"If the law supposes that," said Mr. Bumble, squeezing his hat emphatically in both hands, "the law is a ass - a idiot".
Charles Dickens, Oliver Twist
About a year ago, I blogged on the bankruptcy case of Tamara Parvizi, a 51-year-old unlicensed medical doctor who sought to discharge $650,000 in student debt --most of it accumulated from going to medical school.
Actually, Ms. Parvizi attended two medical schools. First, she went to med school at the University of Rochester but dropped out. Later she enrolled at St. George's University School of Medicine, a for-profit medical school on the Caribbean island of Grenada.
Parvizi wasn't represented by a lawyer when she went to bankruptcy court. As an appellate court observed in a footnote, she didn't even file a proper complaint. She simply submitted a two-page letter asking to have her student loans forgiven.
Judge Elizabeth Katz, a Massachusetts bankruptcy judge, denied Parvizi's plea for relief, ruling in part that Parvizi had not made sufficient attempts to maximize her income.
Parvizi appealed, and a Bankruptcy Appellate Court affirmed Judge Katz's decision. The BAP court agreed with Judge Katz that Parvizi had failed to maximize her income, although it admitted that she would be unable to pay back such a mountainous debt even if she tried her best to get a better-paying job.
Judge Katz and the BAP court both said Parvizi should sign up for a REPAY income-based repayment plan. Based on her low income, her monthly payments would only be $80 a month. If she makes regular payments for 25 years, her student debt will be forgiven.
Of course, as the BAP court acknowledged, Ms. Parvizi's debt is negatively amortizing. In other words, her debt grows larger every month because her $80 payments aren't nearly large enough to cover accruing interest.
Indeed, Ms. Parvizi's debt has probably grown by $50,000 since the date of Judge Katz's 2021 decision. That's right--she must now owe around $700,000.
Does any of this make sense to you? It makes no sense to me. Why force a woman in her fifties to make token payments on a debt that will grow to well over a million dollars by the time she finishes her REPAYE plan?
Who benefits from this nonsense? Two medical schools benefited, and one of those schools is a for-profit shop located outside the United States.
And, of course, the four federal judges who reviewed Ms. Parvizi's debt are doing okay. They all make nice salaries and will get fat federal pensions.
The outcome of this litigation is insane. Perhaps Charles Dickens was right when he observed in one of his novels that "the law is an ass."
|Our government loans people money to enroll at foreign medical schools|
Adtalem (ATGE) is one of the worst culprits. https://www.thelayoff.com/adtalemReplyDelete
Thanks for your comment, Dahn.ReplyDelete
I am OK with her making token payments. This satisfies the moralists who want all debtors on the hook forever, but it does so with minimum damage to the debtors.ReplyDelete
I was not aware that Grenada still had fly-by-night medical schools. Pres. Reagan justified a pathetic military incursion into Grenada by saying that medical students there were in jeopardy.
I remember that Grenada invasion. I did not know at the time that the medical school students being rescued were attending a for-profit med school. You make a valid point about requiring people with huge student debt to make token payments, particularly people who racked up huge student-loan debt and never made any payments on it. I still argue for bankruptcy relief for these people, but Congress will never amend the bankruptcy code to make that possible. Thanks for writing.ReplyDelete
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