Congressman: Student Loans used to Fund For-Profit Colleges should be Dischargeable

[bobbyw24]

by Chip Parker, Jacksonville Bankruptcy Attorney · Posted in Filing for Bankruptcy,Student Loans

The desire to maximize the student loan market has frequently lead to abuse and fraud by lenders and educators. Remember back in 2007 when Sallie Mae, the nation’s largest student loan lender, was fined $2M for creating a student loan scheme involving 19 universities?


And now, with the news about astronomically high default rates in the “for-profit college” market, coupled with their sky-high tuition costs, alarming drop-out rates, poor job placement services and the many other bad practices, the time has come to discourage funding these enterprises by removing the bankruptcy discharge exception for these types of student loans.

If student loans used to fund for-profit colleges become dischargeable, the money investors put into that industry would dry up, which is a good thing.

http://www.bankruptcylawnetwork.com/...in-bankruptcy/

[AgentOrange]

I don't think that would have much effect on the predatory pricing of for-profit colleges/universities. The colleges/universities would already have their money, its the banks/loaning institutions that would be left with the debt after a prior student went bankrupt. Ideally, the government would get out of the loan business completely, but if they aren't going to, then the least they could do is set reasonable limits and refuse to give loans to students who are attending poor quality schools with bad track records.

[jkr]

please do

and do it soon