I have to imagine that the number of people who have paid that many payments has dropped precipitously in the last decade.
Ridin' with Biden
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I have to imagine that the number of people who have paid that many payments has dropped precipitously in the last decade.
Fuckin' Gerald Ford.
1976, I can't remember the name of the bill that Biden, along with a number of others voted for and Ford signed which excluded student loans from bankruptcy.
His argument was the Republicans had the votes and he got some concessions, which is politics. The past is a foreign country of course.
You could discharge student loan debt in bankruptcy until 2005.Biden was the leading democrat supporter to putting an end to that.
https://www.theguardian.com/us-news/2019/dec/02/joe-biden-student-loan-debt-2005-act-2020
In ten weeks “Joe’s vision for America” at the feet of Iowa’s caucus-goers in the hope that the first voters in the Democratic presidential race will put him on the road to the White House.
Among his promises is that he will fix the student loan crisis saddling 45 million Americans with crippling debt now totalling a staggering $1.5tn. One idea is to allow people struggling to repay private student loans owed to banks and credit card companies to discharge them in bankruptcy.
The pledge is one of the most striking policies on offer from Democratic candidates in the 2020 race, given how the problem Biden now proposes to resolve came about in the first place. Private student loans were largely stripped of bankruptcy protections in 2005 in a congressional move that had the devastating impact of tripling such debt over a decade and locking in millions of Americans to years of grueling repayments.
The Republican-led bill tightened the bankruptcy code, unleashing a huge giveaway to lenders at the expense of indebted student borrowers. At the time it faced vociferous opposition from 25 Democrats in the US Senate.
But it passed anyway, with 18 Democratic senators breaking ranks and casting their vote in favor of the bill. Of those 18, one politician stood out as an especially enthusiastic champion of the credit companies who, as it happens, had given him hundreds of thousands of dollars in campaign contributions – Joe Biden.
Until 2005, private student loans were eligible for bankruptcy protections just like other forms of private credit. But in that year Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, a law that made it vastly more difficult for struggling former students to rebuild their lives by discharging the debts and starting over.
Earlier this year, Biden tried to justify his backing of the 2005 act. His campaign spokesman told Politico that “knowing that the bill was likely to make it through the Republican-led Congress, he worked to moderate the bankruptcy bill and protect middle class families. He believed that if you have income and consumer debts you can pay, you should agree to a repayment plan that you can afford.”
Despite his protestations, it is indisputable that Biden was an avid supporter of the 2005 bill as a whole and of its overall thrust of tightening up the bankruptcy code largely to the benefit of lenders at the expense of distressed families who would find it harder to file for bankruptcy.
“Biden was one of the most powerful people who could have said no, who could have changed this. Instead he used his leadership role to limit the ability of other Democrats who had concerns and who wanted the bill softened,” said Melissa Jacoby, a law professor at the University of North Carolina at Chapel Hill specialising in bankruptcy.
Other leading Democrats and consumer advocates did say no. In the Senate debate on the 2005 bill, Ted Kennedy was scathing about its implications.
“This legislation breaks the bond that unites America, it sacrifices Americans to the rampant greed of the credit card industry,” he said. Kennedy warned that even before the new provision kicked in young people were dropping out of college “because of the costs of student loans – they can’t pay them”.
Warren warned of bill’s impact on women
When an earlier version of the bill was in front of Congress, a respected law professor at Harvard law school was so incensed by its terms that in 2002 she wrote an entire paper decrying Biden’s forceful support of it. The author – Elizabeth Warren – said the changes would be to the detriment of one group above all others: women.
“Senator Biden supports legislation that will fall hardest on women,” she wrote. “Why? The answer will have to come from him … He is a zealous advocate on behalf of one of his biggest contributors – the financial services
Warren, whose decision to enter politics was inspired in no small part by her experiences of fighting Congress over bankruptcy laws, goes on to note in her essay that Biden’s “energetic work on behalf of the credit card companies has earned him the affection of the banking industry and protected him from any well-funded challengers for his Senate seat”.
Warren’s suspicion that Biden’s enthusiasm for toughening bankruptcy laws came from his close ties to the credit card companies persists to this day. Professor Jacoby said: “I don’t know how else to explain his stance on bankruptcy policy for financially distressed families other than his relationship with the consumer credit industry. There really isn’t another plausible explanation.”
As a US senator from Delaware, a state that hosts many of the largest financial corporations in the country, that relationship came naturally. So friendly were his links with the Delaware-incorporated MBNA, a major credit card company since taken over by Bank of America, that back in 1999 he felt it necessary to declare: “I’m not the senator from MBNA.”
Campaign finance watchdogs underline the point. In the 2003-2008 senatorial election cycle, Biden received more than $500,000 in help from credit card companies, financial services and banks, the Open Secrets database shows.
In the lead up to the 2005 bankruptcy act, Biden tried to justify his support for the legislation by pointing to abuse of the bankruptcy system by people who should at least pay back some of their debts. By requiring better-off borrowers to repay what they could afford, private lenders would be able to reduce their interest rates to the benefit of all consumers.
Neither claim was born out by events. Later reviews found that the level of abuse in the student loan system was relatively insignificant; nor did the removal of bankruptcy protections from private student loans lower interest rates.
“The evidence is not there – making bankruptcy laws more protective of lenders did not lead to more access and cheaper credit,” Jacoby said.
What the 2005 act did do was to herald an explosion in private student loans. Lenders, confident in the knowledge that it would be much more difficult in future for debts to be discharged, opened their arms wide to new borrowers.
Today, the total of outstanding private student loans stands at $123bn. That is only about 8% of the overall $1.5tn debt mountain, but it is responsible for much of the human suffering with the average private student loan debt amounting to almost $14,000 a person.
Your GoogleFu is strong but at least I remembered 1976?
https://www.tateesq.com/learn/student-loan-bankruptcy-law-history
When Did Student Loans
Become Nondischargeable
Student loans first became nondischargeable in bankruptcy in 1976 due to an amendment in the Higher Education Act. Section 439A of this act made student loan debt non-dischargeable until five years after the start of the repayment period, except in cases of undue hardship. Over time, laws were tweaked and widened to reinforce this limitation.
Fuckin' Allen Ertel.
From my link, prior post.
Joe Biden's Dual Role in the
Student Loan Crisis
Joe Biden has affected the dynamics of student loan debt and its dischargeability, playing two distinct roles:
As a senator, Biden backed multiple pieces of legislation that unintentionally exacerbated the student loan crisis. These laws facilitated the growth of student loan borrowing, often increasing borrowers’ monthly payments and making these loans tougher to discharge in bankruptcy.
As President, Biden’s policy changes have further altered the landscape of student loan dischargeability, albeit in a different direction. While his administration has sought to alleviate the student loan crisis and lighten the burden on borrowers, the reforms implemented may have indirectly made it more difficult for some student loan borrowers to discharge federal loans in bankruptcy.
Here’s how:
Department of Justice’s Guidance on Bankruptcy for Student Loans
The Biden administration took a significant step toward easing student loan bankruptcy in November 2022.
The Department of Justice, collaborating with the U.S. Department of Education, issued new guidance designed to simplify the identification of cases warranting student loan bankruptcy.
This key initiative underscores the administration’s commitment to providing struggling student loan borrowers with a clearer path to bankruptcy.
From my link, prior post.
Joe Biden's Dual Role in the
Student Loan Crisis
Joe Biden has affected the dynamics of student loan debt and its dischargeability, playing two distinct roles:
As a senator, Biden backed multiple pieces of legislation that unintentionally exacerbated the student loan crisis. These laws facilitated the growth of student loan borrowing, often increasing borrowers’ monthly payments and making these loans tougher to discharge in bankruptcy.
As President, Biden’s policy changes have further altered the landscape of student loan dischargeability, albeit in a different direction. While his administration has sought to alleviate the student loan crisis and lighten the burden on borrowers, the reforms implemented may have indirectly made it more difficult for some student loan borrowers to discharge federal loans in bankruptcy.
Here’s how:
- The administration created the most affordable repayment plan to date, shielding even more of a borrower’s discretionary income from student loan payments. While this new student loan repayment plan provides immediate relief, it might inadvertently discourage some borrowers from seeking bankruptcy discharges.
- Biden implemented an interest waiver, effectively reducing the debt burden. While beneficial for most, it could indirectly create an environment where discharging student loans through bankruptcy becomes harder.
- All federal student loan borrowers, including those with a consolidation loan, are eligible to get retroactive credit toward income-based repayment forgiveness. This move alone has already erased $39 billion in federal student loans. Experts expect that this will ultimately lead to a $400+ billion bailout by the federal government, again potentially reducing the instances of borrowers resorting to bankruptcy.
Department of Justice’s Guidance on Bankruptcy for Student Loans
The Biden administration took a significant step toward easing student loan bankruptcy in November 2022.
The Department of Justice, collaborating with the U.S. Department of Education, issued new guidance designed to simplify the identification of cases warranting student loan bankruptcy.
This key initiative underscores the administration’s commitment to providing struggling student loan borrowers with a clearer path to bankruptcy.
The 1976 law made you wait 5 years before you could discharge in bankruptcy,but you could do it after 5 years.The 2005 law Biden championed and voted for made it virtually impossible with a few exceptions like being disabled.
Yes, I know.. I remembered it started in 1976 and Joe voted for it in the minority.
See prior post, he has been trying to fix things.
Nothing is cancelled. The banks and the colleges still got their money
Biden just changed who has to pay, Now every other citizen will pay. The one who received the service does not have to pay
Example: I hire an escort and I make you pay for her....Thats exactly what this program is
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