Student Borrowers are Worthy of Help!

I want to add something to the last post entitled Student Loans and Bankruptcy: The Hard Truth. There is this stigma out there that if you mismanage your finances then you must be unworthy of help. That social stigma just isn’t fair.

Just because someone got themselves over their head in debt doesn’t necessarily make them unworthy of assistance. It certainly makes them bad at finances and quite possibly a bad risk for future financial investment, but not necessarily hopeless.

The oddity with student loans then is that the loans can be discharged under two other circumstances that I did not touch on in the last post. These circumstances include full, permanent disability and death.

Unfortunately, I have come across circumstances wherein borrowers have committed suicide to escape student loan debt. In my mind, these tragedies could have been avoided if the borrowers had been presented with other options to manage their debt.

In losing these people to suicide I can see several negative outcomes of all this. The first is obvious, the families of these poor people had to deal with the tragic nature of their deaths and the knowledge that their deaths were preventable. Second, their deaths created a situation wherein the discharge of the loans was forced. As a result, no moneys will ever be repaid and the lending institution will now lose the entire sum of each loan. Third, these people will never become taxpayers and add to the general welfare of this country. We have in effect lost the entire financial return on the educational investments made in these people. Lastly, the accomplishments of these particular human beings, given the benefit of their educations, will never be known. Who knows what accomplishments awaited each of them.

All of this is the direct result of the Draconian laws now being applied to student loans. To my knowledge all other forms of personal debt can be discharged through some form of bankruptcy. If there are bankruptcy lawyers reading this please correct me if I’m wrong on this point. My point is - where were our regulators in making sure that these people weren’t being unduly burdened by hawkish lending and repayment practices?

Aside from simply forgiving student debt there are other interesting ways to help students and graduates deal with debt. For example, borrowers that have obviously gotten in way over their heads could also be offered interest free repayment on loan amounts that are too high, for example that exceed one’s income. In this way the borrowers can pay off principal and get ahead of it and therefore still retain some hope for their own future. They can also go on to have families and become successful, contributing members of society.

If you haven't read my story so far please go back and read my first posts. I am one of these people who were sucked into the dream of an education, and who, for whatever reason soon found myself drowning in debt. When I speak about other people I am speaking for myself as well. Student loan borrowers deserve help - just like the banking industry, the auto industry, and defaulting homeowners. Unfortunately, our plight goes unheard and unseen because of the shame we are made to feel for wanting an education.

For some other insight and interesting reading please visit Studentloanjustice.org and read the selected stories they have there. This is where I unfortunately came upon stories of people committing suicide to be free of their student loans.