the problem with education in this country

[ua_guy]

You're also leaving out my point that paying other people's debts only tells them they can spend all the money they want and someone else will foot the bill.

The counterpoint is obvious, at least to me, but I'll state it anyway. Most people repay their debts and will continue to do so, and this will not change that. The government is hanging on to bad debt here. Any business in its right mind would move on.

[disneysteve]

For those who oppose student loan forgiveness, what would you think about the law changing to allow student loans to be discharged in bankruptcy (just like every other type of debt)?

[kork13]

For those who oppose student loan forgiveness, what would you think about the law changing to allow student loans to be discharged in bankruptcy (just like every other type of debt)?

I would call that a start. If private banks have to face the risk of students bankrupting their SL debts, it'll help to (slowly) reduce the ample supply of SL cash floating through the higher education system.

[srblanco7]

For those who oppose student loan forgiveness, what would you think about the law changing to allow student loans to be discharged in bankruptcy (just like every other type of debt)?

I think this would be an important first step. Can't "solve" the student loan problem if we continue with the current approach.

[james.hendrickson]

I think this would be an important first step. Can't "solve" the student loan problem if we continue with the current approach.

Totally agree.

[ua_guy]

I'm not sure I see a difference between having SL debt discharged through bankruptcy versus having it forgiven one time. The result is the same - the lender can't recover, and someone is failing to repay a contractual agreement.

But allowing SL debt to be discharged in BK is a good start. If lenders are going to charge interest, then they shouldn't get to have it both ways - guaranteed liability AND charge ridiculous interest because the interest charged is supposed to cover the risk of the loan in the first place. The rules for private servicers of federal loan debt are way too loose anyway. They stand in the way to make money.

[kork13]

I'm not sure I see a difference between having SL debt discharged through bankruptcy versus having it forgiven one time. The result is the same - the lender can't recover, and someone is failing to repay a contractual agreement.

Two big differences:

1) The debt forgiveness being proposed is for federal student loans, which are already the most reasonable (limited dollar amount & interest rates). Private lenders would be completely unaffected. And when it comes to SL's, I see little difference in the corporate behavior between the lenders and the pharmaceutical companies that have pushed opioids far too strong for far too long to far too many people (thus the settlements amounting to millions & billions). Similarly, lenders need to face their own responsibility for the crisis that they've eagerly helped to fuel.

2) Accountability. With debt forgiveness, it's not so much as a cross-eye glance or "do better next time." With bankruptcy, an individual has to live with the choices that drive them to that point. You can't learn a lesson without any motivation to change one's behavior, and it makes it less likely that they'll be able to make the same mistake in the future. By making SL's dischargeable in BK, it gives drowning people a way out while placing both borrowers & lenders in their proper positions of footing the risk & responsibility for their loans.

[srblanco7]

By making SL's dischargeable in BK, it gives drowning people a way out while placing both borrowers & lenders in their proper positions of footing the risk & responsibility for their loans.

With the (likely) outcome being more appropriate underwriting standards for the loans - which would hopefully result in "stop adding the problem" as an outcome. I'd be intrigued as to what this would do to college tuition rates which have soared as a result of readily available dollars from student loans.

[Fishindude77]

Adults signed up for these loans and had plenty of opportunity to read the terms including the fact that they are not forgivable through bankruptcy and how the interest rates would work. I struggle to find any reason why such loans should be forgiven.
Bankruptcy is already an easy out far too many have used to bail out of their responsibilities for various debts. Don't open the floodgates and encourage more of it.

[jenn_jenn]

Two big differences:

1) The debt forgiveness being proposed is for federal student loans, which are already the most reasonable (limited dollar amount & interest rates). Private lenders would be completely unaffected. And when it comes to SL's, I see little difference in the corporate behavior between the lenders and the pharmaceutical companies that have pushed opioids far too strong for far too long to far too many people (thus the settlements amounting to millions & billions). Similarly, lenders need to face their own responsibility for the crisis that they've eagerly helped to fuel.

2) Accountability. With debt forgiveness, it's not so much as a cross-eye glance or "do better next time." With bankruptcy, an individual has to live with the choices that drive them to that point. You can't learn a lesson without any motivation to change one's behavior, and it makes it less likely that they'll be able to make the same mistake in the future. By making SL's dischargeable in BK, it gives drowning people a way out while placing both borrowers & lenders in their proper positions of footing the risk & responsibility for their loans.

Very nicely stated.

So my thoughts are…what Kork said.

[kork13]

Two big differences:

1) The debt forgiveness being proposed is for federal student loans, which are already the most reasonable (limited dollar amount & interest rates). Private lenders would be completely unaffected. And when it comes to SL's, I see little difference in the corporate behavior between the lenders and the pharmaceutical companies that have pushed opioids far too strong for far too long to far too many people (thus the settlements amounting to millions & billions). Similarly, lenders need to face their own responsibility for the crisis that they've eagerly helped to fuel.

2) Accountability. With debt forgiveness, it's not so much as a cross-eye glance or "do better next time." With bankruptcy, an individual has to live with the choices that drive them to that point. You can't learn a lesson without any motivation to change one's behavior, and it makes it less likely that they'll be able to make the same mistake in the future. By making SL's dischargeable in BK, it gives drowning people a way out while placing both borrowers & lenders in their proper positions of footing the risk & responsibility for their loans.

I actually forgot one more:
3) What happens in 10-20 years when the next batch of suckers....I mean students.... run up SL balances that make today's numbers look like a drop in the bucket? Because with the availability of nearly unlimited SL funds, college tuition has been ballooning dramatically faster than inflation (tuition >10%/yr vs. 2-3% overall). So future students will be in the exact same pickle. Will the answer then be yet another "one-time" debt forgiveness, because we realize once again that we've screwed our children's future just as badly as we did for ourselves?

Any "one-time" SL debt forgiveness without significant reform is only putting a band-aid on arterial spray. It'll do almost nothing & the patient's dead regardless. Graphic image (sorry), but I think it conveys the gravity of the problem nicely.

[QuarterMillionMan]

53 yr old teacher with $303,000 in SL says $10,000 "wouldn't even be a drop in the bucket."

Teacher With $303K Student Debt Says Biden's $10K Relief Plan Not Enough (businessinsider.com)

[Fishindude77]

Two big differences:

1) The debt forgiveness being proposed is for federal student loans, which are already the most reasonable (limited dollar amount & interest rates). Private lenders would be completely unaffected. And when it comes to SL's, I see little difference in the corporate behavior between the lenders and the pharmaceutical companies that have pushed opioids far too strong for far too long to far too many people (thus the settlements amounting to millions & billions). Similarly, lenders need to face their own responsibility for the crisis that they've eagerly helped to fuel.

Can't pin this on the private lenders. The private lenders would have never gotten involved had not the government made these loans non-forgivable in bankruptcy.
Just another example of one more area the government should have kept their nose out of.

[kork13]

Can't pin this on the private lenders. The private lenders would have never gotten involved had not the government made these loans non-forgivable in bankruptcy.
Just another example of one more area the government should have kept their nose out of.

Totally true. The government created this problem itself by incentivizing SL issuance. These loans are basically risk-free for lenders, so they're a fantastic opportunity for making profits.

[jenn_jenn]

Can't pin this on the private lenders. The private lenders would have never gotten involved had not the government made these loans non-forgivable in bankruptcy.
Just another example of one more area the government should have kept their nose out of.

Can I just add clarity that we can’t pin this *entirely* on the private lenders? The government shouldn’t have made these loan non-forgivable and private lenders shouldn’t have been allowing students to take out hundreds of thousands of dollars in loans to those that can’t afford it.