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An old story of mine about how student loans are unconstitutional has gone missing from the Reuters website. The story is almost twice as relevant as it was 10 years ago, when Americans' collective student loan debt was not quite yet a trillion dollars.
The single most important thing about student loans is that you can't discharge them in bankruptcy
This makes them more predatory & toxic than any other kind of debt, which is saying a lot
It also violates students constitutional rights, bankruptcy prof Phil Shuchman said in 1975
The "solution" involved limiting rights of college "deadbeats" to discharge student debt in court, an idea Shuchman testified would have zero impact & gave him “the further very literal feeling that this is almost a denial of their right to equal protection of the laws.”
What no one predicted was the tidal wave of economic hate crime this non-dischargeability would unleash.
Stripped of the possibility of bankruptcy, student loans accrued interest & fees & grew by orders of magnitude.
Watch a $26K loan literally turn into a $226K+ loan
This is why nothing makes me more batshit than proposals to cancel student debt "up to $50K." Could any idea be less grounded in the reality of a problem? (Well, punishing students for deindustrialization)
Whatever % of student debtors have <50K is:
-the least fucked %
-SHRINKING
This former Trump DOE official now running for Congress in a Dem district went on Tucker in 2019 to say student loans were causing suicides & "an ever-increasing destruction of the fabric of America" h
Well what do you know, Judge Silverstein's empathy is not reserved for private equity firms and yacht collectors.
Here she is in the bankruptcy case of an epileptic Uber driver with $110K in college debt, saying maybe students deserve the occasional break too.
Biden ultimately dropped its appeal in the epileptic uber driver's case, but the WH's broader pattern of clamping down on the tiny sliver of student borrowers so hopeless and destitute their lawyers advise them to plead "undue hardship" is telling:
washingtonpost.com/education/2021/07/17/education-department-bankruptcy-policy/
A lot of Democrats still live in a fake reality originally concocted by bank lobbyists and refined over the years by generations of polarization optimizing software.
Republicans live there too, though their neighborhoods were conceived by oil lobbyists
But more & more Americans live squarely in a reality that could be vastly improved if politicians would only take extremely moderate, pragmatic & incremental steps to restore an element of "rule of law" to this chremastic inferno we got here
That might sound boring to my fellow travelers but look what the bank lobbyists are saying about the CFPB chairman's deeply tame, non-radical campaign to rein in fake charges like "resort fees" that 10 in 5 Americans despise.
americanbanker.com/opinion/the-cfpb-a-regulator-gone-rogue