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Why would anyone not immediately declare bankruptcy upon graduation under this model?

• smallnamespace 3y ago
  Because under this model nobody would make student loans.
• unmole 3y ago
  That doesn't seem to happen in other jurisdictions where student loans are dischargable in bankruptcy. Presumably people don't do that because having a bankruptcy on your record comes with consequences. It might even disqualify you from persuing certain careers.
  • eru 3y ago
    Well, the point of my suggestion was to discourage student loans. Exactly as https://news.ycombinator.com/item?id=36626179 https://news.ycombinator.com/item?id=36626179 points out.
• leetcrew 3y ago
  bankruptcy stays on your credit report for 7 years iirc. that's a long time to get denied (or approved with terrible terms) for credit cards, auto loans, mortgages, etc. if you have a reasonable student loan balance and a solid job offer (maybe you got a stem degree from a public university), it would still be much better to make payments and have access to other credit.
  • ChainOfFools 3y ago
    7 years of being unable to finance a home purchase and having to pay cash or a huge down payment to get a car, but in exchange my entire college education is free? Which is realistically a worst case scenario because there will always be someone who will try to figure out how to correctly evaluate the lending risk of people who are all equally handed free money and thus for whom the bankruptcy signal doesn't differentiate much. And as a fresh college graduate I'm necessarily the most mobile I will likely ever be in my life, with no kids yet and maximum disposable income relative to my needs at this time of young adulthood, thus unlikely to be able or interested in looking for a settle-down home anyway for several years? better believe I'll take that deal, or I would if I was back in that age group and stage of life.
    • leetcrew 3y ago
      it's only a no-brainer if you went to an expensive school or have low expectations for your career in your 20s. total in-state tuition for a four year degree is ~$40k. that's not nothing, but at least for me, getting that wiped out in exchange for no house, driving a shitbox to work, and even getting extra scrutiny on rental applications would not have been a good start to my 20s. if I went to a private school, wanted to be a teacher, etc, the calculus might be different.
      • ChainOfFools 3y ago
        Sounds like you have a pretty good bargain going wherever you are, because here in California as a resident, a four-year degree even at a state school like the UC is going to run 65k and that's without housing or expenses. Books, supplies, and lab materials alone can add another 12 grand to that over the course of a 4y degree. If you're going to pursue a master's then you can almost double that. And double it again if you're not a resident or are going to a private school of comparable repute. Obviously there's the option of a less expensive State School like one of the CSUS or a Cal Poly, as well as clever short circuiting of the tuition by taking Community College equivalents where possible but if you're going to get everything forgiven at the end of college then why bother with all that.