Student loans cannot be discharged due to bankruptcy..........?

If the Bank lends you money to buy a house and you don't pay, they take the house.

If they lend you money for a car and you don't pay they repossess the car.

In both cases the loan is "secured" by the property that the bank has a lien on.

A Student loan is total unsecured. If you default it's not like they can repossess your education and sell it to someone else.

If they let people declare bankruptcy on student loans almost no one would get one, and the interest rates would be the same as a credit card!

I support no discharge in bankruptcy for Federal Student Loans (I do support those loan programs), but I do not support such protections for private loans.

Would that result in fewer private loans for education and higher interest rates for those that got them.?...Yes, it would.

People need to realize that all loans would be more plentiful and of less cost (interest) if they were protected from discharge in bankruptcy. If one sees value in bankruptcy at all.....then I do not understand how one could argue such a case.

Federal loans are not discharged because it is the taxpayer that must foot the bill for such discharges, and because if they were dischargable could not be available to all, nor would the program last very long (would end up a massive failure). We might see the benefit to our society of offering such government loans (which are actually government guaranteed loans), under the condition that they will at some point be paid back....to provide private institutions the same protections however is altogether a different thing. Such loans are generally taken out when one exceeds government loan limits....which is very unwise for people that cannot afford such schools in the first place (and is, as such, bad for the nation as a whole).

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RE Student loans cannot be discharged due to bankruptcy..........?

I've heard people say,

"If this wasn't the case.............then very few student loans would even be available.

because students are high-risk loans.

If we suddenly said "student loans can be discharged in bankruptcy".............

then student loans would barely even exist anymore.

True or False?

If true.............

explain to me why this isn't the case with people taking out loans to buy....

-a house

-a car

-a business

If you go bankrupt...........you can discharge those loans and be free of any debt.

but not the case with loans for school.

Why do we single out loans for school?

Aren't loans for homes and cars risky too?

I suppose there is one difference though: The bank can always take away your house.

where they have nothing to take away from the college-grad.

no collateral.

If we really let student loan debt be discharged........

would student loans still exist?

You can discharge student loans if you can show undue hardship, but that;s really difficult to do. Many more people would file BK if they could discharge student loans. But now the government is getting very aggressive with them and there isn't much that people can do, and I see that as a problem.

House and car loanss are different because you have to pay the loan or surrender the collateral.

It depends what country you're in and the amount of your debt and who you got your loan from.

But it is possible to get into bankruptcy and relieve yourself from student loan debt. However, bankruptcy should NEVER be seen as some sort of option. It is a shameful last resort when there is no where else to go.

I feel sorry for American youth though. I hear horror stories of young kids burdened by $100,000 debt. Ridiculous.

When I got out of the military, I attended a flight school in Deland, Florida called "Regional Airline Academy."

My loans were private, and they went bankrupt in '09...taking my loans with them.

I have to pay them back. It is not my fault they went bankrupt, but I signed the contract, therefore making an obligation to pay them back. I owe them lots of dough.

I don't deny my debts. I take responsibility for them. I did owe a little over 212,000 but now I owe them a little over 80 grand.

Filing for bankruptcy will not take away your student loans. It's mainly for credit card debt. I know this because I've been thru it... Not through bankruptcy, but I've considered it. After finding out numerous times I can't dismiss my student loans after bankruptcy, I built up an LLC to which the bank cannot take or close down...due to the LLC being a separate entity than myself. All of the LLC's assets are apart of the LLC and not my own, despite me being the only member of the LLC.

There are ways around things. You just have to research and do it yourself. There is also a way out of my debt. It's called working...

I think your question revolves more along the lines of govt. loans.. And fortunately my school loans were not govt. loans or else I couldn't have built up my LLC. I know I didn't answer your question fully, but this maybe informative for someone checking the archives in the future.

--Rob USMC

EDIT: By the way, I didn't even get past the first phase of training...and was left with nothing--- no education and extreme debt.

But whatever... No one understood my situation or didn't care, so I finally started paying back loans I never used. I see it as unfortunate and a ten year delay on my life.. But I'm not committing suicide because of it. That's not an option.

Student loans are guaranteed by the government.

The risk of loss for your deadbeat son who majored in bong hits is shifted to the taxpayer.

The creditors laugh and loan out some more without any conditions regarding the ability to repay or the job market prospects for sociology majors.

The colleges laugh and enroll and warehouse more students in intro classes with 1200 sleeping students.

Funny isn't it?

I am not answering your question, but I feel that the availability of student loans is the reason for tuition rates rising twice as fast as inflation. The colleges have no incentives to keep costs down since people can always get a loan. The problem now is that the loans are as big as mortgages.

I don't agree. Most students are as honest as anyone else in terms of repaying loans

Hope this helps

Student loans are extremely difficult to get discharged under the newer laws, but it is not impossible. So, the first statement is false. And yes, it should be difficult. Taxes also can be discharged and they are also quite difficult. Child support is also problematic.