While I see your point and agree philosophically. I am currently in the position that those students are in myself.

I originally started in college with the understanding that my GI Bill would cover tuition and books, I quickly found that to be false. I worked a full time job all through college, used ALL of my GI Bill and still ran up substantial debts in the form of student loans. What did I get my degree in you might ask? Management Information Systems. I was told that there would be good paying jobs in that field. Sadly the best paying job I have been able to get paid 33K which is in no way sufficient to cover my bills and repay my student loans.

I had my loans in deferment expecting to get a promotion and then be able to make payments. About the time my deferments ran out I lost my job. Spent 2 years unemployed receiving harassing calls on a daily basis. Demanding that I make payments to the tune of approximately $1200 a month. When I finally gave up explaining to them that I was unemployed and actually ran the numbers with them. They told me that, "These numbers don't work." MY response was, "No Shit!" So then they said that I would still have to pay the $1200 a month and hung up on me. They have garnished my taxes and wages.

Yes I do have a job now and am making a better wage. As a school teacher. I am working towards correcting all the debt issues that I have due to being unemployed for 2 years and will be able to eventually consider repaying my student loans.

In hind sight I would have been better off not going to college and staying at the dead end job I had right out of the Army. Right now I would be making essentially the same wage that I am making as a teacher, never been out of work, I would be 6 months away from paying off the house that I lived in then and have no debt to speak of. Not to even mention the money that I would have in my retirement account both at that company and in separate savings.

Sorry but I have served my country, work my ass off and my only mistake was following the age old advice of trying to better myself.

Congenital moocheritis (brilliant, Susanne!), is epidemic.

Sco, you're making the assumption that these people think before they sign. I agree with you. Do only what you can afford.

Student loans are a brilliant education affordability instrument, and allow even the poorest students to get an education.

But to rack up a student loan for anything other than a high-employability STEM, business or law degree course is asking for financial trouble in later life. If someone wants to explore French Renaissance History, let them do it, but they need to know it's gonna hurt when they find themselves stuck in some teaching, burger flipping or civil servant job

Ever hear the comment give someone a cat as a gift and it becomes the gift that keeps on giving. Well in case of 0 it is the same thing only the other way.The result in time is that either kids going to college on government funding will NEVER pay it back or kids will not bother to go to college at all. 0's damaging effects will be observed for years to come and unfortunately those damaged the most to begin with will not ever recognize or accept it. Eventually ALL will be affected. Lets get bernie in to finish the job.

Hey, great way to groom voters before the crash if it doesn't happen by the time the votes for debt forgiveness pays off.

What I'm a bit confused over is this... The subject of the article is an attorney. And yet he can't afford a $1500 loan payment? Maybe... he is either working for the wrong firm (hell, our STATE attorneys could easily afford that kind of payment), or maybe he is in the wrong profession. More likely, my guess is some sort of hereditary issue - Congenital Moocheritis.

(I keep thinking - is his name Saul GoodMan?)

Anyway... This is how I read this. You take out a loan. Normally when you take out a loan the payments are set up to cover the interest and part of the principal. So why is this guy's loan set up to where it's not even paying interest, let alone principal? This sounds like one of those Countrywide home loan scams that ran a number of years back - "Sure, pal, we'll loan you $500K to buy that house, it doesn't matter if you're making $7.50 an hour... It'll all work (wink wink). It's called an Interest Only loan, see how cheap the payments are?" And then when the note comes due, the former homeowner now not only has no roof over their head, but no credit. Wheee...

I do know paying for grad school ain't cheap. But if you can't afford it (or at least the terms of a REAL loan (not one of these joke loans) to pay for it) then maybe you should be doing something else. I hear Cinnabon is hiring...

He can try a "GoFundMe" plea for help.

LOL. Millennials...

Very true, my MBA is being paid for by my employer at my $2,000 per semester limit. Sure, I can afford to pay for it, why rush it.. I don't have the time to go any faster anyway and its free keeping it within the budget.

Maybe try something creative... go buy a shitpile of a house in a bad neighborhood, he's in California after all... work every weekend on some sweat equity fixing it up, sell it in a couple of years for $50,000 or $100,000 more and put that toward the loan. Lives there for 2 years and that gain up to $250,000 is tax free...

$200,000 really isn't a lot of money in California, let's put things in perspective, the average house is around $350,000 state-wide, in urban areas, closer to $425,000 or in Southern Cal closer to $600,000.

He's a lawyer, income can be unlimited, he just needs to get out and hustle some work.

Not true. The student loans are disclosed very clearly on the www.studentloan.gov website. There isn't obscure documents sent to you anymore with fine print.

Easy answer, you don't need to go to Columbia or Yale if you can't afford it.

You and I responded at the same time, and I think yours is a bit clearer. I agree. Forgiven debt being income is nothing at all new.

If you do a degree in engineering two classes at a time you can often get employers to pay for it in addition to paying a salary. Almost all of my masters was paid by a company and by teaching a lab.

This is not new, forgiven debt has always been considered income on the IRS.

If you go and max out a credit card at $20,000, and you decide you are simply not going to pay it, at some point, the credit card company my 1099 you the $20,000 and write it off as a bad debt/unrecoverable. That 1099 is misc income, so it is reported on your income taxes as misc income. It absolutely should be.

Any loan is the same thing, he got a $200,000 education that everyone else has to pay for, whether its cash or goods or services rendered, he still needs to be taxed for it if he received it.

The difference is a credit card can be discharged in a bankruptcy, but a student loan cannot. That is made very, very clear in the student loan disclosures that it is not qualified based on your income or ability to repay, that you need to know what you are borrowing and how you can repay it. Ultimately if it is indeed forgiven, it is income to him.

It's amazing to me how youngsters always think they are the first to the shaft & screws put to them. We've all been on that merry-go-round, get over it. There is no "right" to borrow money and not repay it. He didn't need to be a lawyer, a Caterpillar Diesel Mechanic starts at quite a bit more than $90,000 a year and they pay their apprentices to go to school. He could have done that, he could have went into the military if he isn't a fat-ass, he could have done many different things, but chose to borrow $200,000 at a high interest rate. It is what it is.

"Part of the fault does like with the student. "
IMHO if there's fault it's on the gov't side for lending $100k with no collateral and terms that allow negative amortization (i.e. paying less than the interest). I suppose they're doing it b/c they think it helps students. It's a bad business deal that a responsible bank would not enter, so the gov't will do it for the benefit of students. (I'm not endorsing the gov't's view, just saying what I think it is.)

He's arguing that his income will never increase, but, he's also an idiot that borrowed $200,000 with probably a minimum-wage job at the time, so there is that...

I just don't get it where these people come from, as if its an entitlement to a $200,000 college education. My son didn't want to ring up a lot of debt, he went to a 2-year college his first 2 years that cost around $700 a semester for tuition and he's just finishing now, looking at better alternatives for his 4 year, but why pay a lot for an English class?

I served in the military, my education was basically free.

I have zero sympathy for these deadbeats... Considering I paid around $40,000 for my education, and I earn something north of 4 times that a year, I felt completely fine paying for it.

If you fail to do the market analysis on that $200,000 education that might make you a 'journalist' or whatever, and you simply can't pay the bill, its called failure & bankruptcy. Of course... they can't be discharged in bankruptcy either... so maybe running off to live in Europe or China ?

"It is a fiction. No income was had. Nothing was generated, save a debt of interest."
He received $100,000 tax free when he took out the loan. He's not planning on paying enough to cover the 7.5% interest so the balance will grow. Suppose he took that $100k and invested it in something returning 12%. In 20 years, he'll have $1 million. If he makes the minimum payment, he'll owe $400k. If the lender forgives the $400k, that's a real xfer of wealth from the lender to him. The lender could have invested the $100k, but they didn't. They gave to to the borrower, and he only paid part of it back. If the rules allow him legally to pay the minimum payment and he knows something that returns > 7.5%, it's in his interest to pay the minimum and accept the tax hit of them forgiving the loan. They're giving him $400k, and all he has to pay is the taxes. It's a good deal for him.

The student loan game is almost as bad as borrowing from the Mafia. The biggest difference is that you get the IRS instead of a big guy named Gino with a scar on his face that goes from his left eye across his nose and ends on his lower right cheek. What ever happened to working your way through? I know someone who did it. It took him an extra year, but between his job, and some help from mom& pop he ended up graduating debt free. He was offered a job that took him a thousand miles from home but was a great opportunity. The whiners you hear are those not willing to work, or travel far from home. They got what they bargained for.

I know a professor, in Denver, that teaches all students what she does. She is a perpetual student, always enrolled in student loan classes. She has been riding for 30 years owing 200K. As long as she is perpetually enrolled, she owes nothing, pays nothing. She will die, owing 300K.

Per the IRS, any debt that is forgiven is classified as income. The 'forgiver' of the debt must report the amount of forgiveness to the IRS in the form of a 1099. Only debts that are included in Chapter 7 bankruptcies are not counted as income. Also, if someone files Chapter 7, government debt is never eligible to be included and lives on after the bankruptcy...ie. Student Loans, Back Taxes, etc.

Ain't this fun?

At the same time, by signing on to loans that will be virtually impossible to repay unless the student is willing to work hard and live in poverty for the next 20 years, the student becomes accustomed to the idea of NOT paying off the loan, thus promoting the concept of not paying what you owe. Thirty years ago I knew that a patient would eventually pay me, even if they didn't have the money at the time of service. I actually had statistics; the odds were 99.9%. Now the odds are more like 65%, especially if the patient is under 50. I often ponder the reason for this. I think part of it is that young people are financially strapped these days, but I can also tell you there is an underlying conviction in the younger generation that medical and dental care should be free. That's why they are supporting Sanders. I maintain that there are more people expecting a free ride today, and their numbers are growing.

by the larger ones who claim to be to big to fail.