Why would you extend a massive loan to someone who is broke, has no credit, and can immediately discharge the debt. They could and many of them would immediatel

Why would you extend a massive loan to someone who is broke, has no credit, and can immediately discharge the debt. They could and many of them would immediately discharge the entire balance of the loan upon graduation by declaring bankruptcy. They don't offer standard 40k+ loans to people with no credit at any rate. Also even if they did offer that the interest rate would be insane because you are dealing with so many defaults. That would not really make the situation better.