> adding any situation where bankruptcy is impossible seems like it destroys the purpose of having bankruptcy exist in the first place. Agreed, but keep in min

> adding any situation where bankruptcy is impossible seems like it destroys the purpose of having bankruptcy exist in the first place. Agreed, but keep in mind we aren't talking about loans in the traditional sense. Normally a loan requires some entity to take on the risk of default. With student loans this would mean looking at what the individual was studying, how much of their own money they were supplying, the typical default rate, etc. The amount that they will loan and the interest rate will be determined by the answers to those questions. When you have the government making loans to students without asking those questions, you are no longer running a normal loan program. When you remove the way a loan program usually adjusts to the risks up front, you have to try to deal with the risk elsewhere. This is done by removing the bankruptcy option. I think the solution is to account for the risk of the loan up front like we do with other loans. This probably means removing or decreasing the government's role in issuing these types of loans. Eventually, I could see colleges sharing the default risk with a private bank. Colleges who don't think their education is worth much would be less likely to participate in such a program, but that probably isn't a bad thing.