How Biden helped create the student debt problem he now promises to fix

[Hassin Bin Sober]

How Biden helped create the student debt problem he now promises to fix


The former vice-president and 2020 presidential hopeful backed a 2005 bill that stripped students of bankruptcy protections and left millions in financial stress

https://www.theguardian.com/us-news/2019/dec/02/joe-biden-student-loan-debt-2005-act-2020


Among his promises is that he will fix the student loan crisis saddling 45 million Americans with crippling debt now totalling a staggering $1.5tn. One idea is to allow people struggling to repay private student loans owed to banks and credit card companies to discharge them in bankruptcy.

The pledge is one of the most striking policies on offer from Democratic candidates in the 2020 race, given how the problem Biden now proposes to resolve came about in the first place. Private student loans were largely stripped of bankruptcy protections in 2005 in a congressional move that had the devastating impact of tripling such debt over a decade and locking in millions of Americans to years of grueling repayments.

The Republican-led bill tightened the bankruptcy code, unleashing a huge giveaway to lenders at the expense of indebted student borrowers. At the time it faced vociferous opposition from 25 Democrats in the US Senate.

But it passed anyway, with 18 Democratic senators breaking ranks and casting their vote in favor of the bill. Of those 18, one politician stood out as an especially enthusiastic champion of the credit companies who, as it happens, had given him hundreds of thousands of dollars in campaign contributions – Joe Biden.

[stonecutter357]

1. good let's go Joe !

[Thekaspervote]

10. They go low!!! We go high, or side step.... or better yet ignore

[PatSeg]

23. Biden supporters are usually

known for taking the high road as a rule.

[ChubbyStar]

24. I have not seen that here on DU

if it makes you happy to believe that well knock yourself out.

[PatSeg]

33. I've been on DU for a very long time

and most of the Biden supporters I've met here were usually polite and reasonable. There are always exceptions, plus there are also the occasional trolls who try to divide us, but overall the supporters have been positive. I'm sorry to hear that your experience has been different.

[InAbLuEsTaTe]

27. LOL!!

Bernie/Elizabeth or Elizabeth/Bernie 2020!!
Either way, they're stronger together!!
Welcome to the revolution!!!

[JoeOtterbein]

2. K n R ! Thanks for posting!

[Thekaspervote]

3. Again... if you think you are changing the minds of voters with negative posts

News flash... YOU’RE NOT!

[TwilightZone]

4. One thread wasn't enough?

https://www.democraticunderground.com/1287364838

If you think spamming the board is helping your candidate, you would be mistaken.

[Thekaspervote]

7. Spamming indeed! Not sure how they think it's helping

It smacks of anger and desperation

Certainly doesn’t make me want to cozy up to bernie!!

[Hassin Bin Sober]

9. Completely different source and article.

Unless you are accusing Mother Jones (who has been very critical of Bernie) and The Guardian of colluding and spamming.

It’s called vetting.

[Thekaspervote]

12. No it isn't vetting.. it's VENTING... and it doesn't do any true democrat any good

This article has been posted before and did nothing to move the dial

Next subject!!

[Hassin Bin Sober]

17. Posted before? Show me.

[InAbLuEsTaTe]

28. I'd be afraid of vetting too if Biden was my candidate!!

Bernie/Elizabeth or Elizabeth/Bernie 2020!!
Either way, they're stronger together!!
Welcome to the revolution!!!

[mopinko]

5. why the hell we have to subsidize loans that cant be discharged in bankruptcy is

one of those thing i never wonder about. cuz this is an oligarchy, that's why.

have a family member that went to northwestern law school on student loans, practiced 10 years, got nabbed for pot plants after the cali law was changed, but before the effective date, and had to surrender his license.
went through bankruptcy after this over a big tax bite. couldnt discharge the loans. 56, and still paying for a golden sheepskin he barely got to use.

certainly bears responsibility, but arent these exactly the kinds of risks the system is meant to underwrite?

[Hassin Bin Sober]

6. What's worse is we pay the claim when the loan goes bad. Then the bank owned collection....

.... company starts piling on collection and attorney fees. They make money when the loan performs, when it goes bad and when it goes to collections.


I’ll have to look for the article I read several years ago about the banks buying up the collection agencies.

[treestar]

49. No. Bankruptcy is for lawful financial risk only

It's too give you a second change if you went into business and failed or got caught up in large medical or other debt and just need a fresh start.

Losing you license over a criminal matter has nothing to do with the Bankruptcy code.

In fact, debt is not dischargeable on many grounds, such as being a fraud, inside dealing, domestic in nature, like child support, income or other taxes (usually have to make a deal with IRS), there are a whole set of exceptions to discharge.

[yaesu]

8. yep, he made a YUGE mistake, he should really apologize for it. The banksters were scared to death

knowing that when a collapse happens student loan defaults would go through the roof, well, they got their pre bailout bailout thanks to that bankruptcy bill.

[Thekaspervote]

13. Yuge... RWTP

[InAbLuEsTaTe]

29. He sure did... still waiting on that apology from Joe. (Cue the crickets... chirp, chirp!!)

Bernie/Elizabeth or Elizabeth/Bernie 2020!!
Either way, they're stronger together!!
Welcome to the revolution!!!

[beachbumbob]

11. It's laughable to exonerate parents and kids in making stupid

decisions on borrowing and many times for worthless Art History type degrees. Funny we never hear an Electrical Engineer complain about student loan debt isn't it?

[Thekaspervote]

14. OMG speaking the truth... thank you!

[beachbumbob]

15. The truth hurts, in the end we are responsible for what we do,

I hate the apologists who want to defend stupidity. Really, $100,000 loan debt for a history degree and then whine about it????

[Humanist_Activist]

19. How much in tuition did you have to pay bob? n/t

[CentralMass]

20. Thats not true. I work with of young engineers with big student loans.

[zipplewrath]

35. Likewise

I had young engineers with mortgage like debts. It is off the charts and needs to be addressed.

[TexasTowelie]

56. How much are those engineers earning after they receive their degree and license?

One of my closest friends has a son that started making $90,000 a year immediately after graduation. His son has been working about five years and is making $140,000 now. He didn't accrue much debt while he was in college because he was on scholarship, but the debt that he had was easily paid off.

His other two sons also received engineering degrees and both are essentially set for life. They worked hard to get into college and maintain their grades, but they are pretty much set up for long, prosperous careers.

[BeyondGeography]

21. 43 million holders of "worthless" art history-type degrees?

That’s how many people we’re talking there, beachbum. Care to back up your careless stereotype with some facts?

[Celerity]

22. Right wing talking point much?

Let's just turn all our universities into giant vocational schools.

Seeing this troglodytic, RW posturing here:

worthless Art History type degrees

is disgusting.

[BannonsLiver]

51. To be fair

It wouldn’t hurt if more people spent time thinking about the long term earning potential of their degree.

If you’re laying out 300k to get a degree for a job that pays 40k a year, it can be argued that you’re both following your passion, and making a terrible personal financial decision that could prove problematic in the future.

[redqueen]

55. +1

[TexasTowelie]

66. One of my college classmates graduated with a history degree and started teaching

at Austin Westlake High School which is probably the most wealthy school in the Austin area (with the possible exception of Lake Travis).

The first question that they asked my friend was "what sport do you coach?" Noting that his career options would be limited in the future, my friend returned back to college to become a math teacher instead.

I also know a brother and sister who had music and fine arts degrees. However, they did not take the courses to obtain teacher certification. Both of them found employment as teachers at Montessori schools, but their pay is significantly less than if they had obtained the teacher certification to make them more employable. I value their friendship and admire their artistic talents, but I was surprised that their father didn't provide more career guidance since he was an assistant superintendent. I'm not aware of how much debt they accumulated, but I saw how their families struggled financially over the past 20 years.

FWIW, I played trumpet from fifth grade through my last year in college so I do recognize the value of music and art in people's lives. However, I also tried to acquire skills to enhance my employment opportunities. I even started to work on my teacher's certificate after I graduated and I had a BS degree in mathematics and chemistry, but withdrew from college when I finally received a job offer. The job only paid $16,000 a year, but the alternative was to spend at least another $15,000 to get the certification and I was also going to have to search for a new roommate for the spring semester. I also started my classroom observations during that first semester and I was able to conclude that I wouldn't have been happy if I became a teacher since the teacher (a middle-aged man) couldn't maintain discipline in the class.

[progressoid]

25. Obama didn't pay off his student loans until he was 44. And he was making 400K a year.

Guess he should have been an engineer instead.

[Lordquinton]

38. Worthless art history degrees?

Every time you look at a piece of art, or history, or read a book, or listen to a song, thank an art major. Or just throw the Louvre in the trash cause according to you it's worthless.

[MichMan]

40. Performers and artists all have music and art degrees?

[progressoid]

48. Of course not.

But a lot do. Pete Townsend. David Byrne. Lada Gaga. Chuck D. Freddie Mercury. etc. ad nauseam.

[BannonsLiver]

59. And what about the people who laid out 250k for a degree

And then found out they weren't Lady Gaga or Freddie Mercury? Just a hunch, but there's probably more of those examples than the success stories you cited.

[treestar]

50. It does seem like there is an attitude of gee, they should be

able to declare bankruptcy on those loans without limit.

They have to be paid by at least most of them. The idea was OK at first, but the real problem is having the programs. Why have unsecured debt - why loan money to people who will be just starting their career when they have to pay it back right then? I had them but they were not that high but it did take me to age 35 to pay them back.

And it led to inflation of tuition too. The whole idea was bad from the start. We buy houses by loan, cars by loan, but your education by loan is too much. Maybe the intent was to create a serf class bound to their jobs.

[Autumn]

62. If you've never heard of an Electrical Engineer complain about student loan debt I think you

may not know very many Electrical Engineers.

[susanr516]

16. This is the main reason why I will not vote for Biden in the primary

You can almost never discharge a student loan debt in bankruptcy. If it's a federal student loan, your Social Security check can be garnished up to 15% to pay for it. Because of the changes in 2005, I told my children that student loan debt was the worst type of debt to incur. All of them have either attended part-time while working or completed a shorter course of study to work in their preferred field, and then taking classes part-time to get a more advanced degree.

My children have been directly impacted by the draconian changes to the bankruptcy laws in 2005. I will never forget, much less, forgive that.

If Biden gets the nomination, I will certainly vote for him. But I'll never forget the struggle and suffering his support of that bill caused my kids.

[emmaverybo]

32. Biden's plan would discharge student debt in bankruptcy so what are we on about now?

[zipplewrath]

36. His current "plan"

It's a campaign promise to fix a problem he created. Kinda like Obama's promise to close Gitmo.

[susanr516]

37. What we are on about now?

Get back with me when you can turn back time to 2006, when my oldest graduated from high school (youngest graduated in 2013.) Based on the bill Biden supported being passed in 2005, my children opted out of incurring student loan debt by attending college part-time while working or getting an associate's degree and taking one class per semester while working full-time to get a bachelor's degree. Of course, it's only Biden's plan right now. There's no guarantee the law will ever change.

Thanks so much for trivializing the dilemma my children faced when they grappled with the problem of paying for college tuition. Have a nice day!

[emmaverybo]

39. I have college debt. I think there are other pressing social problems and a better way to go

about it than amnesty. Sorry about your children and certainly not targeting them in my comment.

I think Sanders and Warren should target lower income folks with full relief and roll back interest in other cases. The average salary for millennials with a B.A. and more is 100,000 a year. The debt
that brings down millennials universally is credit card debt.

At a time when we face cuts to the social safety net, children’s lunch programs, and an epidemic of home foreclosures, I think we could offer sensible plans that give to a variety of demographic groups and address other urgent needs. Many can and have paid these loans which did mean better, higher paying jobs. When they balloon due to compound interest at an unmanageable level, and through health or the state or the state of the job outlook, one is unable to pay, let’s give relief. Canceling 95 to 100 percent is simply taking one type of debt and one demographic and saying that debt, that group needs the most.

Freeze interest for long-term hardship cases, roll back to principal in others, cap what can be taken out for non-profit schools.

I am still paying mine, so I would be personally helped, but this needs tweaking.

[aikoaiko]

18. I wish Elizabeth or Bernie would confront Biden over this

Protecting credit card companies over working families is deplorable.

[3Hotdogs]

26. The push for eliminating bankruptcy for student loans, came in response to the complaint,

students were signing for the debts, then going bankrupt.

I don't know how many graduates filed for bankruptcy, but it doubt it was many.

Biden was also responsible for the law that allowed credit card issuers to charge whatever interest the market would bear. Before that legislation was passed, there was a ceiling on interest.

You also were able to deduct credit card interest in your tax forms.

[redqueen]

30. Wait - what? He voted against usury laws?

When he brought that up in a debate while arguing with Warren I assumed he was saying he was for usury laws.

If he did vote against those ... I don't even know what to say.

[quickesst]

31. oh yeah

This was major breaking news tonight, right? No? Ok, maybe tomorrow. Hang in there.
Meanwhile, back at the ranch.....

?itemid=14984156

[pattyloutwo]

34. Voting records are relevant

I don’t think it’s “ going low” to post them. Thank you 😊

[Act_of_Reparation]

41. Discourses on Education

Boomers before we went to college:

GO TO THE BEST SCHOOL THAT ACCEPTS YOU IT'S ALL ABOUT PEDIGREE THE JOB MARKET IT COMPETITIVE IF YOU DON'T GET A DEGREE FROM A PRESTIGIOUS INSTITUTION YOU'RE GOING TO BE HOMELESS AND I'LL HAVE TO TELL ALL MY FRIENDS AT THE COUNTRY CLUB YOU DIED IN A CAR ACCIDENT TO SPARE YOUR MOTHER AND ME THE EMBARRASSMENT OF HAVING SUCH A FAILURE OF A CHILD.

Boomers after we went to college:

LOAN FORGIVENESS? Y DIDNT U JUST GO TO COMMUNITY COLLEGE? THE PROBLEM WITH MILLENNIALS IS THEY ARE SO ENTITLED. EXCUSE ME WAITRESS, I ASKED FOR NO SALT ON MY MARGARITA AND LOOK IT THIS THERES SALT ALL OVER THE PLACE I WANT TO TALK TO YOUR MANAGER.

[MichMan]

42. Unlike any other type of assets in bankruptcy, education cant be repossessed

Given the cost of college today, I believe that if there isn't student loan forgiveness or free college, that allowing student loans to be discharged would be a back door method to achieve the same thing.

In other bankruptcies, you dont get your debts discharged while still getting to keep your McMansion or sports car. IMO, letting someone borrow to the hilt to finance a degree and then getting to keep all the benefits of that degree towards future earnings while skipping out on the debt isn't right.

On the other hand, I do have sympathy for those who may have dropped out and find themselves still on the hook for paying off the loans.

I would support discharging student loans in bankruptcy only if the borrower was required to relinquish all college credits and any degrees earned as if they never attended. Wipe the entire slate clean so to speak.

[Hassin Bin Sober]

44. Good lord. You want to take away an education if someone can't pay?

"Are there no prisons?"
"Plenty of prisons..."
"And the Union workhouses." demanded Scrooge. "Are they still in operation?"
"Both very busy, sir..."
"Those who are badly off must go there."
"Many can't go there; and many would rather die."
"If they would rather die," said Scrooge, "they had better do it, and decrease the surplus population."

[MichMan]

45. That would be preferable to the current rules

That way, those who borrowed and dropped out before obtaining a degree wouldn't be faced with the debt while working at lower paying jobs.

Those who graduated and have the means to pay their student loan obligations wouldn't be able to game the system by declaring bankruptcy right after graduating, just to take a high paying job as an MBA or dentist later.

By the way, it is impossible to take away an education.

[George II]

54. The REAL issue, and resistance, is paying for education for those who CAN pay it.

[progressoid]

47. Huh?

So if I drop out, I don't have to pay back the debt? What kind of reasoning is that?

[LanternWaste]

43. I get it... you need to spin his current action as something other than what it is

But it really seems that the only ones buying your spin as an actual concern are the same ones predisposed to believe a second-rate candidate in a distant third place is a position of viability.

It's some good malarkey, though.

[NurseJackie]

46. That shows how afraid of Biden the BS campaign is.

But it really seems that the only ones buying your spin as an actual concern are the same ones predisposed to believe a second-rate candidate in a distant third place is a position of viability.

That shows how afraid of Biden the BS campaign is. Sometimes I laugh. Other times I just SMH in disbelief and amazement. But mostly I just laugh.

[Auggie]

52. His vote hurt more than just students

[George II]

53. Isn't this the third time you've posted an attack OP (um, sorry, "vetting") since yesterday?

This one now...

and this one: https://www.democraticunderground.com/?com=view_post&forum=1287&pid=365250

and this one: https://www.democraticunderground.com/1287365800

[melman]

57. Your first link is a link to this very thread

[George II]

58. So?

[Hassin Bin Sober]

63. Bazinga!

[George II]

65. No comment on why you posted three OPs on basically the same issue? BAZINGA!

[Dem4Life1102]

60. Sorry but a non-Democrat attacking a real Democrat

Just doesn't impress me.

[Peacetrain]

61. Bernie Sanders does not have a chance this time around...

He is not a Democrat. You can post attack ops till the cows come home. Bernie Sanders is not going to win. He knows he is not going to win by now.

[Autumn]

64. Good OP. I had not known the extent of what the banks and CC companies

have lobbied to influence our lawmakers to protect and meet their desires over the American citizen. Another poster posted the link to me showing the votes for Glass-Steagall’s repeal. I was stunned. I never paid attention to that.