Those same private loans are still available though - their interest rates are just higher. Either people aren't taking the time to research their options, or t

Those same private loans are still available though - their interest rates are just higher. Either people aren't taking the time to research their options, or they desire the lower interest rate in exchange for lack of bankruptcy protection. Interest rates are lower on the non-dischargable loans, so I'm not sure why you think they're the same when both types currently exist so you can see the difference without the need for guesswork. Additionally, private loans always have and still do take into account the credit history of the borrowers. If you don't have a credit history or someone willing to cosign you're basically out of luck. I don't think opportunistic bankruptcy filings are an issue at all, but I do think it would be an issue for banks to lend significant amounts of money to people with no way to quantify the risk associated with it. I don't have the perfect answer, but I do think it's better to have loans accessible by lower income people than to have the ability to discharge the loans in bankruptcy which by your admission only a small number of people do.