgiven from the same school for the same reason that I'm stating in my borrower's defense application that I submitted today (we all went to ITT-Tech). 

 

My sister jus got confirmation today, hopefully I'm next...

 

 

Congrats,  renegade. Got my discharge a week ago for the same reason. ITT Tech. Frauds. If only I had known then what I know now.

 

HTTR!

[Renegade7]

Carrying this here from the Biden/Harris thread:

 

 

1 hour ago, PeterMP said:

 

We talk in circle because you don't actually respond to what I've written.  I say it is hard to argue that the debt is a big problem and that if you got rid of the bankruptcy laws there wouldn't be a DECENT number of bankruptcies and your respond by talking about EVERYBODY not declaring bankruptcy.  So I write a post to point that out.

 

I say the system doesn't completely collapse and you seem to equate that to there not being a decent number of bankruptcies.

 

Complete collapse is complete collapse where essentially nobody gets something equivalent to what is like a current student loan.

 

I alone make above the US median household income alone (not counting my wife who also has a stable and makes a good income).  I have a good credit score.  I have an extremely stable job.

 

If I walked into a bank and said, I want to take out an unsecured personal loan for $10K, I don't want to have to start paying that loan back for 4+ years, and I want a reasonable interest rate (well below what I'd get on credit card debt), I'd get laughed at.   No entity would give me that loan.  But we essentially do that regularly for 18 year olds that have no real income or work history.  The system completely collapsing is lenders treating those 18 year olds in the same manner as they would me for the same loan.  Which is for the most part, they wouldn't get it.

 

I think everybody would consider 75% above a decent bankruptcy rate.  If 8 years after a loan was made the bankruptcy rate was 75% (so a lot of people were getting done college and in those few years after saying you know I have this debt, I don't have any real income or property I'm just going to declare bankruptcy and start over) and the government said we don't care that the bankruptcy rate is 75% 8 years after the loan is made we're going to keep buying student loan debt, I don't think the system would completely collapse.  As long as the government is willing to buy that debt, you can have a large number of bankruptcies and many students will still be able to get student loans.

 

Given yours and some other recent posts about, starting to better get and importantly accept where you coming from with this, even if I don't like it.

 

1 hour ago, PeterMP said:

Next, it isn't my job to disprove your unsupported contention.  That's not how this works.  If you want to argue a point, it is your job to support it.  Just logically, the fewer bankruptcies the less significant the debt.  Most everybody agrees that health care costs are a big deal and most everybody partly agrees that it is a big deal because it is the leading cause of bankruptcies in the US.  If you want to argue that student loan debt is a big deal and that the number of bankruptcies would be low, that's on you.

See, this jus isn't fair.  To say the student loan debt crisis isn't a big deal because of a lack of bankruptcies knowing they can't declare bankruptcy for student loans feels like sticking to a definition and missing the forest for the trees.  If that's how economist insist on defining a big deal, there's not much I can do to change that, but this feels like more of a technicality then anything else.

 

 

1 hour ago, PeterMP said:

Though I do believe even at 10%, you'll find that student loan debt becomes very high ranking in terms of causes of US personal bankruptcies.  Especially, then if you look at bankruptcies and planned debt.  Most  bankruptcies are due to unplanned events (e.g. a health issue that causes a large medical bills/lost work hours).  Even at 10%, I suspect you have a new largest planned debt contributing to bankruptcies.  Which I think most people would consider a pretty big deal.  1% of mortgages entering foreclosure normally equates to an economic crisis (e.g. the great recession) and the number is normally under 0.5%.  So even at 10%, you have a rate that's 20* larger than we normally see with home loans and home loans are at least secured.  And part of the reason it is as easy to get a home loan is because the government buys a lot of that debt.  Even that 0.5% is propped up by the US government buying debt.

 

To an extent this is fair, and what I'll say is my frustration with this rule is even if 1% declares bankruptcy, that leaves the other 99% to keep this going, which circles around to my empathy to the seeming punishment of those 1% that want to declare bankruptcy because of their student loans but can't. 

 

This rule comes across as getting all of them the student loans in the first place at the expense of that 1%, which is a tough pill to swallow.

 

 

40 minutes ago, tshile said:

@Renegade7

i honestly can’t follow what it is you’re trying to get to here, in terms of your point and where you’re going with it. And I don’t think the issue is with petermp on this one. His responses make complete sense to me and I feel like he’s chasing you around in a circle. 
 

You can’t compare student loans to other general loans because the government secures them for the sole purpose of removing the risk for the lender. Without that, the lender wouldn’t lend the money. Because the risk is insanely high. But we do it because we want people to have access to the education even if they are high risk (no credit history, no job, no collateral)

you can’t make sure people that high risk have access to loans, without the government taking the risk away. 
 

And there’s a whole argument to be made that us doing this (government backing loans) is part of the cause of the rise of tuition costs. We increased demand. And we made it cheap for the system to run (easy to get a loan, risk taken on by government.) etc. 

 

I don't agree that demand alone is how we got to this point, a lot of it I believe is the government finally realizing the tuition costs have gotten out of control and there's too much noise now to keep letting it get worse and do nothing.

 

Having said that, there's a lot @PeterMP and I agree on, but went back and forth on this "government not allowing bankruptcy for student loans" thing because of jus not wanting to accept "the greater good vs neccesary evil" aspect of it.  I'm there now, and laying down my sword on it, is what it is.

 

34 minutes ago, bearrock said:

@Renegade7 @PeterMP Just wanted to add that why the current undue hardship exemption to student loan dischargeability has been so under utilized is a topic of interest to many bankruptcy scholars.  It's some combination of smart litigation tactics and strategic settlements by creditors, self fulfilling prophecy of misinformation (that student loan is not dischargeable or unde hardship is so hard to establish, it's not worth trying), and the paper mill approach to most consumer bankruptcy that ends up pushing many lawyers towards cookie cutter check the box bankruptcy filings as opposed to opening up adversary proceedings.

 

At the end of the day, out of an average of 250K bankruptcies that involve student loans every year, microscopic 400-500 file for undue hardship, who tend to be fairly successful in obtaining at least partial discharge.  Law review articles show that the financial profile of those who file for undue hardship are not all that different from those who do not.  I lay much of the blame for this at the feet of lawyers who do not adequately consider their client's individual circumstances.

 

The current undue hardship test is a pretty solid approach.  If there was a system in place to objectively measure presumptive undue hardship, so that debtors can plug in the numbers to see if they likely meet the definition, I think that would be a good thing.

 

24 minutes ago, goskins10 said:

Just a point of clarification. Discharging of student loan debt through bankruptcy is possible.  The bar of proof of hardship is higher but it is possible. And if the Fresh Start Through Bankruptcy Act introduced in Aug 2021 passes it will remove that extra burden and generally make it easier.   

Thank you for posting this, this helps me feel a little better about options for folks that believe they don't have any (which is really the core of my rant on student loan bankruptcies)

Edited May 6, 2022 by Renegade7

[bearrock]

I don't know if they do this or not, but if they don't, I think mandatory credit/outlook counseling for prospective borrowers would definitely be a good thing. 

 

What it costs you to borrow x at y% over z years.  What average and median income is for graduates in your major from your university.  What your disposable income would look like post graduation with and without student loans.  What alternatives to student loans exist.  Referral program for on and near campus jobs for prospective and current borrower students.  Strengthening grant programs and tuition discounts for students from middle and lower class families who work to put themselves through school.  Things like that.

[Skinsfan1311]

On 4/5/2022 at 3:18 PM, skinsfan4128 said:

If only I had known then what I know now.

 

HTTR!

Even as a father of two college graduates, who have taken loans,(one of whom has paid pack every cent...and the other close), I've read the room and have avoided treading  these waters.  My thoughts on loan forgiveness would not be popular and I'm a weak internet warrior 😉.

 

That being said @skinsfan4128, good on you to get that burden off your back.    "If I had known then what I know now"     Those are wise words....

 

 

 

[PeterMP]

41 minutes ago, Renegade7 said:

I don't agree that demand alone is how we got to this point

 

PLEASE for the love of God slow down and read what people are writing or at least make your responses relevant to what people are saying.

 

"And there’s a whole argument to be made that us doing this (government backing loans) is part of the cause of the rise of tuition costs."

 

He's clearly not saying demand ALONE is how we got to this point.  Responding with you don't agree that demand alone is why we are where we are with respect tuition increases has no relevance to what he (or anybody else here) has said.

 

If you want to be extremely pedantic, he's not even saying that high tuition is partly caused by government loans.  He's saying there is an argument that can be made (where an argument can be wrong or right).  He's not explicitly stated that he believes government loans contribute at all to high tuition.

Edited May 6, 2022 by PeterMP

[PleaseBlitz]

10 minutes ago, bearrock said:

I don't know if they do this or not, but if they don't, I think mandatory credit/outlook counseling for prospective borrowers would definitely be a good thing. 

 

They did this for my grad school loans.  The "credit counseling" was perfunctory and hilarious.  First, they did it at the end of my 3 years of law school, not, you know, before I was committed to the extraordinarily large amount of debt.  Second, the person they had do the counseling was completely inept, much like a substitute teacher that is exactly one lesson ahead of the class.  Prior to law school i had spent 8 years in consumer lending so I actually know how debt works, so I spent the entire meeting making sure that they were very aware of their ineptitude.  They learned much more than I did (which was nothing). A complete waste of my time. 

[tshile]

29 minutes ago, bearrock said:

I don't know if they do this or not, but if they don't, I think mandatory credit/outlook counseling for prospective borrowers would definitely be a good thing. 

Another idea:

 

how about we require you to be 22 or 24 to get a government backed student loan?

 

thst way you’ve got 4-6 years as an actual adult, to allow you to better judge:

- do I need this education

- do the terms of this loan make sense for the education of be pursuing, such that this loan is the best way to do it

 

I realize there’s a knee jerk reaction to why make them wait 4-6 years, but it would cause a lot more people to better understand the decisions they’re making, and it would make it a lot harder to be predatory on them. 
 

We’re letting people that are still highschoolers in terms of experience and knowledge and decision making (yeah they graduated and yeah they’re 18, but their life experience when making this decision is still maxed out at “high schooler” and many of these divisions are actually made well before graduating….) decide if they want to take on an enormous debt for an education they hardly understand so they can go party with their friends away from their parents for 4 years (little over dramatic here I know)

 

 

People get married later, have kids later, live longer, there’s no reason you have to go to college right out the gate of highschool graduation. 

Edited May 6, 2022 by tshile

[PleaseBlitz]

3 minutes ago, tshile said:

how about we require you to be 22 or 24 to get a government backed student loan?

 

Because that punishes the 19-21 year olds that actually do have their **** together, and have a plan to achieve their life goals, which is a substantial % of them.  These are, of course, the people you never hear about because people who are doing exactly what they are supposed to be doing never get attention. 

Edited May 6, 2022 by PleaseBlitz

[tshile]

1 minute ago, PleaseBlitz said:

 

Because that punishes the 19-21 year olds that actually do have their **** together, and have a plan to achieve their life goals, which is a substantial % of them.  These are, of course, the people you never hear about because people who are doing exactly what they are supposed to be doing never get attention. 

well no one seems to give a **** how people that don’t have loans figured it out and get punished by receiving nothing with this debt forgiveness policy?

 

so why should I give a **** about these people

 

But on a more real comment - it only punishes them if you choose to view it as a punishment. It doesn’t have to be viewed that way. 
 

there’s no rule that says you have to go to college at 18 or else you’re somehow being screwed over. 
 

Keeping in mind it doesn’t block them from going to school. It would just delay when they can get a loan backed by the government because they’re entirely too risky for lenders to otherwise give them money. They would have other options including combinations of things like - working and going to community college so they can pay for their school they’re too risky to qualify for a loan for (yet)

 

it would also (I think inherently) reduce the risk the government is taking on, by ensuring people (should be) making better decisions about borrow such large sums of money. Plus, people would probably do better in school being a bit older (on the whole) producing better educations yadda yadda 

[tshile]

Or. Maybe instead of 22/24, just 20. 
 

wait 2 years. Be an adult for 2 years before making such a huge commitment. 
 

and oh by the way you actually got your **** together that well, then what you’d do (cause you’re smart and have your **** together) is go get a job and spend those first two years knocking out the basic undergrad **** at your local community college where you can afford to pay your way with your basic job. 
 

Now you’re not any further behind cause you did those two years of school. They’re already paid off so no debt. And you spent significantly less money in your overall expense of pursuing your academic desires, so you’ve significantly reduced your overall expense for your education. 
 

and you’re less risky for the government now. 
 

 

Edited May 6, 2022 by tshile

[PeterMP]

11 minutes ago, tshile said:

Or. Maybe instead of 22/24, just 20. 
 

wait 2 years. Be an adult for 2 years before making such a huge commitment. 
 

and oh by the way you actually got your **** together that well, then what you’d do (cause you’re smart and have your **** together) is go get a job and spend those first two years knocking out the basic undergrad **** at your local community college where you can afford to pay your way with your basic job. 
 

Now you’re not any further behind cause you did those two years of school. They’re already paid off so no debt. And you spent significantly less money in your overall expense of pursuing your academic desires, so you’re acquiring less debt. 
 

and you’re less risky for the government now. 

 

Or you'd have significant scholarship/financial aid from where you are going that you'd be able to afford going there without (large) loans (initially).

 

It wouldn't be hard for universities to say, we'll cut you a big break on costs for 2 years, you can come here, and then the last 2 years when you can get loans you'll have to pay more.  The university could even work it out so they were being paid the same total amount but just over 2 years instead of 4.

 

The person would have 2 years more of college and life experience to decide whether they wanted to take on that debt and 2 more years to consider what they were going to do for a job after college and to have a better understanding of how much they were likely to make.

 

For people that really have their act together, I'm not sure there really would be much of a penalty.  The system would I think (largely) adjust for those people.  There might be a period of time before the adjustment can happen, but I don't think it would be too much.

Edited May 6, 2022 by PeterMP