I feel like the elephant in the room on student loans, that I rarely hear talked about, is bankruptcy. When I graduated I dumped every penny I had into my stud

I feel like the elephant in the room on student loans, that I rarely hear talked about, is bankruptcy. When I graduated I dumped every penny I had into my student loans against the advice of my parents, peers, and financial advisors. Why? Because I was income rich and had a class of debt with variable rate interest that couldn’t be discharged in bankruptcy. There is a large % of Americans that can not afford to pay the accumulated interest on their loans every month. Every month the balance of their loan increases. They are bankrupt. I don’t think further subsidizing education is going to do anything. We don’t need to pay these loans off for them. We just need to let them declare bankruptcy again and discharge the debt. Right now, lenders have no incentive to minimize the balance of a loan. They’re nearly guaranteed a return, since the borrower will owe the debt for life. With access to unlimited credit by proxy of student debt, universities have little incentive to reduce tuition. If you allow borrowers to declare bankruptcy, I’m fairly confident the financial system will properly price in the true value of each degree program over night. They’ll have data on which degree programs from which universities have what placement rates at what salaries. They’ll weigh the expected lifetime return on that loan against the probability of it being discharged in bankruptcy. For many degree programs, I suspect students won’t be able to find a lender to cover the cost and universities will be forced to get costs back inline with the true expected return on the degree. I’m not in favor of student loan forgiveness. I just want to bring bank bankruptcy.