[ars]

Sounds like she is defaulting, but paying.

The idea of the default is to stop additional interest from being charged.

Then pay down the full debt, wait 7 years and done.

It's not a terrible strategy actually - although it has some serious drawbacks.

[pdonis]

The idea of the default is to stop additional interest from being charged.

But interest being charged was part of the original agreement she made. The fact that she was able to exploit a loophole in the system to avoid paying interest does not make it right.

[FireBeyond]

Right, exactly. The lender is basically sucking it up and taking a loss (which will be spread to the rest of us who -do- maintain our agreements) in the hope that will allow them to recoup any of their money.

And the author is proud of herself for that.

[waps]

Hey you can make the "fiscal obligation" argument here. You don't get to have your cake and eat it too. Choose :

1) defaulting as a strategy is not okay, but neither is giving out these loans without social responsability. In other words, she has zero obligation to respect the agreement she made, she only needs a socially acceptable option (let's call it the European strategy, the law as it applies to a sovereign government)

2) She has to follow the agreement, because it's an agreement, and so does the debtor. In other words, any loophole is perfectly ok, and if it benefits her, it's not just OK for her to use it, but it's morally good by virtue of being part of the agreement, and we should compliment her on being smart about her obligations.

This sort of discussion is the fundamental conflict between the people working in justice and congress. Laws often are written by morons in congress. They write stuff like "it is illegal to", or "you can't" or ... Without any guidance whatsoever about what happens in the alternate case

The problem with that is that that is not how the world works. A violation of the law is not resolved by God stopping the whole planet, smiting anyone who needs smiting, fixing any consequences and restarting the whole thing. So saying that something is illegal is almost completely beside the point, what you really should say is "if you do X, then Y happens". The world keeps turning after any and all crimes and we're left with attempting to puzzle together an incomplete mess and figuring out what would be a "fair" way to attempt to do what congress expects God to do.

In practice, you obviously can default on a loan, and the legal system does what the legal system does : "okaaaaayyyy, congress said A can't do X, who obviously just did do X, so now we do Y to her, because that worked well in this other case". In this case Y is nothing.

Thanks to the fact that congress can't be bothered to actually specify what happens if you do violate the law, there are huge holes in what they think the law is. As the author of the article illustrated, this makes violating the law a strategy. And please don't think only poor students use it as a strategy.

[pdonis]

giving out these loans without social responsability

In other words, you think student loans should only be given out by entities who will guarantee a job to the student after graduation? Then there would be a lot fewer such loans. That might not necessarily be a bad thing; but I don't think you can say it's a requirement for giving out such loans.

saying that something is illegal is almost completely beside the point

I didn't say what she did was illegal. I just said it wasn't right.

In this case Y is nothing.

No, it isn't. She's suffering a number of consequences, as others in this thread have pointed out. But those consequences aren't being imposed by the legal system; they're being imposed by private entities.

this makes violating the law a strategy.

I would say it makes exploiting loopholes in the law a strategy. But again, I wasn't talking about legality; I was talking about whether what she did was right. You would appear to agree that those are not the same thing.

And please don't think only poor students use it as a strategy.

Where did I say that?

[ZoF]

It's not necessarily a loophole given that her credit score is dinged. It's like fouling in soccer, she broke the rules got a yellow card, was it worth it?