Life led Elizabeth Hadzic and Kim Coles to bankruptcy court.
Hadzic, 50, a psychotherapist in Maryland, doesn’t make enough to support herself and her adult son, whose health struggles set her back thousands of dollars. Coles, an accountant in Oregon in her late 60s, was laid off last year.
Both have tens of thousands of dollars in student loan debt. Although they have been making payments on those loans for years, they no longer can. And both, in the absence of an alternative, have resorted to taking the costly, typically unsuccessful route of trying to get their loans discharged in bankruptcy court.
That’s where things diverge.
For Hadzic, bankruptcy is proving to be the answer to her financial woes. After months of litigation, she’s on track for a full discharge. In Coles’ case, the government is putting up a fight − though she is of retirement age − against discharging the balance of a loan she’s been paying down for more than a decade.
“I always paid my student loans,” Coles said in an interview. “I was never late.”
The disparity in how the government is treating their cases is indicative of the intractability of one of the country’s most extreme and inaccessible forms of student debt relief, as the Biden administration grapples with finding alternatives to the kind of sweeping student loan forgiveness option that the Supreme Court struck down in June.
I don’t understand why the government can’t at least offer everyone the opportunity to refinance at zero interest so they can get those private debts paid off.
Especially for government owned loans. It’s always been bizarre to me that I pay interest on my federal student loans. My education makes me a huge contributor to the economy already, why do I need to pay back 2-3x my tuition over the term of my loans too?
Because they’re considered safe loans because they are very hard to discharge. So your student loans are funding your parent’s pension funds and 401k’s
Isn’t it that the companies overseeing those pension funds and 401ks have given out that money as risky loans because they had the promise of being able to create a generation of debtors by going into schools and targeting children for predatory interest rates?
I am on board with cancelling some student debt for those who are struggling, but I wonder if this is a good long term solution. How do we stop getting overburdened graduates into the debt machine at 22? Do we lower tuition costs, make college free, talk kids out of going, giving more government grants to low income students?
If the taxpayers are going to socialize anything I’d prefer to start with healthcare. That impacts everyone.
You can socialize more than one thing at a time. Student loan debt affects everyone too. We have an entire generation right now who can’t afford to buy a house, and who are putting off marriage and having kids. That effects the entire economy. Not to mention they can’t save for retirement if a good chunk of their income is going into student loan debt.
A few counters to this:
Given that public opinion weighs so heavily on the ability to get anything done, healthcare, to me, seems like an easier win. Focus on one thing, get it done right, make people happy, get elected to a second term.
Student loans do not affect everyone. College attendance is declining and nobody ever dies from not having a bachelor’s.
Home prices and interest rates are out of control, but neither has anything to do with student loans. Home prices have risen at way beyond inflationary rates to beyond what is affordable even for those without debt. Other factors are at play here.
Stopping the student loan program would be a good start. It would cause some people to not be able to go to college, but it would likely save far more from a debt trap. Stopping loans would also apply a huge downward force on tuition, which may actually help more people afford to go to college in the first place.
Maybe after a few years of no loans, a grant system could be created. It would pay participating universities directly, if they agreed to some level of affordable tuition. You could tie additional grant money to performance objectives that are harder to game like graduation rates, job placement, average salary of recent graduates, and performance of the bottom quintile.
Interesting to think about. I wonder how much schools would need to scale back to make a noticable difference in tuition and what jobs would be cut in the process. At a time when private colleges are already struggling, it might be difficult to find the fat to trim.
Admin jobs would be cut. The vast majority of tuition increases have not gone to the faculty, who teach the classes.
I assume the schools would just partner with a bank and offer their own loans at that point. Similar to those store credit card scams
There’s tons of administrative fat. Also admission staff could be cut because of reduced enrollment. Financial aid departments would lose 90% of their options, so could be reduced.
Healthcare is a good start, but education is the biggest investment we can possibly make. Why not both, though? The money exists.
Well, sure, the money exists, but it’s not for those people
Pre George W. Bush, it was perfectly legal to discharge student debt in bankruptcy. That made loans harder to get, and consequently, kept college prices from these insane increases.
Does anyone know how they plotted that “Student loan debt” graph? Looks nice.
LOL, the irony. Biden is a HUGE part of why student debt can’t be discharged. OH, how he happily wants to forget about his past in Congress.
Biden co-sponsored bankruptcy exemptions under Regan and more. HE was PIVOTAL in fucking over students. The guy is a severe piece of shit. And we won’t talk about his anti-choic activities and associates in the past.
The difference between the parties explicitly in economic terms is zero. There are two capitalist parties who are lock in step with their billionaire donors.
People can change, my man. Forty years is a long time.
When people change magically at the same time their approval has cratered, on one of the issues wrecking his approval (again, that he helped architect but doesn’t own up to as a mistake), then it’s important to be suspicious or get duped.
Well, be fair. This wasn’t how he wanted to deal with student loan debt relief. But Republicans sued the federal government, and the stacked courts served their masters well by preventing the loans from just being discharged outright. Now we have yo try and find all these bullshit, overly complex, and deficient mechanisms to try and help people. We do still want our presidents to follow the law,
even ifespecially when they don’t want to.
I find it hard to decry someone trying to correct his past mistakes. There are too many people on the hill willing to endlessly hard-line their past stances in spite of them being proven wrong or ineffective. I’d rather criticize them or Biden for his current on going mistakes than for things he’s turned the corner on.
If he was doing that saying “I fucked students over for rich assholes. I regret it. I want to change it.”
Sure.
But he’s pretending he had nothing to do with it. And counting on people too young to know he’s an architect of fucking students financially.
That’s something totally different than correcting his past mistakes. Especially since he’s in dire political trouble, and this is a pandering move.
Okay, so what would you rather happen instead? Biden… not look for ways to relive student debt? Hope to vote for a 3rd party candidate that won’t get elected? Or you could vote for Trump or another Republican, who want to charge back interest for the student debt pause during the pandemic?
I’m just trying to figure out where you’re going and what you’re trying to accomplish with your rage.
Removed by mod
Man, let people grow. If you keep holding everyone to what they did so many years ago, they got no reason to do better now.
If the dude wants to overwrite things from the past, using his powers of the present, I say good.
Actions are worth more than words though, so time to start making changes
Biden definitely doesn’t want people juding him on actions.
From day one he could have done all the student debt relief via executive order. Yes it was debateable among scholars, but plenty of laywers and academics believed it consitutional.
Worst case scenario it would have spent ages in the courts, meanwhile the reprecussions from countering the executive order would have snowballed to where it would have been nearly impossible to unwind it.
Trump and Bush have showed the Dems the new norm over and over. You do what you want, worst case it spends years in court while staying in effect, THEN if you lose in court, you do the same thing but so slightly differently that the effect is the same and you start another cycle of years and years of living with it.
This was an easy and clear strategy to deal with the student loan crisis. But again, as an architect of preventing students from discharging loan debt via bankruptcy—his actions speak loud and clear (just like you said).
And I’m fine if people learn from their mistakes. But when they seek to rewrite or burry history that’s not learning from their mistakes. Nor is catastrophcially crashing in the polls and needing the younger voters so suddenly this is a priority.
Ironic since Biden is the reason you can’t discharge your debt in bankruptcy now.
Don’t borrow what you can’t afford to repay. Easy. Not everyone was stupid enough to get indebted up to their eyeballs, and many weren’t “fortunate” enough to even try.
Student debt is sold based on a lie about earnings potential for graduates. Debtors are told that they’ll be making X amount of money and will be able to pay off their debt in Y number of years. Then they graduate and find out it was all a lie.
Not at all. All the data is perfectly clear. Some professions make more money than others. Some of those professions require degrees. There are numerous professions that require degrees that do not pay much more money. The lists of the current professional average salaries per geographic area have been published for decades.
If you are too stupid to read a list and see that a $200k education for a $40k/yr job is a poor life choice, why is everyone else subsidizing you?
A $200k education for a $200k/yr job is currently worth it if that’s what you want to do. It is not a lie. You just have to do literally 10 minutes of work before you decide your entire life’s trajectory. I guarantee these same idiots did more than 10 minutes of “research” to decide what colour $1.5k iPhone they’re going to buy.
Stupid 18-year-olds not understanding complex economic details and believing it when a financial authority lies to them! What are they, fresh out of high school?
That’s not an escuse lol? Lots of people figure it out properly. By 18 you should know what you have interests in and what you want to do. If you are that misguided you can delay further education until you have figured it out. Or not at all. Being after high school means you need to know what to do with your life. School is an option.
If you haven’t, you’re just stupid and/or lazy. That’s your prerogative to be that way. But don’t drag everyone else down. And this is also why Americans are increasingly laughed at in the world as uneducated and over entitled. Just because you want to make excuses as to why you can’t learn things, doesn’t mean the rest of the world is following suit.
Of course never having been educated on such topics is an excuse. How are you supposed to understand something no one taught you? It isn’t stupidity or laziness despite how much you enjoy calling people stupid and lazy.
While that is true on the surface, system in USA is so predatory when it comes to finances. You literally can’t afford any mistakes of any kind or you are going under.
