5 ms·

Is it actually better for students that they can't default on their loans? I usually hear it the opposite way, that even after bankruptcy proceedings you still

by esrauch 12y ago

Is it actually better for students that they can't default on their loans? I usually hear it the opposite way, that even after bankruptcy proceedings you still have your student loan debt following you around.

dnautics 12y ago
non-dischargeability was probably a 'good intention' gone horribly wrong. Because on the plus side, the student's APRs are lower because the lender can be guaranteed to own a portion of the student's labor for the specified term unless they die. And because the higher educational institutes really ought to be entitled to continue extracting their students' value.
- justizin 12y ago
  the problem is that higher education is the only product aside from used cars in the US which can be sold without an implied warranty of merchantability.
  - sitkack 12y ago
    Cobalt Phd.
  - dnautics 12y ago
    how would you suggest structuring this warranty?
dustcoin 12y ago
Students do default on student loans, even though they cannot be discharged in bankruptcy. 14.7% of students who started repayment in 2010 defaulted within 3 years. (Source: http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr.html http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr.html) If the government did not guarantee and subsidize the loans, interest rates would be higher and/or banks would be more careful which students they lent to.
- sitkack 12y ago
  Which is fine, because as it stands the feedback loop is broken. Look at what you can spend yourself into at the University of Phoenix. Many are not much better.