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If they don't suffer the consequences of buying a useless degree, why wouldn't they keep doing it? Why shouldn't the lender also assume part of this risk? Why
by shiven 10y ago
If they don't suffer the consequences of buying a useless degree, why wouldn't they keep doing it?
Why shouldn't the lender also assume part of this risk?
Why is their recoupment guaranteed (student loans can't be dissolved in bankruptcy)?
Why are they always likely to be bailed out (prove me wrong by showing a student loan lender that went into bankruptcy)?
Lenders need to do more due diligence and stop lending to students that are more likely to have problems with payback. The entire liability should not be assumed by the borrowers and co-signers.
- hermitdev 10y agoThe lender actually assumes most of the risk. In the case of a default, there's not generally much or any assets for them to go after to liquidate.
- shiven 10y agoI don't think that is true. You can temporarily avoid repaying the loan, but you can never be absolved of it via a bankruptcy declaration (whereas most other loans will effectively disappear). Student loans are repayable as long as you are alive, you can only get a temporary pause in repayment, at most. Hence, the lender is guaranteed repayment as long as the borrower or consigners are alive.