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No one is forced to take out any kind of debt; the issue is that typical debt is secured by an asset or dischargeable in bankruptcy. If you make severe mistakes
by jseliger 7y ago
No one is forced to take out any kind of debt; the issue is that typical debt is secured by an asset or dischargeable in bankruptcy. If you make severe mistakes with credit cards, you'll declare bankruptcy and the credit card companies will suffer. This imposes some market discipline on lenders. Banks are (ideally) not eager to make mortgages to people who are likely to become insolvent. Yes, I know about the Great Recession and this was part of the problem.
Severe student loans can be incurred starting at age 18 and aren't dischargeable. That's why they're uniquely pernicious. It's typically not possible to fuck up your financial life for decades via most debts, but it is with student loans. We don't know ourselves and the future is unpredictable, and that's why bankruptcy exists. Taking it out of the equation empowers predatory lenders and institutions.
- mattm 7y agoYes this is the main problem. People like the parent commentator look down on young students for being irresponsible when the other side of the deal is even more irresponsible. Lenders are incentivized to loan out as much as possible since they know they will get paid back.
- DoofusOfDeath 7y ago> No one is forced to take out any kind of debt In practice, I'm not certain this is true. In Massachusetts, a parent can be forced to pay for his over-18 child's college education: https://www.familyneedslaw.com/blog/2019/03/massachusetts-parents-can-be-ordered-to-pay-college-expenses.shtml https://www.familyneedslaw.com/blog/2019/03/massachusetts-pa... I'm unclear as to whether or not the court can force a parent to go into debt to accomplish that.