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Can't speak for every kind of student loan, but AFAIK at least federal student loans are not like other loans. They are notoriously difficult to wipe away. I re
by mehrdadn 8y ago
Can't speak for every kind of student loan, but AFAIK at least federal student loans are not like other loans. They are notoriously difficult to wipe away. I recall reading that a judge will only forgive it if there is no chance you can ever pay it back, or something like that. Search online for the specifics. You cannot treat them like other kinds of loans.
- labster 8y agoFor a normal loan, the game theory pits the lender against a future bankruptcy court, and they have to decide if they'll get more money by reducing the debt, or if going to court is the best solution. Not so for student loans; in the U.S. they typically cannot be reduced in bankruptcy court. So the choice becomes a simple one of cooperate=1, defect=2. Well, okay, it's not that simple. We don't yet have hereditary debt, so the debtor can still choose defect by killing themselves, reducing the amount the lender can collect. Debtors usually consider the cooperation strategy the better one.
- mehrdadn 8y ago> We don't yet have hereditary debt, so the debtor can still choose defect by killing themselves Well that escalated quickly...!
- chrisbennet 8y agoThe author of the article wouldn’t have escaped the debt even by dying - her parents would still be on the hook. It’s not “hereditary debt” but it’s close.
- deleted 8y ago[deleted]