By: Darrell Castle
Should student loans keep graduates from living productive lives?
Hello I’m Darrell Castle and I’m an attorney licensed to practice law in the state of Tennessee and one of the questions that comes up in my office quite often is “what should be done about student loans? What should be done to help students and ex-students who simply cannot repay these loans? The loan payment is so high they can’t afford it or it means a lifetime of debt for them. What should be done about that, if anything, to help those people?”
Well, in my view the answer to that question is that they should be dischargeable in bankruptcy at some point. Perhaps if the person carries the loan for three years after graduation from college or five years after graduation from college, can he go free then? Is there some point in his life where he can be free from that debt so he can become a productive citizen again – a member of a productive society?
By that, I just mean – and I see it quite often in my office of practice – some people just have so much in student loan debt that they cannot go out and transact business. They can’t buy and sell. They can’t shop. They don’t pay any sales tax in their local community because all they do is repay the student loan if they can and if they cannot then they’re continuously harassed by creditors and collectors and so forth.
Quite often student loan debt is a prison for the entire family because now it’s basically impossible to go to college without student loan debt – most people know that.
Back in my day it was quite possible to go to college and even law school like I did and work part time and fully pay for it. But anymore, that’d be impossible.
Many times the parents or even the grandparents are asked to cosign these loans or otherwise the loans will not be extended so it’s a chance to have them go free as well because they want their children – their grandchildren – to get an education and there’s no other way to do it, folks. That’s what I want to emphasize, it’s virtually impossible to get an education without these debts.
Why should student loans be any different than any other debt? Because they’re guaranteed by the government? Well the government should not be in the business of guaranteeing any loans in my view, so those loans should be dischargeable in bankruptcy and our children could go free, our parents could go free, our grandparents could go free. Isn’t about time?
Well, you say “the government will fund all of those loans.” Well yes, we have about $1.1 trillion of student loans outstanding right now and 17% of those are in default so the government is already eating quite a few of them. Couldn’t we to make it official and let these people go free if they’re not in a position to repay them? That’s my view anyway.