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You lose your house if you walk away from it, including all the money you've paid into it. The equivalent of this for student loans would be if you gave back yo

You lose your house if you walk away from it, including all the money you've paid into it. The equivalent of this for student loans would be if you gave back your degree and related experience when you defaulted on student loans.

toomuchtodo 11y ago
This only works when the underlying asset has value (note how many people walked away from their underwater homes during the housing collapse). This is no different.
- Mz 11y ago
  Unless it is a Love Canal scenario, the land and home still have some value and can be resold, even if it is no longer worth as much as the owner owes. But the university cannot have you send your diploma back and auction it off to someone else to get partial compensation. Loans always involve some risk and there are always some bad loans. But there is, in fact, a real difference between secured debt and unsecured debt. A mortgage is secured debt. A student loan is unsecured debt. Furthermore, since the point of education is to basically help people become more clever, if we make it too easy for smart, knowledgeable people to wash their hands of their student loans, the end result will be an overall societal attitude of "Only a fool actually pays their student loans." At that point, the entire system falls apart in a way that makes our current woes look like small potatoes.
  - eimai134 11y ago
    Very true. There is also the big difference of private companies versus the government taking on the debt that is walked away from.
  - toomuchtodo 11y ago
    > Furthermore, since the point of education is to basically help people become more clever, if we make it too easy for smart, knowledgeable people to wash their hands of their student loans, the end result will be an overall societal attitude of "Only a fool actually pays their student loans." At that point, the entire system falls apart in a way that makes our current woes look like small potatoes. That's going to happen regardless, with over a trillion dollars in student loan debt. Its just taking longer than expected. Smart people will always learn how to hack the system. Its easy to default on a house in any state. Its easy to default on your student loan debt if you're moving to another country. The only people who get stuck with worthless debt are suckers.
    - deleted 11y ago
      [deleted]
    - eimai134 11y ago
      It's quite hard to just move to another country - most have very strict immigration policies.
      - toomuchtodo 11y ago
        Not if you have a college degree.

toomuchtodo 11y ago

This only works when the underlying asset has value (note how many people walked away from their underwater homes during the housing collapse). This is no different.

Mz 11y ago
Unless it is a Love Canal scenario, the land and home still have some value and can be resold, even if it is no longer worth as much as the owner owes. But the university cannot have you send your diploma back and auction it off to someone else to get partial compensation. Loans always involve some risk and there are always some bad loans. But there is, in fact, a real difference between secured debt and unsecured debt. A mortgage is secured debt. A student loan is unsecured debt. Furthermore, since the point of education is to basically help people become more clever, if we make it too easy for smart, knowledgeable people to wash their hands of their student loans, the end result will be an overall societal attitude of "Only a fool actually pays their student loans." At that point, the entire system falls apart in a way that makes our current woes look like small potatoes.
- eimai134 11y ago
  Very true. There is also the big difference of private companies versus the government taking on the debt that is walked away from.
- toomuchtodo 11y ago
  > Furthermore, since the point of education is to basically help people become more clever, if we make it too easy for smart, knowledgeable people to wash their hands of their student loans, the end result will be an overall societal attitude of "Only a fool actually pays their student loans." At that point, the entire system falls apart in a way that makes our current woes look like small potatoes. That's going to happen regardless, with over a trillion dollars in student loan debt. Its just taking longer than expected. Smart people will always learn how to hack the system. Its easy to default on a house in any state. Its easy to default on your student loan debt if you're moving to another country. The only people who get stuck with worthless debt are suckers.
  - deleted 11y ago
    [deleted]
  - eimai134 11y ago
    It's quite hard to just move to another country - most have very strict immigration policies.
    - toomuchtodo 11y ago
      Not if you have a college degree.