From the Texas Tribune:
If 69-year-old Lynda Sue Costley wants to shower, she has to go to a friend’s house. Her trailer, on a gravelly road outside Amarillo, hasn’t had running water since 2014 — when her husband died from cancer. She spent the little savings she had on his medical care, she said, and hasn’t repaired the burst pipe.
Costley works part time at a food bank, making $7.25 an hour, and said she stretches every dollar she has. But every month, she receives a letter in the mail saying the federal government is withholding $134 from her Social Security checks — the equivalent of 18 hours of work.
Like death and taxes, Costley may be facing another certainty in life: her student loans.Although she attended college decades ago and made payments when she could, Costley’s debt has gone into default, swollen with accrued interest and been turned over to a collection company. She’s had her wages garnished and her income tax refunds withheld. Nearing 70, she still owes nearly $12,000 for classes she attended in the 1980s and 1990s — and her balance continues to be padded by interest and the debt collector’s costs. ...
Typically associated with millennials, the specter of student loan debt hangs over potentially thousands of retirement-age Texans, like Costley. Older Americans — ages 65 and over — were the fastest-growing demographic of student loan holders, according to a government report from 2016, and the most likely to be in default. ...
Student loan debts aren’t like other debts. They can’t be discharged in bankruptcy and Social Security benefits may be garnisheed to collect them. It’s time to change one or both of these.
12 comments:
This would seem to be an appropriate case for Ms. Costley to file bankruptcy. A Chapter 7 would discharge the SSA overpayment (I am assuming that the $134 represents an overpayment) and given her age and unlikelihood of ever earning enough to pay off the student loan debt, she should qualify for a hardship discharge. This all assumes that she is eligible for bankruptcy and that she would be able to find a lawyer or legal aid that could represent her at a reduced cost.
2 choices?
It's time to get out of the student loan business. Loaning money going to these fine art schools when there is little job market for them makes no sense.
Let government student loans and gov't backed loans dry up and watch the private college tuition fall.
Be responsible for the debts you sign up for, either for yourself or others. You signed the paperwork, the money was given out. Now accept the consequences and pay back the money that was taken.
"Let government student loans and gov't backed loans dry up and watch the private college tuition fall."
And watch the unemployment rate increase. And watch the US economy shed millions of jobs to countries with more educated, creative and well-rounded populations.
To be fair, I have no doubt that lending has some effect on demand, and that this, in turn, drives the cost of higher education upward to some degree. But cutting that off without first addressing the many other underlying causes, chief among them our population's unwillingness to provide adequate funding for education through taxes, is not a legitimate solution. It's a flippant, short-sighted idea that will leave us unable to compete in the global economy and lead to political outcomes even worse than our current (already awful) circumstances.
That said, I won't waste any more time trying to reason with someone who believe the arts have no real economic value. I can see where this is headed, and I don't care to sink down there.
It is your debt, pay it.
Could almost certainly show an undue burden for those remaining student loans in her current financial circumstance if portrayed accurately here. Therefore likely eligible for Ch 7 discharge.
Actually, there is an incorrect statement here.
"Student loan debts aren’t like other debts. They can’t be discharged in bankruptcy and Social Security benefits may be garnisheed to collect them."
THIS IS TRUE ONLY OF GUARANTEED GOVERNMENT-BACKED STUDENT LOANS, not credit-based private loans. Many years ago I filed for bankruptcy and the layer said I could not have my student loan dismissed. He didn't even think it was possible when I told him it was a private, non-government backed loan. He was wrong and so only government backed student loans cannot be dismissed in Federal Bankruptcy Court.
Furthermore, if this loan was not in default and delinquent she may have been able to pay less then the $134 by using the IBR Program, which many people do not know about.
The problem is that these people larded themselves up with non-dischargable debt. On purpose. I'm a attorney and I see this with low-income clients all the time.
My law school roomate larded himself up with federal debt to the point where he actually maxed out on the amount of debt he could obtain at the time. I had no idea you could max out, but he did. He had already spend two years at Harvard prior to law school. I'm pretty sure Duke bailed him out for the last semester. And this was 20 years ago.
So, there is a massive amount of willful stupidity here. The federal government is knowingly larding up students with debt and the students are knowingly larding themselves up with debt that they then spend on...lots of things...entertaining things. Gin gimlets and such.
And yeah, this is an anecedote. But I'm pretty sure it's indicative of the general stupidity that created this problem.
@6:22. Given that the cost of law-school tuition at most school exceeds the federal borrowing limit (as does tuition for a 4-year degree at the vast majority of colleges/universities), I hardly think spending on "gin gimlets and such" is the real problem here. And I hardly think it's stupid to pursue a bachelor's degree or graduate-level degree in an economy wherein doing so has essentially become a pre-requisite for having any hope to earn significantly more than the unsustainably low minimum wage.
Here’s an idea, make college free (funded by the government) at a more reasonable level (less than current exorbitant and inflated tuition rates), and watch the economy explode with intelligent Americans who are no longer slaves to their government.
Replace the words "student debt" with "mortgage" or other debt. Why are you so willing to let people walk away from debt the volunteered for and signed for making a contract to pay back?
Dont go off topic talking about disability, this story, the one we are commenting on is a person retiring. STAY FOCUSED
Guys, how do you expect to keep people in servitude if you can't tell them they have a choice between crippling debt and lifelong poverty-level wages when their brains aren't done forming? We are really living in morally bankrupt society where people look at the situation and see nothing wrong. Of course, look at who is president.
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