This gal is apparently smart enough to get a degree and a masters in business administration, but not smart enough to know that she would have to pay back all of her loans. She kept getting loan offers so she kept taking out more loans. So you see, it isn't really her fault. Dammit the system is so unfair! Although racking up $260,000 in loans might have been a tip-off...



Bankruptcy Filer Takes Student Loan Servicer To Court



PARKER, Colo. (CBS4) – The Federal Reserve estimates that student loan debt is a $1.5 trillion problem in America. This debt is sinking many families into bankruptcy, but a new interpretation of the law may be offering some relief.

Paige McDaniel decided to go back to school to get a bachelors and masters degrees in business administration. She chose the online program at Lakeland University.

“I didn’t want a publicly traded school. I wanted a school that was an actual university, and had a focus on academics,” McDaniel told CBS4.

She took out federal student loans to cover the cost of her bachelors and masters degrees in business administration.

“You’re always raised, the more education you have the better off you’re going to be,” she explained.

In addition to the federal student loans, McDaniel signed up for about $120,000 in private student loans.

“Started getting direct mail from Sallie Mae, who had my federal loans at the time, offering additional loans to help with additional expenses, so I did take out some of those loans as well,” McDaniel said.

She didn’t realize the loans were different. Federal student loans have a fixed interest rate, and manageable repayment options. Private education loans have a variable interest rate, and no repayment help.

“That one mistake is…is the biggest regret of my life, and has hurt my family, to the point where it would have been better for me not to get the degrees,” McDaniel said.

She soon found herself in over her head. The loan servicing company was billing her $1500-a-month just on the private loans. She ended up declaring Chapter 13 bankruptcy, but even that didn’t help. She paid on the loans through the proceeding, but still came out owing more than she borrowed.

“We knew the federal loans could not be dismissed, but the private loans were supposed to be,” she explained.

Traditionally, in bankruptcy court, any loan with the word “student” associated with it has not been dismissed. New York lawyer, Austin Smith, has a different take on the law.

“These loans that we’re litigating, these are just like credit card debt. It’s the exact same thing as if a bank gave a student as credit card,” Smith explained.

He argues that private loans that are not used for education expenses, should be treated like any other personal debt, and be dismissed in bankruptcy.

“We have not lost on this issue yet,” Smith told CBS4.

Navient Solutions holds McDaniel’s loans, and is one of the largest student loan servicers in the country. It’s facing several lawsuits about it’s lending practices including those filed by Attorneys General in Illinois, Washington, Pennsylvania, and California. It’s called the allegations in those cases unfounded, and in a statement to CBS4 about McDaniel’s proceeding, it said:

“It went from this is the solution, not one we wanted, but this is the solution, to we’re in worse shape than we were before,” McDaniel said.

Her payments are on hold pending a court decision, but the balance keeps ticking up. It’s at more than $260-thousand now.

“I can’t breathe when I look at it. It’s a panic. There’s no way out of this,” she said.

Colorado Congressman Jared Polis has introduced a bill designed to keep student from getting into this situation. The Know Before You Owe bill would require Universities to counsel students on the difference between federal and private loans before they sign up for them.



https://denver.cbslocal.com/20...loan-bankruptcy-law/

quote:

Originally posted by Sigmanic
Colorado Congressman Jared Polis has introduced a bill designed to keep student from getting into this situation. The Know Before You Owe bill would require Universities to counsel students on the difference between federal and private loans before they sign up for them.

What a unique idea coming from a democrat

These assholes are using student loans to fund their party twitter/snapchat luxury lifestyle.

Get the colleges to co-sign student loans.

Well, there's another Bernie Sanders voter for ya. Geesh!

Jim

Lot of truth to this old saying.




Link to original video: https://www.youtube.com/watch?v=eiRGRvE_Wqg

Aside from the deadbeat...

My take on the story was potential increased risk exposure to Navient Solutions (NAVI) if in fact a precedent was set to include private student loans in bankruptcy. I rather doubt it though. This statement, "The underlying collateral consists of loans originated under the Federal Family Education Loan Program (FFELP), which are guaranteed by the US government for a minimum of 97% of defaulted principal and accrued interest," by Moody's Investor Service would suggest NAVI's exposure is quite limited. As such, I wouldn't go out there and short this on this action.

However, the article is right in that student loan debt has now exceeded $1.5T. This is larger than credit card debt or auto loans and growing.

This ought to be monitored closely. Meaning, we shouldn't be loaning millennial deadbeats a quarter million dollars. You would think with a fresh MBA, she'd understand you have to pay loans back per the terms of the agreement. I'd say she didn't get her money's worth. Perhaps she would have rec'd better education from a for profit institution; seemingly her only criteria for choosing her school.

quote:

My take on the story was potential increased risk exposure to Navient Solutions (NAVI) if in fact a precedent was set to include private student loans in bankruptcy.

I wondered the same thing. A precedent here could be a watershed event. I agree with you and doubt it will happen.

She says that the loans were a solution to her problem of needing better employment. Well, sure, if you can afford to pay them back. Buying a new Corvette would be a solution to my desire for a fast muscle car but I bet some fucker would want me to pay for it.

If you click the link you can see the debtor and her attorney in the accompanying video. Quite the pair.

I'd be interested in the legal theory that any student loan not used for educational expenses should be treated like credit card debt. If the private loan is used for housing while a student or food or travel expenses or books or a computer it would seem to be an educational expense. The spring break trip not so much but then that's misuse of the funds. The loan wouldn't have been offered to her under what were likely fairly generous terms if she wasn't enrolled and vouched for by the university. I feel for her in that she made a series of disastrous decisions but she made them knowing exactly what she was doing. She either borrowed the money hoping she'd be able to pay it back or she committed fraud by borrowing money she had no intention of paying back. Which is it buttercup?

Back when the Occupy Wall Street was going on two guys took a camera and went to record some cruds at a park in NYC who were protesting their high student loans. They asked on young woman how much her's were, she said over 250K. They then asked her her Major, she said "Minority Womens Studies."
I think I see some of the problem.

quote:

has introduced a bill designed to keep student from getting into this situation.

"this situation" pretty much didn't exist before the government took over the student loan program.

quote:

Originally posted by Sigmanic:
but still came out owing more than she borrowed.

um yeah, it's called interest. I guess her business classed didn't teach this novel concept.

Student loans, suspect majors, and lending tactics aside... in the year of our Lord 2018, when high speed internet is everywhere... why is the cost of college increasing and not decreasing?

I get nauseous when I look at what I am likely going to be facing in college expenses for my little one... really hoping he decides to go to a trade school.

Jordan Peterson said it best when discussing student loans. Kids are mortgaging their future with the promise of a job later in life.

you would think there might be a finance class in there somewhere.

The stupid is strong on this one. $260k for online degrees? How did she get accepted in the first place if she was that dumb? Seems to be a nice looking house for a poor starving college student. That being, of course, part of the problem. It was a good thing that students were on the brink of starvation, or at least thinking they were. For many that was the first time they had to start learning how life works.

I've got to say I'm not surprised that this particular case was selected to be pushed by the media. Not wanting to violate any forum rules I will just say that her appearance is one of the main reasons her case was selected.

What a stupid twit. I hope she loses. I also hope that her financial records are published to the world so we can see what she blew 260k on.

What a disgusting twat.

Did you see her kitchen? Granite countertops, nice cabinetry, tile work, the whole nine yards. Pearly white teeth, new laptop, manicure, etc. She has no earthly clue what it means to be truly poor, and most likely used the bulk of those loans to finance her lifestyle while she was taking classes.

Eat ramen, wear shitty clothing, and drive a beater while living in a dump like most of the rest of us did while in college. Dumbasss.

So for 8 years, skipped out on work, lived in an apartment, didn't pay anything back, got her degree, and now doesn't want to repay the loans.

How nice, another entitled youth, she fully understands that she owes the money, and she sure didnt' have a problem cashing the loan checks and spending it.

quote:

Originally posted by Mars_Attacks:
These assholes are using student loans to fund their party twitter/snapchat luxury lifestyle.

Too true.

quote:

Originally posted by lkdr1989:
Get the colleges to co-sign student loans.

So, so true!!