If the trouble in the finance industry means there are fewer high-paying jobs available for recent college grads, there may be a bit of truth to this statement. The least the feds could do is let students discharge their loans in bankruptcy.Dear Mr. Bernanke and Mr. Paulson:
My student loans are too big and it is hurting the economy. Can I have a bailout, please? I need $92,000.
Monday, September 22, 2008
Bailouts
A letter from Friday's New York Times:
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Especially considering that some legislators are now calling for bankruptcy reforms in the mortgage context. The proposal would allow judicially supervised renegotiation of a mortgage during bankruptcy proceedings. A more flexible approach, allowing renegotiation of terms as opposed to foreclosure, benefits both parties, allowing banks to recover assets and homeowners to keep their homes. Renegotiation in the student context will have a similar result: a revised payment schedule or partial discharge will allow more rapid and certain recovery of some debt by the feds while serving the statutory "fresh start" purpose of the bankruptcy code for student borrowers.
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