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Why are college loans some of the only kind that can be signed for by your parents, yet not dischargeable via bankruptcy?
by imwillofficial 5y ago
Why are college loans some of the only kind that can be signed for by your parents, yet not dischargeable via bankruptcy?
- chasd00 5y agoin the US college loans are backed by the federal government so there's minimal risk to the lender, that's why the interest rate is low. Remove the federal guarantee and they can be dischargeable in bankruptcy. However, then the interest rates go sky high (like credit card rate high) because now all the risk of the loan is being taken on by the lender with no federal backstop.
- imwillofficial 5y agoOr maybe they, you know, hand out loans based on ability to pay back like any other loan.
- NonEUCitizen 5y agohttps://www.tateesq.com/learn/student-loan-bankruptcy-law-history https://www.tateesq.com/learn/student-loan-bankruptcy-law-hi...