Repost here: "But in 2005, during a major overhaul of the bankruptcy code, private student loans were given an elevated status and thus couldn't be discharged.

Repost here: "But in 2005, during a major overhaul of the bankruptcy code, private student loans were given an elevated status and thus couldn't be discharged. This didn't make sense. If we are going to have a fair bankruptcy system, private education loans should be treated the same as other private consumer debt. That's the risk lenders take, similar to the risk borne by providers of loans for cars, homes or other consumer purchases." [1] "Lenders receive a 97 percent guarantee against default losses, which removes almost all of the default risk of the loan to the lender. If a borrower does not repay his or her federal student loan, the government pays the lender 97 percent of the outstanding principal and all of the accrued unpaid interest. In other words, the lender assumes default risk for only 3 percent of the loan principal." [2] [1] http://edlabor.house.gov/edlabor_dem/mt-search.cgi?IncludeBlogs=11&limit=20&tag=student%20loan http://edlabor.house.gov/edlabor_dem/mt-search.cgi?IncludeBl... [2] http://febp.newamerica.net/background-analysis/federal-student-loan-subsidies http://febp.newamerica.net/background-analysis/federal-stude...