Millions of US Seniors Still Owe Student Loan Debt (msn.com)
- Reference: 0175777725
- News link: https://yro.slashdot.org/story/24/12/28/0423232/millions-of-us-seniors-still-owe-student-loan-debt
- Source link: https://www.msn.com/en-us/money/personalfinance/elderly-student-loan-borrowers-owe-121-billion-they-ask-biden-for-relief/ar-AA1wz0dv
Roughly 40 years ago she went to law school, but was only able to find work as a legal aid and later work in the public school system, which [1]the Washington Post calls "a rewarding job but one that didn't pay enough to wipe out her loans." Later she earned a masters of education degree:
> All told, Warner borrowed a total of about $60,000 for her two advanced degrees. The amount seemed reasonable given the career trajectory that both credentials promised, but that path never materialized. Working a series of low-wage jobs, she went in and out of forbearance before ultimately defaulting. The balance ballooned to the current $268,000 total over the years due to collection fees and interest capitalization.
And she's not the only one in debt. "On a dreary December afternoon, a group of senior citizens stood in the rain outside the Education Department pleading for relief from a debt that many fear will burden them for the rest of their lives..."
> Some sat in rocking chairs, cross-stitching their debt number in a pattern. Others held signs that read, "Time is running out, sunset our debt." Or wore T-shirts saying, "Debt relief before we die...."
>
> [A]ctivists are urging the U.S. Education Department to discharge the student debt of older borrowers who they say are in no position to repay. They say the department could use a little-known federal statute that considers a person's ability to pay within a reasonable time and the inability of the government to collect the debt in full. There are 2.8 million federal student loan borrowers aged 62 and older with a total of $121.5 billion in debt, more than 726,300 of them over the age of 71, according to the Education Department. Older borrowers are one of the fastest-growing segments of the government's student loan portfolio, and their Social Security benefits are subject to garnishment...
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> The Education Department would only acknowledge receiving a memo from the Debt Collective, the group organizing the campaign, outlining the agency's authority to cancel the debt of older borrowers. The activist organization said it has been meeting with members of Congress, White House committees and Education Department officials about the matter since September. "Many of these folks have been borrowers for 20 or 30 years, with punishingly high interest rates. Their balances and the way they have dragged on for decades is just an indictment of the broken system and the failure of past relief efforts," said Eleni Schirmer, an organizer with the Debt Collective... According to the think tank [2]New America , the number of Americans approaching retirement age with student loan debt has skyrocketed over 500 percent in the last two decades. Some have loans they took out to finance their college educations, while others took out federal Parent Plus loans or co-signed private loans for their children.
The article points out that the U.S. government will [3]garnish up to 15 percent of the Social Security income to recoup student loan debt, even if it means leaving recipients [4]below the poverty line .
But it also includes this quote from Adam Minsky, an attorney who specializes in student debt, about the prospects for federal action that survives challenges in the U.S. court system. "[A]s a practical matter, I don't think that judges and courts that have been hostile to mass debt relief would treat this differently from other programs that have been blocked or struck down."
[1] https://www.msn.com/en-us/money/personalfinance/elderly-student-loan-borrowers-owe-121-billion-they-ask-biden-for-relief/ar-AA1wz0dv
[2] https://www.newamerica.org/education-policy/collections/older-americans-with-student-loan-debt/
[3] https://www.washingtonpost.com/news/grade-point/wp/2016/12/20/the-disturbing-trend-of-people-losing-social-security-benefits-to-student-debt/
[4] https://www.gao.gov/assets/d1745high.pdf
Re:What college did they graduate from? (Score:4, Interesting)
Seems all too common with any kind of debt people are having trouble repaying. The magic word is [1]collection fees [nerdwallet.com]. Once you default, they'll have you by the short & curlies. We had similar issues here until parliament placed strict limits on collection fees.
[1] https://www.nerdwallet.com/article/loans/student-loans/collection-costs-defaulted-student-loans
Re:What college did they graduate from? (Score:4, Insightful)
The magic word is collection fees
Yeah.. It should be made illegal to add "Collection fees" on top of a debt, except if the fees are the actual costs of a court proceeding and the Judge orders that the costs be added. Collection fees are invented numbers likely fabricated, and there's no explicit agreement by the borrower to them.
Lenders already have compensation for their costs and risks: It's called the interest rate.
For education loans it should be made Illegal for the bank to capitalize or add interest on top of any amount greater than the sum originally borrowed and actually paid to the borrower or to the school on the borrower's behalf.
Leading by example (Score:2, Interesting)
Just following the example of our current president elect. [1]https://www.nbcnews.com/politi... [nbcnews.com]
[2]https://www.the-independent.co... [the-independent.com]
[1] https://www.nbcnews.com/politics/2024-election/cities-seek-750k-unpaid-bills-trump-campaign-events-rcna174757
[2] https://www.the-independent.com/news/world/americas/us-politics/rudy-giuliani-bankruptcy-trump-campaign-b2492533.html
Re: (Score:1)
The actual NBC article: "Yeah, the Secret Service is actually liable for those charges, and some of the cities have incorrectly tacked on huge extra fees and sent the bill to the campaign, but we're going to keep pretending it's the campaign's responsibility."
What the Independent article fails to mention: Any money Trump pays would be going straight to the money owed by Giuliani in that lawsuit, so Giuliani doesn't care too much at this point.
Solution (Score:5, Insightful)
Allow education debt to be discharged via bankruptcy, and charge back to the institutions which received the money.
Doesn't help the current batch of folks, but then they agreed to the current terms and failed to fulfill their end of the bargain so I don't feel bad for them.
Re: (Score:3)
> they agreed to the current terms and failed to fulfill their end of the bargain so I don't feel bad for them
Why would we put *all* the responsibility for a contract on the little guy?
There's a clear merchantability claim warranty tort here if the school offered a degree without a clear warning label that the degree is unlikely to lead to a career that can repay the loan.
Especially if the contract was sold to a 17 yr old but we all know that you have to be 25 to rent a car for good reasons.
And that's on
Re: (Score:2)
There's a clear merchantability claim warranty tort here if the school offered a degree without a clear warning label ..
No; this is nonsense. I believe the issue is going to be that she didn't commit adequately and stick with the field her degree
was in, and instead she chose to pivot into general teaching which has no real career path, and as a country in the US we
pay our grade school teachers abysmally.
The law school would likely have not suggested she go into a general teaching career. You do NOT pursue a
Re: (Score:1)
> Allow education debt to be discharged via bankruptcy, and charge back to the institutions which received the money.
> Doesn't help the current batch of folks, but then they agreed to the current terms and failed to fulfill their end of the bargain so I don't feel bad for them.
Last I checked, the entire fucking point of bankruptcy applies to ALL batches of folks in a certain situation who have no other choice.
The fact that educational debt is exempt from that, is a problem. Selling a worthless degree that education pimps know is worthless, is THE problem. You want to pursue an educational hobby? Do it on your own fucking dime. No loans for hobbies. Use your passion to fund that.
Re: (Score:2)
Student loans are a way for low income students to attend college. If they end up costing the universities more, then the universities won't accept them and we will be back to the old days when only the wealthy went to college.
OTOH, if colleges are guaranteed payment, then they have no reason not to keep increasing tuition while building every fancier campuses.
Maybe the best solution is free, but highly competitive public universities as the way the govt supports education. That would at least allow low in
Student loans are a scam (Score:4, Insightful)
They are the ONLY loans in the US that cannot be discharged in bankruptcy. This creates all sorts of predatory lending practices and immoral incentives. We need to reform the whole system.
Re: (Score:2)
Its tricky. Most normal loans are backed by some tangible good, a car or a house. There is no way to reposes an education if someone decides to simply default on their loan. I agree with reform, but its not clear how to do it.
Re: (Score:2)
> They are the ONLY loans in the US that cannot be discharged in bankruptcy. This creates all sorts of predatory lending practices and immoral incentives. We need to reform the whole system.
If we stopped providing loans for degrees that have traditionally (read: consistently ) been found to be basically worthless from a financial return perspective, I wonder how many colleges would have to cull a considerable portion of their for-profit catalog due to lack of demand? Not sure if getting rid of bankruptcy exemptions is the ultimate answer, but it might help with the problem of a lot of people walking around with a certified hobby certificate that cost them $80K.
I agree with total reform. Perha
The answer is simple (Score:2)
Eliminate interest in student loans and credit all interest paid toward principal
Just create a govt. (zero profit) loan (Score:4, Insightful)
If you think education is a societal benefit then lobby to have a govt issued loan for students where the interest is the real time insurance over all outstanding defaults. If nobody defaults there is no interest accrued on anyone's loan. if 5% of students default then the interest is exactly the right amount to cover the 5% loss from the program.
Doesn't cost the govt. a dime and doesn't enable lender grift on a social benefit. Won't fix the institutional (Universities, etc.) price gouging, but it at least stops predatory lending.
The government should not back student loans (Score:2)
The US government should not be in the loan business without a viable collateral. Otherwise the taxpayer gets screwed.
Some degrees/certs ie electrical engineering, medicine, trade school have proven future earnings. Outside a proven earnings collateral the loan should be from the school.
Re: (Score:2)
Taxes at the federal level are not linked to spending. Taxpayers aren't screwed by people defaulting student loans. Before you say "but inflation", keep in mind that most of the current "inflation" we are experiencing at the grocery store is actually just price fixing via agri stats.
such victims (Score:2)
If this person is 71, then she was extraordinary in her mere ability to accumulate such a great loan amount, then it appears she made no attempt to pursue the career she committed to when she borrowed such an immense amount of money. People bought homes for less at that time. Student loans were once uncommon.
"...but that path never materialized"
Yeah, sure. Wonder why? Wouldn't that be an essential part of the story?
"They say the department could use a little-known federal statute that considers a person
And voted (Score:2)
don't forget "and voted Republican". They voted against the aid they needed. Many of them will be pushed into homelessness because of it. We've seen a 20% rise in homelessness this year and a lot of those are seniors. Some of them still working full time.
The face eating leopards are eating well. At this rate they're gonna need Ozempic. It's OK though, we're gonna take away senior citizens' medicare too so they'll be plenty left over for the leopards
Re: (Score:2)
People with student loan debt overwhelmingly voted Democrat. And lost!
[1]https://today.yougov.com/polit... [yougov.com]
[1] https://today.yougov.com/politics/articles/49386-explaining-partisan-gap-support-student-loan-debt-forgiveness-poll
Re: (Score:2)
That analysis doesn't fit the narrative. Don't expect any sort of introspection.
UK Student Loans Automatically Cancelled (Score:4, Interesting)
Here in the UK, my daughter has a student loan from the government. Any remaining debt will be automatically written off 30 years after she took out the loan. The government has recently extended this for new students to 40 years. If someone dies then their loan is automatically cancelled.
Calculations by people who look into these things suggest that most students won't repay the loan in time (repayment rates are fixed and depend on income) so most loans will eventually be written off.
The need to ration degrees (Score:2)
In reality too many kids go to university without it really adding to their earning power; they just get to keep their professors and the bureaucrats at their university in the life style to which they have become accustomed. Part of the problem is the 'arms race' element: too many employers use the absence of a degree as a reason to ignore your application - because they get too many. A possible solution to this is to tax employers a flat sum - perhaps $10,000 or 5% of earnings - for each graduate they emp
Seems obviously wrong (Score:5, Informative)
If you haven't recouped your loan in decades, garnishing social security and pushing someone below the poverty line at the end of their lives is just plain evil.
Re: (Score:3)
What's also wrong, is that educational institutions don't take a hit when borrowers default. If their money was at risk, they would be a little more careful about which students, and what kind of degrees, they agreed to accept through financing. Instead, taxpayers are on the hook when borrowers fail to pay.
In home mortgages, part of the mortgage application process is proving one's ability to repay. This should be part of the student loan process too.
Re: (Score:3)
"This should be part of the student loan process too."
Sure, as if this were possible or it would do anything. For all we know Valerie Warner had an ability to repay.
We should educate our children, a lifetime of debt should not be part of that process. If that were the case, stupid solutions like yours would not be needed.
Re: (Score:2)
> We should educate our children, a lifetime of debt should not be part of that process
I think you are advocating for fully government-funded education, right?
What about religious studies? Should government fund that too? Should ALL education at every level be government funded? What about students who never apply themselves, just going for the free ride and the party school atmosphere? Should government fund these students too? What about career students, who keep signing up for degree after degree? Should we fund those too? Where do we draw the line?
Re: (Score:2)
With kids, it's too speculative; you're not investing in the individual, you're investing in the entire cohort and looking for a statistical victory.
While funding for vocational tracks has a somewhat predictable ROI, paying for the extended education of the big brains... even if they change the damn world they often don't make a lot personally. And you need those people or progress grinds to a halt, and often when that happens it then begins to revert. We don't have a decent model to calculate how investi
And? (Score:4, Interesting)
Never ask a man how he made his first million. Evil is very much on the table.
Over the next 4 years it's gonna get rough. Tariff driven inflation coupled with mass layoffs following mergers approved by lax regulation is going to trigger a massive recession.
Just last year we had a 20% increase in homelessness. There are people reading this right now that won't be housed by this time next year...
Meanwhile the co-president just came out in favor of importing more cheap labor... so the Job market is going to hell too.
Re: (Score:1)
Try sticking to the topic at hand next time. You didn't even bother to mention student loans.