I'd love to see numbers on how many are actually discharged. My understanding is this is almost as akin to saying that the lottery does, in fact, pay out.
There's more paths to discharging than bankruptcy.
Somebody I know had a medical emergency while in their repayment period. They were unable to work and went on to disability insurance, and eventually had their loans forgiven. I think they had to be on disability for a certain period of time (measured in years, iirc) before they were discharged.
Eventually, they recovered sufficiently to be able to return to the work force debt-free. I'm not sure if the hurdle for loan forgiveness ought to be "you have to basically die", but it's at least that high for now.
There's also the well-known "public servant" path. I'm sure there's some ironic joke to be made comparing the two.
I totally agree, I think most level-headed people do.
It's a tricky problem. We want people to have equal opportunity to pursue college, even if their parents can't afford it. But at the same time, we don't want to subsidize cost creep.
Clearly the current solution doesn't work. Alas, we're deeply invested in it (literally), and each passing year the entanglement grows.
I think you can make a strong case for govt-funded tuition at public universities. But I don't know how to get to there from here without making a handful of people very unhappy.
> I think they had to be on disability for a certain period of time (measured in years, iirc) before they were discharged.
In other words, basically borderline poverty for years before people realized it was never going to happen, and got lucky enough to get out of disability -- cuz a lot of people don't.
I don't have numbers but I've read enough stories about it that I think it's far more likely than winning the lottery.
The bigger problem is that people _think_ it won't work and they don't bother trying. How many folks could have met the hardship burden but didn't apply?
We need to stop repeating the falsehood and instead be truthful: Student loans CAN be discharged via bankruptcy, if the applicant meets a hardship threshold.
To be fair, I was unfair to compare it to the lottery. That is clearly not paying out often. Such that, if you are comparing to that, you had best be favorable.
I'm assuming it pays out at 100x lottery numbers. But, again, that is still basically zero. Is why I don't regularly buy 100 lottery tickets.
Do we have any numbers for how many applicants get their debt forgiven? The requirements seem pretty wishy-washy and easy for courts to just deny out of hand if they want. And while that could go both ways for someone, Americans in general are pretty obsessed with people paying debts in full regardless of how fair or not or manipulative or scammy the deal originally was or the circumstances that brought it about.
Every other debt having your bankruptcy approved is proof enough that you were under undue hardship and couldn't crawl your way back out. But student loans are special and need further proof, which means they are definitely not that easy to get out from.
My mom’s “City College” MBA student loans were somehow discharged when she went on medical disability. It is totally possible, but she was really not in a good spot after 50 health wise.
- https://studentaid.gov/manage-loans/forgiveness-cancellation...
- https://www.consumerfinance.gov/about-us/blog/busting-myths-...