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The 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.
by hermitdev 10y ago
The 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.