Today, all across the US people will be grilling slabs of meat and drinking beer and watching fireworks, in celebration of our nation’s Independence. If you have been scammed by the higher education system into taking out government subsidized student loans, it is worth reflecting, how free are you? By exempting student loans from discharge in bankruptcy, the federal government has created a generation of indentured servants, their futures forever mortgaged for a worthless education they can never repay.
This post, at XelanBonn.com does an excellent job of stating the case:
By Xelan Bonn (June X, 2010) http://www.xelanbonn.com
You thought you were doing the right thing when you signed up for college and took on student loans. The thinking was, you would get a higher paying job and thus be able to pay your student loans easily. What you did not know is that you just signed up for a modern day debtor’s prison.
When a person runs into financial problems, they used to have a chance at redemption–a way to clear off their debts and thus be given a chance to become a productive member of society again.
The government devised the bankruptcy tool for America because under the Constitution, debtor’s prisons are outlawed. Yet the federal government has found a modern way to circumvent the law.
Private loans and other private debts are generally dischargable in bankruptcy. However, student loans cannot be discharged (as a practical matter). Both private and federal student loans are protected from being discharged, thus bankruptcy no longer offers equal treatment to all debtors and often has little or no effect of assistance to those with student loans.
Like the IRS, the federal government refuses to take its lumps like everyone else when it comes to bankruptcy and aspects such as taxes or student loans. The effect is, take out a student loan through the federal government, and the debt and its interest and/or penalities, like taxes owed, never go away until repaid in full.
Therefore, bankruptcy is near meaningless for students who typically find themselves forced into a modern-day version of debtor’s prison.
The student who defaults thus becomes a burden on society for decades, often through no fault of their own.
Their credit rating is permanently damaged, their opportunities reduced to near nill, their income highly limited–the effect is virtually permanent economic debtor’s prison from which there is no escape–and all because they took the gamble to try and improve their lives by getting a higher education.
Without the escape bankruptcy provides, students who default or otherwise are unable to repay their student loans, are thus omitted from becoming productive members of society or the real ability to secure self-redemption. Instead, they become permanent slaves to the federal government and credit bureaus that label them “unfit for society” by applying highly discriminatory “point system” rating practices that employers, landlords, and others use to apply against them—employment and housing opportunities are just two aspects of many where their lives are often ruined.
Making matters worse, private educational lenders have essentially the same rights as Uncle Sam—such private student loans never go away until paid. Bank of America, Chase, Sallie Mae, and many more student loan lenders or administrators have the very same indentured servant clause attached to their loans as the federal government—bankruptcy discharge is all but forbidden except in the rarest of cases.
Please read the whole thing. And realize that the fight against the law school scam has ramifications beyond just throwing a wrench in the plans of cocky 0L’s- if we can dissuade people from taking on excessive student loan debt for worthless degrees, we truly are saving them from a future of sadness and despair. The promise of America means little to those that are struggling to gain their independence from debt.