Showing posts with label Willie Nelson. Show all posts
Showing posts with label Willie Nelson. Show all posts

Friday, July 8, 2016

Message to Distressed Student-Loan Debtors: Don't Give Up! Change is In the Wind

Don't give up
'cause you have friends
Don't give up
You're not the only one
Don't give up
No reason to be ashamed
Don't give up
You still have us
Don't give up now
We're proud of who you are
Don't give up
You know it's never been easy
Don't give up
'cause I believe there's a place
There's a place where we belong
Don't Give Up
Lyrics by Kate Bush & Peter Gabriel 

If you are overwhelmed by your student-loan debt, discouraged, and don't know where to turn, take my advice. Go to your refrigerator, pop the cap off a Shiner, and then listen to Don't Give Up, written by Peter Gabriel and Kate Bush. Several artists have sung the song, but I prefer Willie Nelson's version.

Some of the lyrics prompt me to reflect on the millions of Americans who are burdened by their unpayable student loans. "Don't give up," Willie tells us. "No reason to be ashamed." You still have your friends.

And I personally believe that change is in the wind regarding the federal student loan program. I think the magnitude of the student-loan disaster has grown so enormous that the federal government can't ignore it.  I see faint signs that help is on the way.

Why do I think this?

First, the Department of Education is finally moving forward on banning mandatory arbitration clauses in student-enrollment contracts at the for-profit colleges. If DOE follows through, students who were defrauded by their colleges can sue and can even join class actions. This is a good sign, and could mark the beginning of the end for the rapacious for-profit college industry. 

Second, Hillary essentially embraced Bernie Sanders's call for free college education at public universities this week (with some qualifications). This is also a good sign, because no scheme to offer free tuition is workable without massive reform of the federal student-loan program.

Third, and more importantly, Hillary called for a 3-month hiatus on student-loan payments while students refinance their loans to take advantage of lower interest rates. Once the federal government begins a wholesale effort to refinance millions of loans,  it will be apparent to everyone that the student-loan program is a train wreck. Broad relief could emerge from Hillary's idea.

Fourth, the bankruptcy courts are beginning to remember their purpose, which is to offer a fresh start to honest but unfortunate debtors. The recent cases are all over the place, with some courts still issuing callous decisions. But there are a lot of good decisions: Roth, Hedlund, Krieger, Abney, McDowell, Fern, etc.

Fifth, the Department of Education issued an important letter in July, 2015 outlining when it would not oppose bankruptcy discharge for student-loan debtors. DOE said creditors should consider the cost of opposing bankruptcy discharges, whether or not they think a debtor can show undue hardship if forced to repay student loans.

So far, this letter has been largely ignored. In my opinion, DOE did not act in harmony with the letter when it opposed bankruptcy discharge in the Abney case out of Missouri.  But DOE is now on record that it recognizes a variety of circumstances when a bankruptcy discharge is appropriate for some student loan debtors.

Richard Precht used that letter to his advantage in a Virginia bankruptcy decision earlier this year. He presented the letter to a very receptive Virginia bankruptcy judge, and DOE agreed not to oppose a discharge of Precht's debt. 

I acknowledge that all these signs of hope are faint and that a lot of misery lies ahead for millions of college borrowers who now hold about $1.5 trillion in student-loan debt.

But this catastrophe will someday come to an end--it can't go on forever. I recall my father, who was captured by the Japanese on the Bataan Peninsula during World War II ad endured the living hell of a Japanese prison camp from April 1942 until August 1945.

Two thirds of the men who were captured with my father did not survive the war. Some were murdered, some starved to death, and a few committed suicide. But my father survived, and the war ended.

Likewise, the federal student-loan program will eventually collapse, and millions of deserving college borrowers will get relief.  So, remember Willie's advice: Don't give up. 

And keep a six-pack of Shiner on hand  in your refrigerator. (My advice, not Willie's, but I'm sure he would agree.)

Image result for shiner beer
Don't give up: You've still got your friends

References

Stephanie Saul and Matt Flegenheimer. Hillary Clinton Embraces Ideas From Bernie Sanders's College Tuition PlanNew York Times, July 6, 2016. Accessible at http://www.nytimes.com/2016/07/07/us/politics/hillary-clinton-bernie-sanders-education.html?_r=0

Anne Gearan and Abby Phillip. Clinton to propose 3-month hiatus for repayment of  student loansWashington Post, July 5, 2016. Accessible at https://www.washingtonpost.com/news/post-politics/wp/2016/07/05/clinton-to-propose-3-month-hiatus-for-repayment-of-student-loans/?hpid=hp_special-topic-chain_clinton-loans-11pm%3Ahomepage%2Fstory