Monday, September 24, 2007

Sallie Mae Supports Bankruptcy Protection for Private Loans

So they say...
Chronicle of Higher Ed:

a Sallie Mae spokeswoman, Martha Holler, suggested a willingness to consider Mr. Durbin's plan.

"We agree that it may be appropriate to revisit how to handle private student loans in bankruptcy," Ms. Holler said in a statement, "and we would be happy to participate in finding a solution that provides relief to borrowers who act in good faith but still find themselves in difficult financial situations."

Time Magazine:
Conwey Casillas, Sallie Mae's director of public affairs, acknowledges that the previous bankruptcy law, which allowed students to discharge their loans after seven years of active re-payment, might be more appropriate, adding that the company would support revisiting bankruptcy laws for students who act in good faith but still struggle to pay off their debt.

6 comments:

Anonymous said...

Anya, is sounds as if you support giving an individual with tens of thousands of dollars in student loans and a degree from, say, Princeton the right to declare bankruptcy the minute they hit the bars on Nassau Street after graduating.

That's what used to happen. People walked away from their obligations, sticking taxpayers with the bill.

Traciatim said...

I agree with Anonymous.

Anonymous said...

There actually isn't any evidence to support these claims. Tracing it back, it seems that this was a false statement made by the student loan companies in order to pass the highly restrictive laws that are on the books today.

From what we can tell, there was not a higher incidence of bankruptcy amongst doctors and lawyers (or Princeton grads) than there was for normal folk.

Actually, as far as we've been able to try to verify the "doctors and lawyers just ran out and filed bankruptcy" claims, it seems that those with "good" degrees tended to 1) not have to take out loans in the first place, getting their education by either scholarship or parental funding, and 2) pay off any loans that they did get fairly quickly because of their ability to get good jobs.

It sounds like a great argument. It certainly did to Congress. But most people with student loan debt AREN'T Princeton grads, or doctors, or lawyers, and most people with student loan debt are finding their collars a little tight these days.

List Owner, groups.yahoo.com/group/studentloanjustice

sarah said...

"We agree that it may be appropriate to revisit how to handle private student loans in bankruptcy," Ms. Holler said in a statement, "and we would be happy to participate in finding a solution that provides relief to borrowers who act in good faith but still find themselves in difficult financial situations." It is a nice and innovative blog.

__________________________________________
sarah

http://www.shepelskylaw.com

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