15 votes

What if Ron Paul allowed bankruptcy on student loans?

We know that Ron Paul wants to end the racket that is student loans, but what about those that the program already captured?

Part of Ron Paul's platform could be allowing student loan bankruptcy.

This would allow the loans to be cancelled in a bankruptcy filing, currently bankruptcy does not allow the loans to be cancelled under any circumstances.

This plan would be intellectually consistent with Ron Paul's intention to end student loans, and give those at OWS a reason to not just vote, but also campaign for Dr. Paul.

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There are more than a few

There are more than a few who've gotten very expensive educations, moved overseas, and had little to no contact with the US for years. I suspect this method of bankruptcy will increase in the coming years.

Ron Paul is Not ‘Ending’ Student Loans

http://www.ronpaul2012.com/2011/10/24/ron-paul-is-not-ending...

There are many headlines out there now stemming from his Meet the Press interview yesterday claiming that Ron Paul wants to end student loans. Well no, in fact, though he abolishes the Department of Education along with four other federal departments, the student loan part is taken out and handled elsewhere.

Everyone recognizes we have major problems with Social Security and Medicare, and yet when anyone attempts to address these problems, they are immediately accused of “ending,” “slashing” or “getting rid of” such programs. Ron Paul is not suggesting this for anyone currently reliant on these programs or for those who will be in the near future. In fact, Paul’s opt-out for Social Security in his budget plan is age 25—not exactly imminent doom for the program or those on it.

The same is true of student loans. To recognize that we are bankrupt and we must have drastic change in this country is not to say that certain programs Americans have come to rely on will be gotten rid of overnight. Paul is certainly saying no such thing.

But the costs must be addressed—and not simply what the government spends, but the massive debt incurred by those in this country who just want a college education. To be sure, the countless Americans who are now slaves to education-related debt can tell you there are substantial problems with our current system.

Ron Paul simply wants to fix them.

Student Loans became a state-sponsored slave plantation

Student Loans became a state-sponsored slave plantation thanks to well-intentioned, well-meaning progressives. Easy money on easy terms made it easy for hyperinflation intuition fees. It was the government's fault, not the students'.

So, either cancel em outright (and make it damned difficult to ever get one again) or, my favourite, REVALUE the student loans 10:1, so any outstanding loan of 30,000 becomes a more normal $3,000.

It can be paid for by the institutions themselves, such as Harvard and Yale, whose endowments of billions and billions are doing nothing except spinning wheels in various hedge funds.

All those vast fortunes are ill-gotten, seized by greedy so-called Progressive deans and provosts because they knew ANY student could afford to go to school for $30,000 a year if the state guarantees it.

What a trap! What debt slavery plantation!

"Cowards & idiots can come along for the ride but they gotta sit in the back seat!"

What if he "pardoned" student loans???

Like the Social Security age range, he would have to set a limit as to "how long" and possibly "how much" the loans are or have been owed, but what a boost that would be to "real" Americans!

I and my family put "me" through college with no financial aid other than academic scholarships, but I graduated back in the 80's from a private university debt-free. Like Dr. Paul and his kids, I know it can be done. But I do feel for those buried under mortgages, car payments, student loans, etc with no prospect of a job in the near future.

I honestly do not know how this would play out as a pardon (with qualifications/criteria), but what say you all...?

.

The end result financially is the same for the US. Pardon or bankruptcy.

Except bankruptcy means that people who got good jobs from their educations and are paying won't try to weasel out of it.

The down and out are just that, down and out. Bankruptcy was designed for them.

Surely however the US should assume some responsibility. This program is wrong, hence it should be ended. Since the US did wrong in the past, how best to move forward here and now?

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no authority

President has no authority to pardon student loans. I want a constitutional President Paul, not a dictator.

actually he does

If he ends the student loan program altogether, which is unconstitutional, he can end both loan issuance and loan repayment.

It's organized under the president. Dept of Education (for now)

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It's actually a great way to start the ball rolling.

Paul has always said that it is all about the bad regulation.

This would be the populous stance and it would also be agreeably to Paul's libertarianism.

I would go one step further ...

if the banks need a bone to go along.

Put the student loan above secured credit, and after liquidation, the government will not reimburse the difference if the loan is not paid in full. That puts a check on the financial institutions. No bank would generate a mortgage for someone with student loans. Too risky. It also makes people think twice about student loans because it would delay their ability to achieve their american dream of owning a home.

All government gauraunteed loans should be placed above secured credit.

That may sound like a government grab but it isn't and it really puts things into a better reality when the broker is deciding to lend someone money for a home.

Or just let the free market

Or just let the free market decide the terms.

Yes, we all agree.

But Paul is all about selling this idea so that it is popular.

Paul said, "Of course I want to end Federal loans, but you can't get there from here."

It would be great if people came up with some very popular ideas that incrementally brought us to the goal.

Then when people open their eyes to see where we are headed, it will simply be steps away.

That is what makes Paul so unique.

He wants a discussion about the big things, the big goals.

If you tell people that the question is not about how much to allocate for student loans, its about loans or no loans, then people say, "No way, that can't be done, it will destroy our educational system, and the poor will not be able to go to college, etc., etc."

You make the steps small enough and popular enough without compromising one bit of priciple then we will be headed toward liberty.

I agree with your intentions

However I don't actually believe that is possible to achieve.

Look what happened to the Tea Party and I guess the same is now happening to the OWS.

The elite take over the ideas and turn them around using their media and the rest of their very powerful propaganda machine.

Any idea that may lead to peace or freedom is co-opted by them and distorted so it leads to the opposite - war and centralized power (dictatorship/fascism).

They will keep doing this until people are wise enough to see it happening and I believe that will only happen when people understand freedom and liberty and why it is the only fair and productive system possible.

My point is that the techniques and tactics that work for the elitist/dictators can and will never work for us. They manipulate people to support the opposite of what people think they support. The only way we can win is for people to understand the issues and be able to look through the propaganda.

If you are right ...

and we cannot achieve liberty thru baby steps just like the elite do then we have no hope.

Drastic shifts always lead to violence and we all know that will end in failure.

Paul thinks it will work.

Remember that the internet is the game changer.

We may be living in the only age that is not doomed to repeat history.

I sincerely think that is the only thing we can hang our hat on.

God Bless.

Yes baby steps

in understanding. We need to educate everybody and you are right we all have to learn one step at the time.

My point is that we need to understand the whole package of freedom, if we don't we will just be fooled into yet another tyranny.

Ron Paul needs to be careful

A lot of young folks depended on student loans. He needs to articulate a plan, and not just throw the baby out with the bathwater. His enemies will pile on him. Here's a simple solution. The government doesn't owe anybody an education, so each State should create it's own college program. Nobody should be entitled to funds like $100,000 - $200,000 anyway. If they're that talented, the school should advance them the education cost with a re-payment schedule. Having said that, I'd like to see States offer a guaranteed $10,000 per year loan, interest free, maximum 4 years program. Nobody gets in too deep, and States get re-payed, and every body can go to college. What they do with it from there, is there business.

alan laney

The empire will either be

The empire will either be dismantled carefully over time or it will dismantle itself catastrophically and all at once.

I suggest a dose of reality; how is everybody supposed to have a cushy desk job if nobody builds desks?

I agree...

I like the idea of in-state scholarships and aid.

I like the idea of a "top end cap" to such aid.

I like the idea of the 4-year, interest-free loan.

You're batting 3 for 3, alaney :-)

No bank in their right mind

Would ever give a student a loan again

The whole reason they got sub primes loans was because they had to be paid.

And, no bank would have given the sub-prime mortgages to

No bank would have given the sub-prime mortgages to unqualified buyers. And yet they did, because credit was made easy by our government and the Fed. Now people can walk away from their mortgages, or go bankrupt, or short sell, or apply for a host of other gimmicks to relieve them. Students who are broke, unemployed, and homeless, and who did not deliberately engage in fraud like Wall Street did, will take this debt burden to their graves. The majority of students who graduated had dreams and hopes of getting a good job and had every intention of paying their loans back.

"I support the Declaration of Independence and I interpret the Constitution."

Not true...

Top students in medicine have enormous repayment power. Same goes for many other fields.

The fallacy of overlooking secondary consequences

and pandering to the special pleading of selfish interests would have Henry Hazlitt call this bad economics.

Once again, most endeavor to live at the expense of everybody else through that great fiction of government. More irony from the Occupiers it seems.

But this is all in the case of "forgiveness."

The case of "bankruptcy" is another story.

I suppose one could raise the legitimacy of contractual integrity. Weren't the students aware that bankruptcy from the loan's debt would not be an option when they signed onto the loan?

Either way you would need to separate the burdern from the failed loan from the government back to the private loan institution. Bankruptcy would then hurt the private institution rather than the taxpayers (if I'm not mistaken).

The next outcry would be that the private institutions only made the loans because the government was guaranteeing them. Reminds me of the housing bubble.. and who ended up paying for that?

My question is, would the student have to forfeit his/her degree(s) if he/she declared bankruptcy?

"Whoever wishes peace among peoples must fight statism" - Ludwig von Mises

.

bankruptcy is the same financially to the US taxpayer as forgiveness.

So bankruptcy would serve to punish our youth severely for going to college on loans and falling for what the US government unconstitutionally enabled.

If you're going to force them to file bankruptcy out of spite just to give them a fresh financial start, sure why not force them to give up their degree while you're at it.

Out of spite?!!!

Yes, it's horrible "spite" that people have to pay their bills. Other innocent people should be forced to pay their bills for them, or else it's "spite".

Hahaha!

.

um, it was sarcasm?

How the F do you take away someones degree? You don't unless it was academic fraud.

In all seriousness bankruptcy is probably needed to deter people from fraudulently going after forgiveness. That's how it is for business owners.

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So what are the repercussions to

declaring bankruptcy? If it is just the loss of debt, then it sounds like someone wants a free lunch.

If one cannot afford a car loan, are they able to keep the car (i.e. "property")?

The property given by the academic institution (the fancy piece of paper) should be repossessed upon one's declaration that he/she cannot afford it.

Don't worry though, he/she is still able to keep his/her education (knowledge is intangible).

Either way, unfortunately, you have failed to address the issue Hazlitt said caused economic fallacies to mutliply a thousandfold-your action of benefiting one specific group at the expense of all others.

You must understand the simple fact that actions have consequences. I believe George Bernard Shaw likened liberty to responsibility, which inexorably meant most men would loath it.

"Whoever wishes peace among peoples must fight statism" - Ludwig von Mises

EDIT** double post? :(

EDIT** double post? :(

"Whoever wishes peace among peoples must fight statism" - Ludwig von Mises

need help

http://news.yahoo.com/paul-wants-phase-federal-student-loans...

there is an article now on yahoo talking about this issue. nearly all of the comments are very negative and strongly against dr. paul's possition. it might be helpful if people hear can go to this article and post comments defending dr. paul and explain why his stand on this issue is reasonable.

nr

.

How about we first get our own house in order and recognize that the very program to begin with was unconstitutional?

Then we will have a plan to deal with the consequences of the harm that the federal government has done wrong.

If we do that, by having a plan to take responsibility for the federal government's mistakes, then ending the program becomes a far easier sell for this campaign.

need help

http://news.yahoo.com/paul-wants-phase-federal-student-loans...

there is an article now on yahoo talking about this issue. nearly all of the comments are very negative and strongly against dr. paul's possition. it might be helpful if people hear can go to this article and post comments defending dr. paul and explain why his stand on this issue is reasonable.

nr

I got my BA in 1981 and I am aware that even THEN

bankruptcy would not forgive a student loan.

I don't think any change in the law was recent.

Yes you could have discharged

Yes you could have discharged student loans in 1981, if you had been paying on them for 5 or 7 years.

The law changed on Oct. 1, 1998 so that the only way to discharge these loans in bankruptcy was fro repayment to be an undue hardship on the debtor and his dependents.

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