Colleges at the breaking point, forcing ‘hard choices’ about education

Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by jefftk on Thursday April 30, 2020 @05:00PM (#23036063)

The bank doesn't want the bet because "bankruptcy" means very different things to the bank and to the student. To the bank it means they lose all their money. For a just-graduated person with minimal assets it's not that bad -- sure you can't get a mortgage to buy a house for a while, but you probably couldn't have afforded that anyway with student loans. You still have the degree, they can't take that (well, https://www.jefftk.com/p/repossessing-degrees).

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by zhynn on Thursday April 30, 2020 @06:10PM (#23036809)

I would not underestimate the impact bankruptcy plays in someone's life. You would be getting a bankruptcy on your record in the prime of your life (mid-twenties), making it very very difficult to borrow for the next 10 years. You end up starting building credit in your mid to late thirties, and maybe you are able to participate in the modern economy in your forties. It sucks. I lived it.

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by Spivak on Thursday April 30, 2020 @06:39PM (#23037066)

However, in a world in which it is common for college students to declare bankruptcy immediately after graduating, financial institutions might take advantage of that information and realize that their creditworthiness is much higher than the bankruptcy would predict. Kind of like how the stock price many companies go up after they cut retirement benefits.

This of course will be to the spiral and collapse of the college loan system.

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by imtringued on Friday May 01, 2020 @07:52AM (#23041123)

How high is the creditworthyness of someone who is on a repayment plan to service another debt? It is practically zero. Declaring bankruptcy just limits the duration of the mortgage to 7 years. You still have to pay as much back as you can unless you are literally an unemployed hobo on the street for 7 years.

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by jefftk on Thursday April 30, 2020 @06:15PM (#23036858)

I'm talking about declaring bankruptcy immediately on graduating, at age 21 (not mid-twenties), and it's off your record seven (not ten) years later, at 28.

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by iateanapple on Thursday April 30, 2020 @06:09PM (#23036801)

> For a just-graduated person with minimal assets it's not that bad

It is in fact bad.

You can’t just declare bankruptcy and get a high paying job a year later and have no student debt....

When I looked into personal bankruptcy I was told by my lawyer that it would only make financial sense if there was no way I could pay back the amount owed in the next 7-10 years.

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by WalterBright on Thursday April 30, 2020 @06:25PM (#23036955)

Having a bankruptcy on your record may make it difficult to get that high-paying job, as employers may not look favorably upon it.

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by wolfgke on Thursday April 30, 2020 @06:40PM (#23037070)

> Having a bankruptcy on your record may make it difficult to get that high-paying job, as employers may not look favorably upon it.

Why? I rather consider this as a sign that the person will be rather loyal as employee because he needs the money ...

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by WalterBright on Thursday April 30, 2020 @07:07PM (#23037320)

Making a deal and then breaking it can dissuade employers from putting a person in a high trust position. Most business operates on trust, handshakes, and one's word. Contracts are a backup.

Trust is like glass - easy to break, very hard to put back together.

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by ulucs on Thursday April 30, 2020 @08:10PM (#23037768)

Do Americans really check prospective employees' credit scores? Wow.

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Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by jandrese on Thursday April 30, 2020 @08:40PM (#23037980)

Yes. It's the first thing HR runs on every new applicant. Bad credit == danger of mismanaging company money.

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