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Because then the normal thing to do would be to graduate, declare bankruptcy when you have nothing to lose in life because you are just starting out, work for 7

Because then the normal thing to do would be to graduate, declare bankruptcy when you have nothing to lose in life because you are just starting out, work for 7 years and you’re in the clear by your late 20s. Everyone would do it.

chihuahua 3mo ago
Maybe not everyone, but certainly lots of unethical people would do it, and there are lots of those. They'd post unbearably smug posts on LinkedIn about it too, calling everyone a sucker who didn't walk away from their $200k in student loans via bankrupcty. The justification for student loans being exempt from bankruptcy is simply that there is no asset to be repossessed. Car loans, mortgages, and HELOCs are different. Credit cards have very high interest to pay for the higher risk. I guess we could have student loans with 29% interest, would that be preferable?
- deleted 3mo ago
  [deleted]
- vasachi 3mo ago
  You could have free education, for instance. I think that would be preferable to any sort of student loans.
sethammons 3mo ago
> Everyone would do it. No, they wouldn't. Source: go back a couple decades, and student loans had low interest rates and were dischargeable in bankruptcy. It was an option. And, in fact, practically nobody did that.
- nxm 3mo ago
  Yes they would as there’d be no cost to them while all of them on the taxpayers.
  - sethammons 3mo ago
    Spherical cows. You are applying economic theory in a vacuum. Sure, we joked at the time we could just declare bankruptcy and keep the degree. However, show me sources showing that this was a real problem. It wasn't. Simply, people were not playing the game that way in any serious way. I am pretty sure I have never met a single person who declared bankruptcy purely to avoid a student loan.
    - dyauspitr 3mo ago
      People might not do it for a $15k loan (accounting for inflation back then), but they definitely will for $100k today. School was much cheaper back then.
- Aurornis 3mo ago
  > Source: go back a couple decades, and student loans had low interest rates and were dischargeable in bankruptcy. Student loans are still dischargeable in bankruptcy to this very day, but there are restrictions. Those restrictions started being introduced in 1978, so more than a couple decades ago.

chihuahua 3mo ago

Maybe not everyone, but certainly lots of unethical people would do it, and there are lots of those. They'd post unbearably smug posts on LinkedIn about it too, calling everyone a sucker who didn't walk away from their $200k in student loans via bankrupcty. The justification for student loans being exempt from bankruptcy is simply that there is no asset to be repossessed. Car loans, mortgages, and HELOCs are different. Credit cards have very high interest to pay for the higher risk. I guess we could have student loans with 29% interest, would that be preferable?

deleted 3mo ago
[deleted]
vasachi 3mo ago
You could have free education, for instance. I think that would be preferable to any sort of student loans.

sethammons 3mo ago

> Everyone would do it. No, they wouldn't. Source: go back a couple decades, and student loans had low interest rates and were dischargeable in bankruptcy. It was an option. And, in fact, practically nobody did that.

nxm 3mo ago
Yes they would as there’d be no cost to them while all of them on the taxpayers.
- sethammons 3mo ago
  Spherical cows. You are applying economic theory in a vacuum. Sure, we joked at the time we could just declare bankruptcy and keep the degree. However, show me sources showing that this was a real problem. It wasn't. Simply, people were not playing the game that way in any serious way. I am pretty sure I have never met a single person who declared bankruptcy purely to avoid a student loan.
  - dyauspitr 3mo ago
    People might not do it for a $15k loan (accounting for inflation back then), but they definitely will for $100k today. School was much cheaper back then.
Aurornis 3mo ago
> Source: go back a couple decades, and student loans had low interest rates and were dischargeable in bankruptcy. Student loans are still dischargeable in bankruptcy to this very day, but there are restrictions. Those restrictions started being introduced in 1978, so more than a couple decades ago.