Student loan payments to be deducted from Social Security!

Ther Supreme Court just ruled that the goverment can seize the Social Security check of a 67-year-old disabled man to pay off his ancient student loans.

And we can't even blame those annoying conservatives (or those annoying liberals, as you wish); it was a unanimous decision.

The Bush administration said the case was especially important because there is more than $3 billion in delinquent student loans more than ten years old.

Now the Philosopher King would note that the Iraq war is costing $3,000 per second (www.costofwar.com), and so if we simply (!) put the war on hold for a million seconds, less than 12 days, we could write off the entire $3 billion, and the old guy in Seattle could buy his medicines.

Wonderful (in its own way) line in Leah Garchick's "Overheard" feature in the SF Chronicle this week: "I can't ask my parents for help with my student loan. They've just asked their parents for help with their student loans."

 

As a student, who at one time had a sizable student loan and paid it off as quickly as possible after dropping out of university to pursue a career, I expect everyone with a student loan to repay it. Thanks you this forum and distance education, after many years away from school, I have been able to resume my educational goals.

The 67-year old in the story had a lifetime to repay the loan(s).

 

I agree that people need to pay their debts. This guy should be no exception.

However, isn't disability one of the few conditions for forbearance of student loans?

Now, I wonder what effect this has if the beginning period of disability is before the initial loan date or what effect this has if the initial period is before July 2002.

It seems to me that this particular indebted student needs to speak with a financial aid expert.

 

While everyone should pay their debts, this case was a clear bad outcome.

The guy had ~1000/mo in benefits coming to him. He testified he couldn't pay his rent and his meds, if the garnishment was taken out.

In other words, there should be some sort of "reasonableness" requirement built into collection. Going after a MD who makes 300k and refuses to pay is one thing; going after a disabled guy who racked up law school loans in the 80's, became disabled before he was ever able to practice, and cannot work, is another.

It's really bizarre that virtually all other debts can be excused in bankruptcy or over time, BUT Title IV loans are virtually immune from bankruptcy discharge or dying because of the statute of limitations.

All this from a government that will hound a guy for $85/mo, but thinks nothing of lobbing million-dollar cruise missles here-and-there.

Coupled with that is the fact that higher ed costs escalated when the Title IV maximums were raised in the 90's. Naive students mortgage their futures....

Lesson learned: if you have to, finance your education via credit cards. There, the worst that can happen is 7 years bad credit versus lifetime indenture with Title IV.

 

I feel this person who owes these student loans should not have to have them. Come on, a 67 year old man and the government is going to garnish his social security to pay ancient student loans? This is down right mean. IMO, if a person can not pay his or her student loans due to disability or extreme long term poverty, then the government should accept it as a loss and move on. I know there are people that abuse the student loan system and do not want to pay them. However, these individuals are a rare minority. The government should leave this man and others in his type of situation alone.

 

Student loans

People who sign on the line that they are promising to pay back money no matter what, should pay it back no matter what. Some people in today's society bug me. I once had a baby sitter who probably spent over $100 a month on makeup alone; yet she was "short" on money to pay back her car payment. I happened to be at her house to overhear her swearing a blue streak at the creditors calling her to ask her about paying back her overdue loan payments. This is just one example; I hear people all the time blaming the banks or the government or somebody else for their own irresponsibility in paying back a loan. When they sign on the line promising to pay it back, apparently they think that means, "I will pay it back if things are going well and I feel like paying it back."

I don't know anything about the 67 year old man, but I would wonder (even if he is disabled) if he was able to buy other things (like dog food and cigarettes and maybe beer!) over the years while he did not pay his student loan. Sorry about the dog food comment but I must admit that most people that I know who can't pay their bills have plenty of pets and also smoke cigarettes. If they can afford these things, I cease to feel sorry for them.

 

bad debt

only the us government would allow loans to go unpaid for 10 years, so I wish they'd have garnished the entitlements 10 years ago, like the IRS would have. to allow the loans to remain unpaid is a shameful tax on the responsible to enrich the irresponsible. the 67 year old guy is unfortunate, but since he's 67, he's a grown up and can deal responsibly with his own problems.

 

I didn't see mention in John's post whether the gentleman was disabled shortly after graduation. Nor if the disablement was total and considered permanent. As John said, you can make a case as to whether this is the fault of the darn liberals or the darn conservatives. There have been several administrations over these years, and not all of them have focused on bombing places to heck in a hand basket.

Even so, over the past 20 years or so, it would likely be possible to make a small scratch in the level of the loan. It may have been possible to work through an organization to find a way to get some relief or forebearance. When something like this goes all the way to the Supremes, though, there has to be more behind it than what the paper reports.

As for using credit cards to fund education, bad move unless your intent is NOT to pay back your loans- and if that is your intent there is a different issue. Bankruptcy is not something you want to do fresh out of school, whether you are a fresh faced 22 year old or a gruffy, curmudgeonly old person.

If you have a $20K student loan, the payments are reasonable to help you get started, and then you can (not required) accelerate payment as you are able, and pay it off sooner than the note's time. With credit cards, there is a minimum payment. At a 12% interest, the minimum might be about $300 the first couple months. That's a hard nut for someone fresh out of school to crack.

If the person makes a flat $300/mo payment, it would take about 9 years to pay off with about $13K going to interest. If the person took the minimum payment option each and every month without fail, to the extreme (with a minimum of $20/mo when the balance dropped low enough), it would take over 50 years to pay off, with an interest cost of about $38K.

 

I think that the problem is really a bit more basic.

The student loan financed approach to higher education is founded on the erroneous notion that it is the student ALONE who profits from his education and therefore it is the student alone who should pay for it.

The error is that our society as a whole NEEDS highly educated citizens in the workforce and government if it is to function at all. EVERYONE benefits from the student's education, not just the student himself.

My favorite example is the field I know best. Law students are commonly graduating with total student loan debts exceeding $100,000. Medical students owe much more.

Yet the largest single employers of lawyers and a large employer of doctors is GOVERNMENT at various levels. So I have seen entry level salaries for local government lawyers in New Mexico go from the mid $20s to the mid $40s in the space of ten years. And NOW, it has gotten so bad that many of these positions are simply impossible to fill.

We need to return to the idea that public education is funded by the public at large for the bvenefit of the people as a whole. Require new lawyers and doctors to go into underserved areas for a few years, if you like, but the present shortsighted system of finance is destroying lives and hurting society.

 

Unfortunately, not all the loans charged to people are accurate or taken out with the student's knowledge. I run into that problem with people weekly. I feel sorry for the old people having to straighten out a mess like that.

 

I don't know anything about this 67 year-old man, but I will say that alcohol & drug dependency, and other behavior-based conditions, are considered "disabilities".

The man borrowed money that he promised to pay back. Now he's paying it back. I don't see the problem.

 

http://www.detnews.com/apps/pbcs.dll/article?AID=/20051208/SCHOOLS/512080436/1001/BIZ

 

I'm with Bear on this one... and I like nosborne48's point.

 

Brilliant post, Nosborne.

BTW, I looked at my undergrad college's website and found that tuition had increased six- or sevenfold since I attended, but room and board was almost the same. How could this be? Then it hit me: leftovers!

You gonna eat that?

Sorry. Back to topic.

 

hmm...seems simple enough to me, you don't take out a loan you can't pay back. If you don't pay your mortgage, the bank forecloses on your house. If you don't pay your car payment, your car gets repossessed. If you don't pay back your student loans, your other source of income get garnished. How is it fair to everyone else who busted their humps to pay back their student loans (including myself) to let other get off without paying theirs. While I agree the price of a college education is increasing at a faster pace than inflation, it still does not exclude anyone from accountability. If you go to college, make sure you get a degree in a field that actually (a) has openings and (b) pays you enough to justify going to school to get the degree in the first place. While their are always exeptional exceptions for reasons why people are unable to pay the loans back, the vast majority of America lives above their means driving cars they can't afford, living in houses that are too big, and racking up credit card debt they don't intend on paying back. For every one person like the man in the article there are thousands who are just irresponsible.

 

JH50,

Yes, but...

Unexpected things happen to people. Divorces or health crises.

Large debts can become literally impossible of payment. That's what bankruptcy is for; even under the Bankruptcy Reform Act, most debt can be discharged when bad things happen.

But the student loan system is pretty much bankruptcy proof. It therefore can create a kind of, if not debt servitude, then at least punitive "debt misery".

Now, child support and alimony are also bankruptcy proof but that's because the debtor's inability to pay merely transfers human misery to other people. Failure to pay student loans transfers "misery" to large financial institutions who can, and do, write off bad debts every day as a cost of doing business. We all pay a bit more to cover, that's all.

Even TAXES can be discharged.

If you have religious or moral scruples, allow me to point out to you that in Jewish law from Torah itself, ALL (unsecured) debts were AUTOMATICALLY discharged every seven years. God thinks people are more important than money, it appears.

Now, before anybody blows a gasket, let me say that I KNOW that the law of remission of debts is much more involved than I am presenting here. My point is only that people should not be enslaved by debt.

 

I cringe when I see this kind of advice. I'm sorry, but this is just narrow minded thinking.

If everyone followed this line of thinking, the world would be a very boring place. Think of it - no philosophers, musicians, artists or writers (well, at least none that were university trained)!

A person needs to find what they are passionate about in life, and then find a way to make it work for them financially. Just think of how many people are out there working in a position that has absolutely nothing to do with their major in college.



- Tom

 

Tom,

You raise a valid point. I guess it would be more accurate to say get a degree or use the college experience to help benefit you later in life. I feel the cost of the degree/experience should be taken into consideration. There shouldn't be billions of dollars in unpaid debt for anyone who wanted to "find themselves" for 4 years with no intention of paying back student loans. That's not being narrow-minded, its being practical.

 

What!!!!

In 4 years in the 80's he had $80,000 in unpaid loans and he didn't manage to get a degree!!! I only owe $29k for my MBA and my daughters undergrad over the past 5 years. Plus, he has only worked since then for a few months in 1987. Please, that guy was living it up on the borrowed money and now he doesn't want to pay it back? He has problems with heart disease and diabetes. 10 - to 1 he is obese which is what caused his the medical problems which lead to his disability. Overwheight is a lifestyle choice. Give me a break this guy's case isn't as sympathetic as it sounds....

IT IS NOT NARROW MINDED THINKING to think of how you are going to pay off your student loans!! It is called responsible thinking and those who espouse otherwise are why this country has such high loan default rates.

 

nosborne,

I can certainly understand your view.

My belief is that many people who are in bankruptcy are there due to poor planning and poor financial management which includes living above their means.

I am certainly not a cold hearted individual and there has to be a middle ground in this situation which includes holding people accountable. If not, it is unfair to all those who struggle day to day paying off various loans and debts.

I find this discussion very stimulating (don't get any funny ideas) as we all come from different backgrounds and experiences. Healthy discussion is a very good thing!