Student Loan - Loans and Debt Consolidation

LETTERS BOTH PARTIES MUST BEAR STUDENT LOAN RISKS

Letters: Both parties must bear student loan risks

It seems we have not learned anything from the 2008 financial meltdown. We still protect private lenders who make poor business decisions from themselves at the expense of the consumer. It is difficult to understand what rational reason exists for treating private and federal student loans the same for purposes of bankruptcy Few options available to help pay off private student loans.

By Robert Deutsch, USA TODAY

Jessica Fernandez, struggling to pay off her private student loans, was laid off from her full-time job two years ago.

By Robert Deutsch, USA TODAY

Jessica Fernandez, struggling to pay off her private student loans, was laid off from her full-time job two years ago.

As a matter of public policy, federal loans are made available to all students, regardless of their credit worthiness, to make obtaining a college degree possible. In many cases, this policy results in a federal loan being given to a student who would not otherwise qualify for a private loan. In exchange for receiving the federal loan, the student understands that the loan is not dischargeable in bankruptcy.

Private lenders, on the other hand, can and do limit who they give a loan to and take into account the students ability to repay. Because private lenders are able to choose who they give a loan to, they should not be protected if the loan is subsequently discharged in bankruptcy. Treating private and federa...[more]