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Re:California bans ITT tech from accepting new students by djsumdog on Tuesday August 30, 2016 @01:47AM (#12387796)
> Student can default

Um no. They can't. That's the problem with American student loans. It's the only contract you can enter into under 18 and you can never declare bankruptcy on them. It's the most bullshit type of loan there is.

In grad school I put part of my car on Student Loans because it was 0%. My car load was 5.2%. After I graduated, my student loans shot up to 6.8%! I quickly dumped all my savings onto them and squashed them in three months. Even if I hadn't been able to to that, I probably had the credit to get a cash loan for under that and pay them off. Most students don't have that option.

Re:California bans ITT tech from accepting new students by culturestate on Tuesday August 30, 2016 @02:52AM (#12388027)
By "default," GP means simply not paying - not bankruptcy. If someone can't afford to pay their student loans, they probably don't have assets in excess of their debt anyway.
Re:California bans ITT tech from accepting new students by coredog64 on Tuesday August 30, 2016 @09:46AM (#12390019)
I'm not going to claim it is an epidemic, but I know a few people in this boat. Generally speaking they are able to get by with a few life hacks: Cohabitate rather than marry, work jobs under the table, and/or be the stay-at-home parent.
Re:California bans ITT tech from accepting new students by ensignavenger on Tuesday August 30, 2016 @09:59AM (#12390155)
Why would they allow their student loans to default in such a situation instead of enrolling in an income based repayment plan? If they have 0 income, they would have a payment of 0 dollars, still get their tax refund, and have their loans forgiven after a some time on the plan.
Re:California bans ITT tech from accepting new students by kaitai on Tuesday August 30, 2016 @10:36AM (#12390530)
Not all federal loans allow income-based repayment. For instance, parent PLUS loans aren't eligible, nor are other loans made to or through parents. Moreover, there are tons & tons of private loans (often with high interest rates) pushed at these places, and none of those need to offer income-based repayment.
Re:California bans ITT tech from accepting new students by ensignavenger on Tuesday August 30, 2016 @11:16AM (#12390893)
PLUS loans are to the parents though, not the students- do they even count as "student" loans? They are more "parent" loans.
Re:California bans ITT tech from accepting new students by dragonwriter on Tuesday August 30, 2016 @12:30PM (#12391566)
> It's the only contract you can enter into under 18 and you can never declare bankruptcy on them.

Please stop repeating this myth. It is, in fact, possible to discharge student loans in bankruptcy. (It is particularly difficult to do so compared to other forms of debt, but there is an enormous difference between that and "you can never declare bankruptcy on them.")

See, e.g., http://www.studentloanborrowerassistance.org/bankruptcy/

Re:California bans ITT tech from accepting new students by st3v3r on Tuesday August 30, 2016 @01:43PM (#12392189)
Technically it's true. But reality says that it's highly unlikely, and so it's just as good to say that you can't declare bankruptcy on them. The odds that you will be able to discharge them are incredibly low.
Re:California bans ITT tech from accepting new students by forgetsusername on Tuesday August 30, 2016 @09:19AM (#12389744)
>It's the only contract you can enter into under 18 and you can never declare bankruptcy on them. It's the most bullshit type of loan there is.

Students are offering up zero collateral and usually have minimal credit history for a loan in the tens of thousands of dollars. For better or worse, if students could default on their student loans, fewer banks could/would make those loans.

Re:California bans ITT tech from accepting new students by ensignavenger on Tuesday August 30, 2016 @09:57AM (#12390138)
On the other side of it, they are the only loans I know of that offer income based repayment, and complete loan forgiveness after a certain amount of time while on such income based repayment plan.
Re:California bans ITT tech from accepting new students by brianwawok on Tuesday August 30, 2016 @08:02AM (#12389223)
Technically illegal to use school loans for things like cars or houses.
Re:California bans ITT tech from accepting new students by ensignavenger on Tuesday August 30, 2016 @09:55AM (#12390109)
From the way I understand it, you can use student loans for any expense related to going to school, including living expenses.
Re:California bans ITT tech from accepting new students by brianwawok on Tuesday August 30, 2016 @11:35AM (#12391065)
https://www.edvisors.com/ask/faq/use-stafford-for/

Highlights include

> Transportation (cost of travel to/from school, but not for purchase of a vehicle)

> Room and board costs can include one of four allowances, depending on where you live:

> On-campus in housing that is owned or operated by the college > At home with parents (only applies to students without dependents) > In housing on a military base or for which a basic housing allowance (BAH) is provided (allowance restricted to board; room is excluded because it is already paid for) > Off-campus

No "Durable" goods like houses or cars may be bought with student loan money in the US.

Re:California bans ITT tech from accepting new students by ensignavenger on Tuesday August 30, 2016 @12:33PM (#12391582)
That is very interesting, in many years of dealing with student loans for myself and my wife, I have never heard sucha thing! For example, the Department of Education publications usually say somthing like:

"You may use the money you receive only to pay for education expenses at the school that awarded your loan. Education expenses include such school charges as tuition, room and board, fees, books, supplies, equipment, dependent child care expenses, transportation, and rental or purchase of a personal computer"

(see https://studentaid.ed.gov/sa/sites/default/files/your-federa...)

It would be interesting to find an official statement on this... I couldn't find anything on the Dept. of Ed website and my search for the actual laws didn't turn up anything...

Re:California bans ITT tech from accepting new students by brianwawok on Tuesday August 30, 2016 @01:08PM (#12391891)
Transportation means buss fairs not cars.

I was given paperwork when I got my undergrad student loans, and it was very clearly spelled out.

If the loans are private, I am not 100% if all of the same rules apply.

Re:California bans ITT tech from accepting new students by ensignavenger on Tuesday August 30, 2016 @01:49PM (#12392239)
Not everyone lives in areas served by a bus system... none of the paperwork I have ever seen has spelled out any of this like that... it may depend on the school you are attending. I don't know, I haven't found the law or any official statement by the Dept of Ed. on it.
Re:California bans ITT tech from accepting new students by brianwawok on Tuesday August 30, 2016 @03:39PM (#12393212)
> Not everyone lives in areas served by a bus system..

Totally not related to the discussion. The rule does not say "If you live in a place served by busses, you cannot buy a car with student loan money"

Re:California bans ITT tech from accepting new students by ensignavenger on Tuesday August 30, 2016 @03:58PM (#12393359)
My point is I'm not sure it is actually a rule- I can't find anything official that says that it is a rule. If it is a rule, it is a stupid one- but that is indeed a different discussion.
Re:California bans ITT tech from accepting new students by brianwawok on Tuesday August 30, 2016 @06:30PM (#12394490)
I agree with the rule. It's meant to discourage people from buying massive expenses with a loan that cant be discharged with bankruptcy.