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> You cant even discharge it through bankruptcy. And why do you think that is? Once you get an "education", you can't exactly have another company repossess th

by urda 8y ago

> You cant even discharge it through bankruptcy. And why do you think that is? Once you get an "education", you can't exactly have another company repossess that from you. Not being able to remove your student debt by going through bankruptcy is a positive thing.

asr 8y ago
I've never seen anyone cite convincing evidence that there was a real problem with students declaring bankruptcy to get out of their loans.[0] On the other hand, having our bankruptcy system not apply to a meaningful portion of U.S. lending does create some incentive problems, like the fact that lenders have no incentive to make sure you'll be able to handle repayment, so you can take out huge student loans and find out at the end you have earned a worthless degree and that it will be massively difficult or nearly impossible for you to repay the loan.[1] [0] For example, https://www.gpo.gov/fdsys/pkg/CHRG-111hhrg52412/html/CHRG-111hhrg52412.htm https://www.gpo.gov/fdsys/pkg/CHRG-111hhrg52412/html/CHRG-11...: Currently, a debtor may discharge student loans in bankruptcy only upon establishing that repaying such loans would impose an undue hardship, but this has not always been the case. Prior to 1977, student loans were automatically discharged in bankruptcy. Perceived abuse of the bankruptcy system, as opposed to any real abuse, drove Congress to change this state of affairs. A 1976 GAO report had found that less than 1 percent of all federally insured and guaranteed educational loans were discharged in bankruptcy. In other words, no abuse. [1] For example http://law.emory.edu/ebdj/content/volume-32/issue-1/comments/non-dischargeability-private-student-loans-looming-crisis.html http://law.emory.edu/ebdj/content/volume-32/issue-1/comments...
- discodave 8y ago
  I should be clear that I wasn't trying to argue that the laws around student loan debt are just, or fair. I'm just saying that one of the alleged justifications for the current state of affairs is that the difficulty of discharging student debt leads to lower interest rates.
Fomite 8y ago
If I go into debt after a major medical crisis and then declare bankruptcy, the bank can't repossess me being alive.
dragonwriter 8y ago
> Once you get an "education", you can't exactly have another company repossess that from you. That's true of all unsecured debt (hence, “unsecured”), not a special feature of education debt that justifies treatment different than general unsecured debt.

by urda 8y ago

asr 8y ago

I've never seen anyone cite convincing evidence that there was a real problem with students declaring bankruptcy to get out of their loans.[0] On the other hand, having our bankruptcy system not apply to a meaningful portion of U.S. lending does create some incentive problems, like the fact that lenders have no incentive to make sure you'll be able to handle repayment, so you can take out huge student loans and find out at the end you have earned a worthless degree and that it will be massively difficult or nearly impossible for you to repay the loan.[1] [0] For example, https://www.gpo.gov/fdsys/pkg/CHRG-111hhrg52412/html/CHRG-111hhrg52412.htm https://www.gpo.gov/fdsys/pkg/CHRG-111hhrg52412/html/CHRG-11...: Currently, a debtor may discharge student loans in bankruptcy only upon establishing that repaying such loans would impose an undue hardship, but this has not always been the case. Prior to 1977, student loans were automatically discharged in bankruptcy. Perceived abuse of the bankruptcy system, as opposed to any real abuse, drove Congress to change this state of affairs. A 1976 GAO report had found that less than 1 percent of all federally insured and guaranteed educational loans were discharged in bankruptcy. In other words, no abuse. [1] For example http://law.emory.edu/ebdj/content/volume-32/issue-1/comments/non-dischargeability-private-student-loans-looming-crisis.html http://law.emory.edu/ebdj/content/volume-32/issue-1/comments...

discodave 8y ago
I should be clear that I wasn't trying to argue that the laws around student loan debt are just, or fair. I'm just saying that one of the alleged justifications for the current state of affairs is that the difficulty of discharging student debt leads to lower interest rates.

Fomite 8y ago

If I go into debt after a major medical crisis and then declare bankruptcy, the bank can't repossess me being alive.

dragonwriter 8y ago

> Once you get an "education", you can't exactly have another company repossess that from you. That's true of all unsecured debt (hence, “unsecured”), not a special feature of education debt that justifies treatment different than general unsecured debt.