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Durbin Legislation Would Allow Student Loan Bankruptcy

Here is a wrap-up of some of the latest political news.

U.S. Dick Durbin (D-IL) has introduced legislation that would allow private student loan debt to be discharged in bankruptcy. The bill does not include federal student loans. This may be a boon to some senior citizens who are more concerned about having money for student loans rather than for golf or cruises. These senior citizens are still paying their college loans; others are paying costs incurred when they returned to college later in life; and others are strapped with loans they co-signed for their children who cannot, in this job market, afford to pay their loans.

The Washington Post reported that new research from the Federal Reserve Bank of New York shows that Americans 60 and older still owe about $36 billion in student loans, providing a rare window into the dynamics of student debt. More than 10 percent of those loans are delinquent. As a result, consumer advocates say, it is not uncommon for Social Security checks to be garnished or for debt collectors to harass borrowers in their 80s over student loans that are decades old, according to the Post.

The Federal Reserve Bank research said the percentage of older student loan borrowers by age are: 60 and older, 5.3 percent; 50 to 59, 11.8 percent; 40 to 49, 14.8 percent.  

Mega Millions Ticket Sales Raise $31.5 Million for Schools

Illinois' schools are winners in last week’s Mega Millions record lottery drawing. NBC Channel 5 reported that the Illinois' Common School Fund will receive a cash infusion of $31.5 million from ticket sales. The March 30 drawing was the largest U.S. jackpot, at $656 million.

The Illinois Lottery, which became the first state to sell lottery games online, said it sold more than $1 million from the Internet and recorded the largest sales week in state history, with sales totaling more than $94 million. Sales peaked from 5 to 6 p.m. March 30 when lottery officials reported tickets selling at a rate of $37,600 per minute or $2.3 million in sales for that hour. 

Illinois Congressmen Vote for Alternative Budget

Greg Hinz, of Crain’s Chicago Business, wrote about what he called “a rather interesting U.S. House vote last week that didn't get much notice, but it's a sign that, on some matters, the Land of Lincoln actually can still lead.”

The vote was on an alternate budget vote. Not the slash-burn one offered by GOP budget buster Paul Ryan, or the "no worries/tax the rich" approach favored by too many Democrats, he said.

Rather, this budget sought to implement the findings of the Simpson-Bowles Commission, which actually dared to go after whole herds of sacred cows on both sides of the partisan fence.

The budget plan would have trimmed the deficit by more than $4 trillion over the next 10 years, with two-thirds of the savings coming from cuts in spending including social welfare programs and one-third from closing specific tax loopholes while also lowering the tax rate.

The measure lost 38-382 in the House. But among the 38 yeas were five of Illinois' 19 congressmen, including suburban Republican Robert Dold. Voting no included Republicans Judy Biggert of Hinsdale, Randy Hultgren of Winfield and Peter Roskam of Wheaton.

Tuition Break Program Survives Attempt to Limit it

The Illinois House killed legislation March 29 that would have put limits on a tuition break program for employees of the state’s public universities, the Quad Cities Times reported.

The proposal, HB 5531, mustered just 25 “yes” votes of the 60 needed for passage. It would have limited the current 50 percent tuition cut to families with household incomes of $50,000 or less.

Rep. Luis Arroyo, D-Chicago, wants to end the benefit, saying the state can no longer afford it. But supporters said the benefit is an important recruiting tool for university employees.

Roskam Spokesperson Moves on to Super PAC

U.S. Rep. Peter Roskam, (R-6th) of Wheaton, the deputy House Republican whip, has lost his communications director, Dan Conston—but to a higher cause of sorts, according to Crain’s Chicago Business.

Conston will be communications chief at the Congressional Leadership Fund, a super PAC that hopes to raise money keep John Boehner and not Nancy Pelosi as speaker.

JP April 05, 2012 at 10:40 PM
So Durbin wants student loan debt to be discharged in bankruptcy. No need to save for college anymore. Get your degree, rack up 150K in debt and declare bankruptcy. It's not like they can foreclose on your education. Hey, I wonder who will end up paying for the bailouts for the lenders who get stuck with a trillion dollars in bad loans?
Ken S April 06, 2012 at 03:53 PM
Another attempt by the dems to remove personal responsibility from society
George April 06, 2012 at 05:19 PM
And when the massive defaults and bailouts start, it will be "the greedy bankers who loaned all that money to those poor kids" who get blamed.
Donald Ramsell April 06, 2012 at 06:05 PM
Typical of today's approach to debt, we simply forgive it. Why did the economy go bad in the first place? Irresponsible borrowers and irresponsible lenders. Instead of forcing more responsibility in paying off debt, we reward those who ran it up and then failed to pay it. What business is going to grant credit if there is a real possibility that politicians will force the lenders to eat the loss? Why did myself and both of my two children spend 10 years paying back our student loans? And if they allow people to avoid thses debts, does it just disappear? NO. It will be passed along (once again) to those people who might have been more fiscally responsible, such as you or I. I can understand a loan delay - but forgiveness is just another punch in the stomach of the middle class. Eventually, when these people get better paying jobs based on thieir college degrees, they ought to be forced to pay the rest of us back (yes, WE put up the money for student laons - the taxpayers).
Kelly April 06, 2012 at 06:17 PM
^ of course, but guys like Durbin, Quinn and Obama don't get elected by promoting personal responsibility.
Kelly April 06, 2012 at 06:53 PM
Now let's suppose Durbin gets his bill passed. Private lenders will have to be more wary of the credit risk involved in making student loans. Imagine the outcry of the community leaders when kids from low-income, single parent, bad credit score households are denied student loans! I imagine the solution will be a mandate that a certain percentage of loans must go to certain demographic groups, regardless of credit score. Sound like deja vu?
G.Ryan April 09, 2012 at 02:35 AM
Just another one of Dirty Dick's poor policy makings....he is one of the many reasons why term limits should be enforced!!!
abnerrichards November 16, 2012 at 01:09 PM
Student Loan Bankruptcy would be really very risky and harmful for the country, economy, bank, financial sector, and student also. I think that Durbin Legislation should not allow this student loan bankruptcy. http://www.paydayau.com.au
Peter Paul November 19, 2012 at 11:02 AM
America is still facing student loan debt problems. More than 10 percent of those loans are delinquent. There are many students who are unable to repay their student loan emi’s. http://www.12monthloans.co.uk

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