Being murdered is no reason to forgive student loan, New Jersey agency says

[rube1859]

Another NJ department even commented on this potential issue in 2013: http://www.state.nj.us/dobi/pressreleases/pr130620.html

I know this sounds callous, but a 5 year term life insurance policy is all the parents probably needed to cover the financial losses and such a policy would be dirt cheap for a healthy-ish student about to go to college.

Do I feel bad her child was taken from her? Yes. Does that mean you wipe about a debt she agreed to? No.

 

[Scarlet83]

George Washington Univ is a nice school but at the annual cost of $62,000 a year. That's about $250,000 after graduation which I'm sure she has $150k in loan making $22k a year.

She can make some extra money working as an escort in D.C. if she's pretty enough. How the hell do you live on $22k in D.C.? I lived there and it's as expensive as NYC metro area.

I am a financial planner, and one of my rules of thumb is the student can comfortably pay down their loans if their debt is no more than 50% of the reasonable first year salary for their particular major. Anything above that, you need to be careful.

 

[bigbirdRU]

Everyone has a responsibility to choose a school that is at least relatively affordable- in state schools being the least painful. Even then, today's affordable" schools are barely affordable. The notion that you could pay off tuition by working a summer job is laughable today.

In 1975, minimum wage was 2.10. Average tuition room and board at a public school was 1,784. You could work 16 hours a week all year and pay that off.

Today, minimum wage is 7.25 and average cost is 19,548. You have to work 52 hours a week the entire year to pay that off.

http://money.cnn.com/interactive/economy/minimum-wage-since-1938/

https://trends.collegeboard.org/col...oard-over-time-1975-76-2015-16-selected-years

 

[Fishky]

If you borrowed money you have to pay it back. Dead or alive.

I love it when the bank tells me if you don't pay the loan it will affect your moms credit. I tell them I don't think God cares about her credit. This is no joke either I am serious it's like they have no clue sometimes.

 

[RUich]

The latest Consumers Reports has a large article on the student loan mess. As one kid said, "I messed up my life by going to college".
What college kid ever really understands money? I sure as hell learned a lot the first year I was working that never entered my mind before.

 

[rutgersdave]

The latest Consumers Reports has a large article on the student loan mess. As one kid said, "I messed up my life by going to college".
What college kid ever really understands money? I sure as hell learned a lot the first year I was working that never entered my mind before.

I knew about money freshmen year in HS. If I didn't earn money, sometimes I was starving at lunchtime. A lot of kids don't ever work until they graduate college.

 

[graystork]

The New Jersey parent that can afford it, fine, send your kid out of state. That means to me that your household income is at least $150,000 or you expect your kid to carry a substantial student loan. They shouldn't have to carry more than a $40k loan. If not, let them go to a public college in state.

 

[GoodOl'Rutgers]

In these circumstances the lending institutions should work in the price of insurance against death. Make it part of the loan and don't force parents who want to cosign to figure this crap out.

 

[Scarlet83]

In these circumstances the lending institutions should work in the price of insurance against death. Make it part of the loan and don't force parents who want to cosign to figure this crap out.

This is not a solution at all. Adding insurance to the loan increases the cost and makes a straightforward loan much more difficult to explain to the client and more costly to the client.

Additionally, no one wants to take responsibility for contracts they are signing. If you don't understand the contract, you don't sign the contract. If you don't understand the responsibility of paying back a loan, don't take the loan. I find that some people make choices and then when things don't work out as they hoped, the blame game, victim stuff begins.

Discipline. Making good decisions and implementing them requires discipline. Weigh your options, seek the advise of professionals, understand the risks, set a plan, make the best decision without emotion, and work your plan with discipline.

 

[RU Cheese]

I agree with responsibility and all that but I loke Good Olds suggestion. No one ever thinks about something like this occurring.

 

[krup]

I am all for personal responsibility, but the fact loans aren't dischargeable in bankruptcy means banks freely loan students large amounts of money without any care about the eventual ability to pay, and the fact banks are so free with their loan money has allowed colleges to issue thousands of worthless degrees that have no job prospects and raise tuition at rates far beyond the rate of inflation.

Under my reform plan student loans would be partially dischargeable in bankruptcy.

• The student would still be responsible for 1/3 of the balance because there should still be responsibility there
  
• The lending bank should have to write off 1/3 of the balance. Watch how quick they start being careful about how much they are lending in student loans and whether the person they are lending it to has a realistic possibility of paying it back under their expected income.
• The college it was spent at has to pay 1/3 back. It would slow down the rate of growth of tuition and worthless degree programs and force colleges to consider the actual job prospects of the degree programs they are offering.

 

[GoodOl'Rutgers]

I agree with responsibility and all that but I loke Good Olds suggestion. No one ever thinks about something like this occurring.

Thank you for not producing a knee-jerk reaction like the person above you. I am not saying this loan should be forgiven. I am saying this reveals a problem in the system that can be easily solved. I mean, really.. saying having insurance embedded it is too complex to explain to the students and co-signers? We all know the fee should be minimal because the death rate is minimal.

 

[daneman100]

This is an extremely complicated multi-faceted issue. Touched on already:

1. Personal responsibility

2. Treatment of the loans under state and bankruptcy laws, and the effects it has on loaning behavior from the banks.

3. Government interference in the marketplace driving up the cost of attendance.

However, after a recent conversation with a high school junior I feel that part of the blame is on high schools failing to even educate their students with even a rudimentary understanding of economics. This student asked me about their college plans, and my response was to ask this person what their expected ROI was. I then explained that I meant Return on Investment. The student was dumbfounded that I would equate a college education as an investment. After explaining that you are paying a large sum of money in the hope that it will greatly increase your lifetime earnings. The student seemed to understand. This is a 17 year old who has been thinking about college for awhile. How was I the first person to even put college in this light?

While anecdotal, I would imagine that this is not a unique situation. By the time students think about jobs they are close to graduation and the debt has already been created. If students are not demanding return before they are already in massive debt, why should a college control it's costs?

 

[demauroj]

This is Odd......

My Father co-signed my Student loan.
When he passed away the loan was forgiven.

Did the laws changed that much in 12 Years.

 

[RUScrew85]

LOL. But seriously, there should be an exemption in the case of death or incapacity.

Reality is that if the murdered were a foreign national, our legislature would be motivated to legislate such an exemption.

If you give this Exepmtion, who pays then? Someone will have to. Tax payers, bond holders, share holders? No one ever thinks their charity through. Especially when that charity makes someone else pay.

 

[RUScrew85]

I am all for personal responsibility, but the fact loans aren't dischargeable in bankruptcy means banks freely loan students large amounts of money without any care about the eventual ability to pay, and the fact banks are so free with their loan money has allowed colleges to issue thousands of worthless degrees that have no job prospects and raise tuition at rates far beyond the rate of inflation.

Under my reform plan student loans would be partially dischargeable in bankruptcy.

• The student would still be responsible for 1/3 of the balance because there should still be responsibility there
  
• The lending bank should have to write off 1/3 of the balance. Watch how quick they start being careful about how much they are lending in student loans and whether the person they are lending it to has a realistic possibility of paying it back under their expected income.
• The college it was spent at has to pay 1/3 back. It would slow down the rate of growth of tuition and worthless degree programs and force colleges to consider the actual job prospects of the degree programs they are offering.

The only downside to your plan is the bank never pays for anything. They just threaten financial Armageddon and get the government (You and Me) to pay.

 

[RUScrew85]

This is an extremely complicated multi-faceted issue. Touched on already:

1. Personal responsibility

2. Treatment of the loans under state and bankruptcy laws, and the effects it has on loaning behavior from the banks.

3. Government interference in the marketplace driving up the cost of attendance.

However, after a recent conversation with a high school junior I feel that part of the blame is on high schools failing to even educate their students with even a rudimentary understanding of economics. This student asked me about their college plans, and my response was to ask this person what their expected ROI was. I then explained that I meant Return on Investment. The student was dumbfounded that I would equate a college education as an investment. After explaining that you are paying a large sum of money in the hope that it will greatly increase your lifetime earnings. The student seemed to understand. This is a 17 year old who has been thinking about college for awhile. How was I the first person to even put college in this light?

While anecdotal, I would imagine that this is not a unique situation. By the time students think about jobs they are close to graduation and the debt has already been created. If students are not demanding return before they are already in massive debt, why should a college control it's costs?

Almost every problem in this country can be traced back to useless public "education".

 

[NotInRHouse]

Right now the US government gives charity to people who put clothes, booze, fancy dinners, and a car on credit, but not those seeking an education.

You can't even refinance a student loan, but many people who declare bankruptcy never pay back what they took and are in fact forgiven from doing so.

Why?

 

[rutgersdave]

This is Odd......

My Father co-signed my Student loan.
When he passed away the loan was forgiven.

Did the laws changed that much in 12 Years.

Federal loans are forgiven but New Jersey student loans are not.

 

[Scarlet_Scourge]

Right now the US government gives charity to people who put clothes, booze, fancy dinners, and a car on credit, but not those seeking an education.

You can't even refinance a student loan, but many people who declare bankruptcy never pay back what they took and are in fact forgiven from doing so.

Why?

Because of EVIL that's why.

Actually, I was able to refinance before that rule went into place. So hurrah for me for paying attention.

My advise to people is don't go to a school you can't afford.

The advise of two years CC and 2 four year is pretty damn good advise. That was given in this thread already.

Also never go out of state for a public school, that is a waste of money. All public schools are basically looked at the same. So no, a Michigan degree isn't worth more than a Rutgers degree. Plus you can get Pell Grants.

Unless you are getting into Ivy League, MIT, Cal-Tech, Stanford, NYU, Duke, or some other ELITE private, just stick with your State public schools for undergraduate degrees.

Most jobs only need to check that degree box and don't really care what college you went to. Only the jobs that you need to show off your creds, care, even at those firms, if you are not meeting with clients, it doesn't matter. 95% of college students may never get a job like that.

 

[krup]

The only downside to your plan is the bank never pays for anything. They just threaten financial Armageddon and get the government (You and Me) to pay.

The bank would have to eat 1/3 of the outstanding loan amount in a bankruptcy, as opposed to nothing today. That threat of future losses would force the banks to start paying attention to how much they are lending and the future job prospects of the borrower.

Imagine the impact on home or auto prices if banks did not even check that what people were borrowing for is worth what they are paying. That is the system we have now for student loans.

 

[NotInRHouse]

Because of EVIL that's why.

Actually, I was able to refinance before that rule went into place. So hurrah for me for paying attention.

My advise to people is don't go to a school you can't afford.

The advise of two years CC and 2 four year is pretty damn good advise. That was given in this thread already.

Also never go out of state for a public school, that is a waste of money. All public schools are basically looked at the same. So no, a Michigan degree isn't worth more than a Rutgers degree. Plus you can get Pell Grants.

Unless you are getting into Ivy League, MIT, Cal-Tech, Stanford, NYU, Duke, or some other ELITE private, just stick with your State public schools for undergraduate degrees.

Most jobs only need to check that degree box and don't really care what college you went to. Only the jobs that you need to show off your creds, care, even at those firms, if you are not meeting with clients, it doesn't matter. 95% of college students may never get a job like that.

I agree 100%. Yet, someone taking those 2 years at CC and 2 years at RU still will have a lot of loans, and may need a graduate degree. Should he or she die, must their parents be hunted down for that debt, while others go wild on credit cards with few consequences? That is the issue here. If the foregiveness was limited to the costs of the 2 plus 2 I would be fine with that.