say you had a private college loan

[northernlights]

supplementing your staffords. What would happen if the lender went bankrupt?

And, if you were planning on taking out a private college loan, who would you take it with? A heading for bankruptcy firm... or one that had already been rescued from the brink?

(I'm having evil fantasies of taking out my private loans to finish off my healthcare degree from a borderline bankruptcy bank, only to buy it back on the cheap...or somehow have it get totally lost in the shuffle...:evilgrin:)

[Tangerine LaBamba]

1. No matter where you borrow,

someone is going to buy up your paper if your lender goes belly-up, and you're still going to be liable for whatever you borrowed.

[JDPriestly]

5. You see, everything is rigged to make the rich get richer.

That's all the Republican stuff is about.

Look back at the S&L crisis and you will see that the mega-banks of today were the buyer banks of then.

This is a repeat of the S&L, and it serves the same purpose. At taxpayer expense, a huge portion of American mortgages and real property is being offered on a fire sale. When all the pieces fall in place, a few very good Monopoly players will have lots of houses and tall buildings, most of us will be impoverished, and the game will start all over again with a period of seeming prosperity and growth followed by panic. That's the way this game is played. It is kind of a hide and go seek thing. If you happen to have a good position in a good business when panic hits, you will be just fine. If you happen to have just had some huge medical expenses or taken on college loans or lose your job -- you will be out. In the '30s, the impoverished road box cars west. There is no place to go now.

[Tangerine LaBamba]

6. Remember usury laws?

They were there for a reason. We need to reinstate them now. Otherwise, you're absolutely right, the cycle will just repeat itself over and over.

And people like us will be behind just a little bit more each time that wheel turns. Look at the airline industry, and that tells you all we need to know about how deregulation doesn't work.

[liberal N proud]

2. When you your lender no longer will carry your loan...

They tell you that you must find another lender.

Work with your college to find a lender that is friendly with the financial aid department at that institution.

If they go bankrupt, they will sell your loan to someone else and you will still be liable for the whole thing.

[lapfog_1]

3. Has happened with a number of mortgages..

but that's because someone sliced and diced the mortgages up and sold them as securities, bundling them with less risky investments.

When foreclosure time came, some have gone to the courts and asked the foreclosing institution to produce the mortgage paperwork... and they can't because it doesn't really exist after the sold it. Some courts have looked at this from a pure contracts point of view and excused the debt.

However, other loans haven't been treated this way, so I think you are out of luck, legally.

Even if the lending institution goes bankrupt, someone will buy up the assets... if you find out who and if they got a big discount... you might be able to buy it from them for less than "face value". But I wouldn't count on it. As for being lost in the shuffle, that's possible too, although pretty unlikely in this day and age.

[northernlights]

4. aw, man, you're killing my daydream

I figured as much, but after reading about the guy that bought back his own mortgage on the cheap, I was hoping...

I guess it's back to plan a. I was going to contact the financial aid office around December, right after finals and before Christmas and the January/February crunch when they quit answering their phones...