3 ms·
My wife took private student loans, which at the time were forgivable in bankruptcy, as a hedge against future financial issues. She accepted a higher interest
by Ancapistani 6y ago
My wife took private student loans, which at the time were forgivable in bankruptcy, as a hedge against future financial issues. She accepted a higher interest rate to account for that.
… then the federal government retroactively made them non-dischargeable.
I mention this to highlight that changes in the regulatory environment don’t always favor the borrower, nor are there always concessions made to limit harm to the injured party.
- D13Fd 6y agoThat's also a great example of how discharge-ability and the potential for student loan forgiveness warps the actions of borrowers, and in an unfair way.
- oarsinsync 6y agoHow is it unfair if the loan came with higher interest rates to account for that? That’s exactly the point of how debt markets are supposed to work. Higher risk borrowers are more likely to default, so pay higher interest rates to cover the % that do. If as a borrower you’re willing to pay more for your debt to give you that option (and quite frankly, all debt should be this way. There’s no debt an LLC can’t write off, why is there debt individuals can’t write off?), why is this bad?
- fortran77 6y agoOne "unfair" thing is generally when there's a mass "loan forgiveness" program (like there was for Mortgage Debt in 2008) borrowers are exempted from considering forgiven debt as income. That's unfair to the rest of us taxpayers.