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The Consumer Financial Protection Bureau recently floated the idea of allowing private student loans to be wiped out in bankruptcy. Despite the objections of some (such as the Wall Street Journal) this is a good idea. Private student loans should be dischargeable in bankruptcy, while federal student loans should not be. To see why, it helps to take a step back and think about lending in generalContinue Reading »
On Tuesday, Sen. Dick Durbin (D-IL) held a hearing before a Senate Judiciary Committee subpanel promoting legislation that would allow financially distressed borrowers to discharge their private student loans in bankruptcy. If Durbin has any hope of getting traction on this important bill, he’s going to need the help of another powerful Illinois politician: President Obama, who has so far avoidContinue Reading »
A letter from Friday’s New York Times:
Dear Mr. Bernanke and Mr. Paulson:
My student loans are too big and it is hurting the economy. Can I have a bailout, please? I need $92,000.
If the trouble in the finance industry means there are fewer high-paying jobs available for recent college grads, there may be a bit of truth to this statement. The least the feds could do iContinue Reading »
Robert Shireman, President of The Institute for College Access and Success, is guest blogging over at New America Foundation—check out his post today on how private student loans (not the government-backed loans) can’t be eliminated in bankruptcy.
Bankruptcy allows people who have serious financial problems a chance to start over by relieving them of most of their debt and preventing creContinue Reading »