3 ms·
Who is paying for this? The government doesn’t own the debt, it just insures the loans. The schools don’t own the debt. Some bond investor does. Are they paying
by jl2718 6y ago
Who is paying for this? The government doesn’t own the debt, it just insures the loans. The schools don’t own the debt. Some bond investor does. Are they paying for it? Are they taking a loss, or is this a giant payday for the high-risk tranche, as if nobody defaulted on these super-high-risk loans, giving these shady school bonds the best returns in the business. When the government intervenes, the markets stop working. If the schools failed the students, and the government doesn’t bail them out, they’ll default and nobody will buy loans from the school. Problem solved.
- resfirestar 6y ago>The government doesn’t own the debt, it just insures the loans Federal Direct Loans are in fact owned by the government. This forgiveness does not apply to the pre-2010 FFELP loans that you're describing.
- jl2718 6y agoThank you. So are those schools still eligible to sell us more bad debt? I do not consent to this.
- kaminar 6y agoWhy aren't the schools directly responsible to reimburse the student or lender? This should not be "forgiveness", but similar to a chargeback, plus a fine and possible imprisonment.
- runawaybottle 6y agoWelcome to nanny state.
- TheCoelacanth 6y agoThe schools would be responsible if they still existed. It's exactly like a chargeback. The credit card company pays you back and then is responsible for getting the money back. You don't have to go after the merchant directly.