The non-dischargeability of student loans matters because it significantly reduces the lender's risk of taking a loss. Even if the student doesn't have the inco

The non-dischargeability of student loans matters because it significantly reduces the lender's risk of taking a loss. Even if the student doesn't have the income to service the loan debt within 5-10 years after graduating, the lender will still recoup their investment, with interest, if the person ever makes enough income to pay it down in their entire lifetime. And the lender is near the front of the line for collections (just behind things like the IRS and child support). So the only case in which the lender takes a loss on their investment is if the borrower dies before they can pay it off. In the aggregate this is a very small risk. Student loans are not all government loans, maybe 70% are Federal Student Aid loans. Both FSA loans and subsidized private loans are subsidized by the government, which only means that the government pays the portion of the interest that would be due while the student is still in school. But it does not matter whether the lender is the government or a bank--the loans still carry an interest rate and are still non-dischargeable. The government cannot "just tax the rich" to pay off students' loan balances, the government does not work that way.