Based on the comments there might have been some confusion on my stance with respect to bankruptcy for student debtors.  If I were king of the world I would certainly grant student debtors bankruptcy protection AS WELL AS instituting a policy capping payments as a percentage of gross income as well as setting limits in terms of how long payments could be required to continue.  I would appoint Alpha Man as “student loans czar” and let him have at it.

Where I disagree with Alpha Man is with respect to the wisdom of spending our finite resources campaigning for renewed bankruptcy protection given the history of student loans and given alternatives like the President’s proposal.  I simply don’t think it’s realistic that these giant profit mills are going to take it from both sides, aka taking on the added risk of bankruptcies AND the added risk that individuals will only repay a portion of their loans over the course of the allotted time with a restraint on the amount of a student’s accessible gross income.  I just don’t see it.

Read the rest of this entry →

Hi kids.  I am sure you have heard about the petition going around trying to drum up support for bankruptcy protection for student debtors.  But who does that help?  Is that really the answer?  I am going to put in my two cents before I leave it to the gang to discuss.

Essentially I don’t think it’s the answer.  Here’s why.  At the end of the day the man gets his money and lawyers ruin everything.   Here’s what I mean.  Collectors collect.  We as a group lost bankruptcy protection when newly minted lawyers declared bankruptcy, discharged their loans and then went on to lucrative careers with the inconvenience of paying a higher interest rate on credit cards and mortgages.  If bankruptcy protection returns, these people will game the system again and collectors will simply find some other way to get their money.  One way could be to astronomically increase interest rates on student loans.  Another way would be to demand parent cosigners for student loans (thereby eliminating bankruptcy as an option if you care about your family).  The point is, we’re not slick compared to the man.  The man will get his money.

Read on as I finish my thought and the gang ways in

Read the rest of this entry →