Baseball Crank
Covering the Front and Back Pages of the Newspaper
December 7, 2005
LAW: It Never Ends

The Supreme Court just held (in an opinion by the as-yet-unretired Justice O'Connor) that if you are delinquent on your student loans, the government can take it out of your Social Security.

Posted by Baseball Crank at 11:40 AM | Law 2005 | Comments (15) | TrackBack (0)
Comments

Why does that bother you?

Posted by: Mike at December 7, 2005 12:36 PM

I don't have a beef with the rule. It's just a reminder of the persistence of student loans.

Posted by: The Crank at December 7, 2005 1:45 PM

oh that reminds me, better pay my student loans...

but what if SS runs out before i retire? Does that mean i got to go to college for free??? MMMM interesting...

Mybe i should go back for my masters :)

Posted by: rcm at December 7, 2005 1:56 PM

I think Crank was just noting how student loans for this generation have joined death and taxes on that list of life's unavoidable unpleasantries.

I am sure as a graduate of some fine institutions, he is no stranger to the burden. I have come to view mine as a bum knee or a limp that you just get used to after a while and forget about.

Student loans already were not covered under the consumer freindly Truth in Lending Act (though almost any other consumer loan is), and are not dischargable in bankruptcy. Now, with the Supreme Court's decision, their reach has been extended.

Its not all bad. Because so much of our generation is indentured to student loans, universities in this country remain the envy of the world. It is one area we still dominate - I think most lists would place 17-18 of the top 20 world's top universities in this country.

So education and hollywood action films are all we have left for now. But if he stay strong on the former, I think we'll be ok.

Posted by: pat_rick at December 7, 2005 2:05 PM

If someone still has outstanding student loans decades after leaving college it's no longer a loan but rather a theft. Sounds like a good reason to open up some "debtor's prisons."

Posted by: LargeBill at December 7, 2005 6:10 PM

LB, Don't forget a Social Security is not just for the elderly. Alot of disabled people qualify as well. And in today's environment, if the loan is still out there decades later, so is lots of accrued interest - and the Feds have the ability to lien the shirt on your back. So I think their hand is strong enough at this point.

Are you in the Prison Contracting business? Just wondering.

Posted by: pat_rick at December 7, 2005 7:41 PM

Bill-

Assume you're joking. If not, you should think about what you're saying.

I agree that unpaid debt should be come out of social security (it functions almost like a lien in that regard), but loss of liberty?

C'mon.

Posted by: Mike at December 8, 2005 6:21 AM

I may have been engaging in hyperbole in the comment about prisons, but do maintain something needs to change. Why do people have such a cavalier attitude towards taking on debt they have no intention or ability to re-pay? Because there are no consequences to fear. Heck, we are so concerned about not being judgmental that we have even removed shame of bancruptcy as a concern.

Posted by: LargeBill at December 8, 2005 8:33 AM

I think establishing a lien -- secured by the federally-guaranteed retirement fund to which the debtor has contributed with every paycheck -- is a damn strong consequence.

And your notion that bankruptcy is the result of a cavalier attitude towards obligations (or worse, from an intent never to re-pay) simply has no empirical backing. In fact, most studies I've seen show that bankruptcy is caused by three events above all others: loss of employment; illness (with the concomitant medical bills); and divorce (for female bankruptcy filers w/ children).

Inability to re-pay debt is a terrible thing for the debtor, the creditor, and society. And, I agree, the creditor should get his loan back. But shame (or criminalizing) shouldn't play into it.

Posted by: Mike at December 8, 2005 9:25 AM

This ruling is just a reminder that you should pay off your student loans as quickly as possible after you graduate, or they will haunt you for the rest of your life.

Posted by: GEB4000 at December 8, 2005 11:40 AM

Whether or not bankruptcy is a result of events out of your control, I've seen too many people who declare it, after moving many assets to Florida, which has enormous shield laws, and ignore their obligations.

Also, never mind that your social security is attached for failure to pay student loans. Whatever happened in the intervening DECADES that prevented the feds from going after the borrowers?

Posted by: Daryl Rosenblatt at December 8, 2005 1:24 PM

It took twelve years of monthly payments, but I paid off my last loan this year. Not only is it a relief to not have to pay them any more, but I feel good about paying my debt.

The cavalier attitude about debt by so many people today certainly is not limited to student loans. Reports abound about the growing problem of credit card debt, especially with college students who have not learned about money management. The average American credit card debt stands at about $10,000. I don't even want to start calculating the interest on that! Yet another reason we've seen such rises in bankruptcies.

But back to student loans. For me, it boils down to personal responsibility. Pay it now or pay it later.

Posted by: Jonathan at December 8, 2005 1:30 PM

the fact is that taking a percentage of the gross income after college for 5 or ten years would be a better solution for everyone

Posted by: Mike at December 8, 2005 3:53 PM

I was trekking on the Annapurna Circuit in Nepal in April/May 1998. At Chame on the Marsyandi Valley (east) side of the Thorang La pass I met a graduate of Syracuse University who resided in Buffalo, New York. After dinner he bragged about not paying off any of his student loan even through he had graduated 14 years earlier. I angrily told him that he was making it more difficult for others to get student loans as other trekkers in the teahouse listened in and applauded. This chastened loan absconder left the lodge early the next morning and stayed at least a day ahead of me for the rest of the trek. Every couple days there would be a police check post with a register book. It was easy to check on the absconder's whereabouts by checking the nationality column for USA. One of the unpleasantries I told this loan defaulter was that every time I saw the Buffalo Bills play they gave up 50 or more points. I saw the Bills go down in defeat 50-20 to the L.A. Rams in a 1969 preseason game and 52-17 to the Dallas Cowboys in the 1993 Super Bowl.

Posted by: Yetijuice at December 8, 2005 4:40 PM

The government has cracked down quite a bit. These days someone like your fellow trekker would suffer a destroyed credit rating and then the Feds would receive a judgment against him, and proceed to attach everything from wages to social security payments - possibly his home and maybe more.

So I don't think too many people will casually be noting they blew off their loans these days. But I did hear 15-20 years ago it was different.

Posted by: pat_rick at December 9, 2005 9:46 AM
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