Why do you say they were acting irrationally? They were broke and they saw they could still live in a 1/2M house--sounds pretty rational to me, especially if yo

Why do you say they were acting irrationally? They were broke and they saw they could still live in a 1/2M house--sounds pretty rational to me, especially if you can just drop the debt via bankruptcy. With colleges, there is a nasty effect that student loans are inflating tuition prices and punishing the financially responsible people who save money for tuition. It's almost more rational to make sure to have no savings and benefit from the free government money.