Grieving parents taking on student loan debt

[Apple Of Sodom]

So why did the bank make me provide documentation of assets and income before they would give me a mortgage loan?

Differet types of loans and the bank gets to decide who they loan to. If they want to require proof, let them. If they don't then let them. It is up to the person giving you what you want. The bank asked for proof of assets and income, but didn't ask if you spend all your money on hookers and blow, nor did they ask if you were sure you wanted to spend all that money on a house when an apartment would do.

I've had several different types of loans. I've had to wait months and jump through dozens of hoops for an SBA loan to go through on a business, I've had to wait days for a loan to go through on a different business (not SBA) and sealed it with nothing more than an ID and a signature (the bank knew who I was) and I've waited minutes for a car loan to go through. Different assets, different ways to reclaim expense, different risk categories.

At the end of the day it is not the lender's responsibility to make sure you only take out what you can afford in the same way it is not for the grocery store to ensure you only buy what you can eat.

Banks SHOULD make sure that they are lending to qualified people, but with a student loan how do you ensure that? There is no tangible asset. So let them loan and the students taking out the loan need to make sure they can afford it. Surely a 27 year old woman knows how a percentage rate works.

 

[highland145]

Question: why is it the lender's responsibility to ensure people are only taking out what they need? Their terms and conditions are plain as day; laws require them to be. I think it lies with the person borrowing. You are buying a service. This is a buyer beware society.

If I'm guaranteed (Uncle Sam) to get paid then I, as a greedy SOB, don't care. Otherwise, ability and willingness to repay. Advanced basket weaving degree=No loan. I'd like my $$ + interest back.

 

[jhbball]

Whatever makes you feel most comfortable.

Or you could just quit making wild assumptions about people altogether. My income level really has nothing to do with someone whining about cosigning for a loan and not wanting to pay it back.

You're right. It has everything to do with creating this thread to begin with.

 

[Londo_Jowo]

Protip:

Get life insurance on your kids sufficient to cover outstanding student debts you're a cosignatory on. Given they're young the insurance should be very cheap.

Hell, if I ran a company in that field I'd bundle the loan and the insurance.

This is all good however, no insurance will pay out for suicide or drug overdose/abuse deaths including organ failure due to drug abuse. Even had the person in the OP had insurance the fact the woman died from liver failure due to the abuse of opioid drugs.

 

[highland145]

Are you in the U.S.?

Why do you hate America and Americans so much?

You will be too if you get to start footing the bill for student loan bailouts, right?

 

[Apple Of Sodom]

Are you in the U.S.?

Why do you hate America and Americans so much?

Yes, I do live in the U.S. Why do you find it necessary to attack people instead of bring up valid arguments?

And I am starting to hate Americans for the reason the rest of the world does. Collectively we are ignorant, overweight whiners. Am I right, Dave? Does that about sum it up?

Maybe this pastor should have prayed before signing the loan to see if it was a good idea.

 

[Apple Of Sodom]

This is all good however, no insurance will pay out for suicide or drug overdose/abuse deaths including organ failure due to drug abuse. Even had the person in the OP had insurance the fact the woman died from liver failure due to the abuse of opioid drugs.

Not true. My insurance covers suicide but I had to have held the policy for more than 2 years before it will pay out on it.

 

[Mai72]

I don't believe that for a second. If you are smart enough to get into college (which sometimes just takes jumping through hoops) then you are smart enough to know what a loan payment is. I think we claim they are ignorant because we don't want to face the truth, which is they are apathetic and think if they get in trouble they will get bailed out.

That's true. I met guy who owes over $100k in student loan debt but refuses to pay. He told me that America will take care of his loans. He then went back to gaming on his smartphone.

Ha.

 

[Apple Of Sodom]

That's true. I met guy who owes over $100k in student loan debt but refuses to pay. He told me that America will take care of his loans. He then went back to gaming on his smartphone.

Ha.

Sad thing is that he is correct. We don't have debtors prison. What is the worst that will happen to him? He gets wages garnished? He gets phone calls? And I don't necessarily blame that one guy. When everyone is doing it then we are fools for not expecting that type of behavior.

 

[nehalem256]

Banks SHOULD make sure that they are lending to qualified people, but with a student loan how do you ensure that? There is no tangible asset. So let them loan and the students taking out the loan need to make sure they can afford it.

Well I would question loaning $100K to a woman for a nursing degree.

Surely a 27 year old woman knows how a percentage rate works.

Well even though she studied nursing she apparently didnt understand how not to overdose on drugs. So I wouldn't want to bet on her understanding financial matters if it was me.

 

[Apple Of Sodom]

Well I would question loaning $100K to a woman for a nursing degree.



Well even though she studied nursing she apparently didnt understand how not to overdose on drugs. So I wouldn't want to bet on her understanding financial matters if it was me.

How does the lender know how she is using the money? Maybe she told them she was going for her MD.

 

[zinfamous]

If you can afford cell phones and flat screen tvs, you are not poor.

why? It's not 1991 anymore.

cell phones and plans have many incredibly cheap options.

"Flat screens" can be purchased for as low as 100 bucks.

 

[nehalem256]

How does the lender know how she is using the money? Maybe she told them she was going for her MD.

Documentation. For example I imagine she could provide evidence of admittance to a medical school if she was going for her MD.

 

[waggy]

Question: why is it the lender's responsibility to ensure people are only taking out what they need? Their terms and conditions are plain as day; laws require them to be. I think it lies with the person borrowing. You are buying a service. This is a buyer beware society.

When the lender also owns the schools and has complete control of ever aspect of the situation (in most cases) they need to have responsibility to them.

The feds should not be lending to kids for idiotic degrees (sorry women's studies and such). then letting the kids go to school for such shit on loans. then the feds make a killing on interest.

 

[soulcougher73]

I saw an EBT sign on Jack in the box... not sure why we allow that.

I think those in need of food should have it provided by the government. Instead of letting them buy whatever junk they want at the store they go down weekly and get their protein, fruits and veggies. Everyone gets the same nutritious stuff each week. If you want a cheeseburger then use your own money. Otherwise you get a box with shit to cook.

ive been saying this for years. :thumbsup:

 

[werepossum]

Depends on the investor and issuer. National Collegiate was owned by First Marblehead. They were/are notorious for Direct To Consumer loans, no school verification of need. They also ran a guarantee fund, TERI, to "insure" the loans. However, TERI is insolvent and FMD was pretty much bankrupt and isn't generating new loans. Why? Because they had low-co-signers and high DTC loans. Some of the investors at the AAA level of NCSLT deals are going to take losses, mainly because they were crap.

I've seen several First Marblehead execs floating round, guys who ran their risk departments. I won't approve a single deal if I see an exec from there in that capacity. Others don't care.

Lenders have just as much responsibility to lend responsibly as borrowers have to borrow responsibly.

Agreed - this is exactly what happens when such programs aren't managed correctly, which was my point. The money is no longer available for the next batch of students.

Not going to bother reading the 6 pages of BS this thread has become. IMO, this thread should have died when on the first page with this post:



/end of thread plain and simple.

Oh and this was hilarious

I largely agree, but Legendkiller makes a good point that the lenders are not wholly blameless either. Takes two to tango, and if lenders are lending irresponsibly then they are due less sympathy and (in my opinion) less legal protection.

Are you in the U.S.?

Why do you hate America and Americans so much?

Dude, the lenders are also Americans.

 

[Pulsar]

That's not feasible. If you do that, then no institution is going to lend vast amounts of money to students with very little in assets and few (if any) guarantees of actually getting that money back. Not to mention, how would you stop a student, having just graduated and not yet having any real assets and no real job (yet) from simply discharging their student loan debt in bankruptcy? Every student would be smart to do that -- rack up $150k in student loans, get a good education, discharge in bankruptcy, wait 5-7 years and voila, you have good credit again and no debt and an education.

You've got the chicken and egg thing wrong.

Universities need money from students. If student debt was treated the same as other debt then the loans would stop. And then, if these Universities wanted to stay in business, they would figure out how to educate kids for less than $100,000.

As long as we continue to allow artificial debt, the cost of the schooling will continue to go through the roof.

 

[networkman]

Myth: By cosigning a loan, I am helping a friend or relative.
Truth: Be ready to repay the loan.

According to Proverbs 17:18, "It's stupid to guarantee someone else's loan" (CEV)

http://www.daveramsey.com/article/the-truth-about-debt-and-relationships/lifeandmoney_debt/

 

[LegendKiller]

Question: why is it the lender's responsibility to ensure people are only taking out what they need? Their terms and conditions are plain as day; laws require them to be. I think it lies with the person borrowing. You are buying a service. This is a buyer beware society.

I perform a lending function in my job. In that I take full responsibility for underwriting, understanding, approving, and surveilling a large portfolio of loans. I don't say "well, crap, it's their fault for issuing the debt" or "those auto borrowers were at fault". No, I take responsibility.

This is the same with any loan officer at a bank, you underwrite the credit and take responsibility if it defaults. That's what I mean about symmetrical lending relationships, each party knows what they are getting into, each one does their due diligence, each one understands the risks and takes those risks for a certain interest rate.

However, in this case, the government, or private loan lenders, take only payment risk, not credit risk, so they don't bother underwriting. They know they have a debt slave for life, so why bother underwriting somebody who has 3 kids and takes out way more loans than she needs to cover tuition? Why bother underwriting a Philosophy major going to a $50k/yr school and taking out $40k/yr in student loans. It's just somebody else's money anyway, right?

 

[LegendKiller]

Differet types of loans and the bank gets to decide who they loan to. If they want to require proof, let them. If they don't then let them. It is up to the person giving you what you want. The bank asked for proof of assets and income, but didn't ask if you spend all your money on hookers and blow, nor did they ask if you were sure you wanted to spend all that money on a house when an apartment would do.

I've had several different types of loans. I've had to wait months and jump through dozens of hoops for an SBA loan to go through on a business, I've had to wait days for a loan to go through on a different business (not SBA) and sealed it with nothing more than an ID and a signature (the bank knew who I was) and I've waited minutes for a car loan to go through. Different assets, different ways to reclaim expense, different risk categories.

At the end of the day it is not the lender's responsibility to make sure you only take out what you can afford in the same way it is not for the grocery store to ensure you only buy what you can eat.

Banks SHOULD make sure that they are lending to qualified people, but with a student loan how do you ensure that? There is no tangible asset. So let them loan and the students taking out the loan need to make sure they can afford it. Surely a 27 year old woman knows how a percentage rate works.

It's pretty easy to underwrite to the major, the school, the cumulative debt...etc.

 

[dmcowen674]

Originally Posted by dmcowen674
Are you in the U.S.?

Why do you hate America and Americans so much?

Yes, I do live in the U.S.

And I am starting to hate Americans

At least you are an honest hater.

Why do you stay here?

You are free to leave this country and people you hate.

 

[Victorian Gray]

Someone with 3 children. Who apparently don't have fathers.

So we have the return of THREE Christs?!!!!

The Rapture is coming!!!!!

 

[Matt1970]

Because I am not in that business.

Nor will I dictate how anyone runs their business. Neither will I instruct anyone how to deal with the loss of their family.

Bottom line; none of this is your problem.

But, you feel it is necessary to pick this story and rage over it, because hur dur dur.

Turn it off, no one wants to hear a defective alarm.

You have added nothing except your poignant gruntings. Do you think you are clever?

Sprinkle in the occasional racism and that's Newell Steamer.

 

[Jaepheth]

This is all good however, no insurance will pay out for suicide or drug overdose/abuse deaths including organ failure due to drug abuse. Even had the person in the OP had insurance the fact the woman died from liver failure due to the abuse of opioid drugs.

Touche.
The OP's linked article didn't mention it was due to drug OD (that I saw).

On a side note, I agree we should have a federal minimum standard for usury laws. Lenders/creditors should not be able to create wage slaves by charging more interest than a person can pay for the rest of their lives. (Especially in the case of emergency medical care where the debtor effectively had no choice in the matter)

In this particular case, I'd say it'd be nice of the company to charge a minimal interest that accounts for inflation and a modest late fee to incentivize timely payment, but I recognize that they have no legal responsibility to do so.
In the end, he did agree to those terms.

But that's like, my opinion, man.

 

[Zaap]

I sympathize with the family, losing a daughter so young, and then getting saddled with huge debt that can't be discharged..... When you co-sign for a loan, you have to always remember that things can happen that will make you responsible for repayment of that loan. If you're not comfortable with that possibility, then you shouldn't co-sign for the loan. In this particular situation, a life insurance policy for the balance of the student loan would have been a very prudent idea.

This.