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Because you need to qualify for margin and the person who lent you the money agreed to lend it to you knowing that you could BK it. With student loans, the stud

Because you need to qualify for margin and the person who lent you the money agreed to lend it to you knowing that you could BK it. With student loans, the student usually doesn't have an income or assets so there needs to be more incentives to convince lenders to lend money.

throwaway2048 6y ago
I don't see how that reasoning applies to one, but not the other circumstance.
- jdminhbg 6y ago
  The answer is right there. Bankruptcy is legally a recourse of the credit extended by Robinhood, and it is legally not one of student loans. That may or may not be morally correct or good policy, but it's certainly the current state of the world.
  - tttp 6y ago
    Please don't drag the rest of the world in it, this student loan construction is certainly the current state of the USA
    - jdminhbg 6y ago
      The article is about something that happened in the US, so the situation in US law is relevant.
- stevens32 6y ago
  Student loans are cheap and available because they can't be defaulted on. If lenders don't get those guarantees, they won't want to lend at the lower rates or approve people as easily.
  - readams 6y ago
    The federal government guarantees almost all student loans. This is why they are cheap. Default exists regardless of whether the debt can be easily discharged in bankruptcy.
- yowlingcat 6y ago
  I agree with you, it's just that the one that I'd question would be the obverse. That is, student loans should either be dischargeable by bankruptcy or just not extended. If a lender can't make money in that asset class, they should fold. If that means it leaves the government the lender of last resort, that's how things should be. If that means the asset class implodes and it can't prop up a mispriced commodity, then so be it. Ironically, I get the sense that the implosion is probably going to come less from it being a previously bloated, overpriced commodity than for now being a perceivably fraudulent one -- IE, students are (justifiably) heated about having to pay the equivalent price of a home to take a glorified webinar from "Zoom University" -- and who can blame them, really? Now, back on topic -- what happened here was tragic. At some point, Robinhood is going to get actually sued by someone who expects peer level performance (IE TD/tastyworks/etc). It'll be interesting to see what happens there. And, it'll be interesting to see if they are sued (successfully) here. But, nothing is going to bring this young person's life back. How utterly harrowing. We hear so often about deaths of despair as a coded reference to opiate deaths. I know that suicide is a really major risk for startup founders when things go sideways (as well as gamblers), so seeing a new version of that makes me (despite the desensitization of the present moment) experience a new, unique kind of sadness. I hope this poor young man's soul rests in peace.

throwaway2048 6y ago

I don't see how that reasoning applies to one, but not the other circumstance.

jdminhbg 6y ago
The answer is right there. Bankruptcy is legally a recourse of the credit extended by Robinhood, and it is legally not one of student loans. That may or may not be morally correct or good policy, but it's certainly the current state of the world.
- tttp 6y ago
  Please don't drag the rest of the world in it, this student loan construction is certainly the current state of the USA
  - jdminhbg 6y ago
    The article is about something that happened in the US, so the situation in US law is relevant.
stevens32 6y ago
Student loans are cheap and available because they can't be defaulted on. If lenders don't get those guarantees, they won't want to lend at the lower rates or approve people as easily.
- readams 6y ago
  The federal government guarantees almost all student loans. This is why they are cheap. Default exists regardless of whether the debt can be easily discharged in bankruptcy.
yowlingcat 6y ago
I agree with you, it's just that the one that I'd question would be the obverse. That is, student loans should either be dischargeable by bankruptcy or just not extended. If a lender can't make money in that asset class, they should fold. If that means it leaves the government the lender of last resort, that's how things should be. If that means the asset class implodes and it can't prop up a mispriced commodity, then so be it. Ironically, I get the sense that the implosion is probably going to come less from it being a previously bloated, overpriced commodity than for now being a perceivably fraudulent one -- IE, students are (justifiably) heated about having to pay the equivalent price of a home to take a glorified webinar from "Zoom University" -- and who can blame them, really? Now, back on topic -- what happened here was tragic. At some point, Robinhood is going to get actually sued by someone who expects peer level performance (IE TD/tastyworks/etc). It'll be interesting to see what happens there. And, it'll be interesting to see if they are sued (successfully) here. But, nothing is going to bring this young person's life back. How utterly harrowing. We hear so often about deaths of despair as a coded reference to opiate deaths. I know that suicide is a really major risk for startup founders when things go sideways (as well as gamblers), so seeing a new version of that makes me (despite the desensitization of the present moment) experience a new, unique kind of sadness. I hope this poor young man's soul rests in peace.