- well, i ve had many clients, post-bankruptcy, go on to buy houses, which they ve never been able to do. i ve had two clients actually become multimillionaires. - how hard would it be for me to discharge my student loan debt through bankruptcy? - it s impossible. - i guess bankruptcy is reserved only for the truly neediest cases. all right, to be fair, they do deserve a fresh start. mostly. but student borrowers deserve that option too. now that doesn t mean everyone s going to run out and file bankruptcy, or that they even should. there s something much bigger at play here. - in the absence of the threat of bankruptcy, you open the door for widespread abuse by the lenders. - without bankruptcy as an option, college lenders now frivolously lend out as much money as they can to anybody who wants to apply because repayment is guaranteed. it s up to the student to pay it back no matter what.
there s a whole series of gimmicks played in the industry that attempt to cloud what the actual picture looks like. - the lenders become very creative in how they can inflate a loan. - what they do is, they give you the teaser rate to start. it s artificially low. - that s right. college lenders are using the classic first one s free move, used on everything from streaming services to cocaine or so i m told. but that s not the only trick up their sleeve. - it s a lot of fine print. it s overwhelming. - maybe you make an underpayment one month, and they pyramid your fees until you don t notice. - if you end up defaulting, your wages can be garnished. they can come in and just say, nope. we re taking 15% of your wages without any sort of due process at all. they do the same thing with social security. - so if you re a teenager signing the papers, why don t you listen to the adults in the room who were there to guide you? remember your guidance counselor, how they reeked of coffee and
there is no bankruptcy option. - the lenders know you can t run, you can t hide. so this essentially gives them a license to steal. - when lenders have no incentives to restrict who they re lending to or how much to loan out, guess what happens to tuition costs? - the colleges raised their price, essentially at will. - and you re paying for it. and college lenders know that. so the more obscene the tuition, and the more ridiculous the gimmicks that colleges play, the richer college lenders become. - so just having the threat of bankruptcy forces the lenders to behave rationally and with a modicum of good faith. - and without those bankruptcy protections, we re left with a self-perpetuating system of greed. - you know, from the outset, this was a legislatively manufactured crisis. - it was the 1998 reauthorization of the higher education act. - the senate will now vote on the adoption
go on to buy houses, which they ve never been able to do. i ve had two clients actually become multimillionaires. - how hard would it be for me to discharge my student loan debt through bankruptcy? - it s impossible. - i guess bankruptcy is reserved only for the truly neediest cases. all right, to be fair, they do deserve a fresh start. mostly. but student borrowers deserve that option too. now that doesn t mean everyone s going to run out and file bankruptcy, or that they even should. there s something much bigger at play here. - in the absence of the threat of bankruptcy, you open the door for widespread abuse by the lenders. - without bankruptcy as an option, college lenders now frivolously lend out as much money as they can to anybody who wants to apply because repayment is guaranteed. it s up to the student to pay it back no matter what. there is no bankruptcy option.
in the industry that attempt to cloud what the actual picture looks like. - the lenders become very creative in how they can inflate a loan. - what they do is, they give you the teaser rate to start. it s artificially low. - that s right. college lenders are using the classic first one s free move, used on everything from streaming services to cocaine or so i m told. but that s not the only trick up their sleeve. - it s a lot of fine print. it s overwhelming. - maybe you make an underpayment one month, and they pyramid your fees until you don t notice. - if you end up defaulting, your wages can be garnished. they can come in and just say, nope. we re taking 15% of your wages without any sort of due process at all. they do the same thing with social security. - so if you re a teenager signing the papers, why don t you listen to the adults in the room who were there to guide you? remember your guidance counselor, how they reeked of coffee and pretended to know your name? - i truly don