How much student debt was cancelled for you or someone you know?

[kork13]

Simplify it by allowing student loans to be discharged by bankruptcy and whammo we'll either have less crazy lending or people will get to wipe it out. I think it would be a way to free market the loans. Banks won't just loan out money irresponsibly when they can't get a guarantee to pay it back!

Let's try that. Unsecured loans that can be discharged like CC hmm...

THANK YOU! That single change would make an incredible difference in multiple areas, mostly that the free-wheeling private SL money would dry up, and banks would have to be more deliberate about what they loan to people. The federal student loan program would still exist, and maybe could be expanded to allow 4 years of loans up to the amount of annual in-state tuition, to ensure that people still have reasonable access to reasonable options for going to college.... But those limits would also force people to be more deliberate about their choices.

[ua_guy]

An education isn't a physical asset that can be repossessed and auctioned if the borrower defaults. I think that may be one of the reasons why SLs can't be discharged in bankruptcy. However, the vast majority of people repay their student loans and they end up paying a LOT for them because the terms are so long and the interest rates aren't always great.

If that provision (no BK discharge) is removed, I too think it would take some sharkiness out of the private SL market. I like loan forgiveness through public service and other reciprocal arrangements--appears to be an equitable way to provide some relief. The scam schools need to go, too

[LivingAlmostLarge]

Yeah but Credit cards can be discharged by BK for people who don't have a physical asset. I think it's a scam that you can't discharge student loan debts. If you can do BK fo other unsecured debt then you can allow it for student loans. Now I"m not proposing people use BK but maybe lending would be reined in.

[Fishindude77]

Yeah but Credit cards can be discharged by BK for people who don't have a physical asset. I think it's a scam that you can't discharge student loan debts. If you can do BK fo other unsecured debt then you can allow it for student loans. Now I"m not proposing people use BK but maybe lending would be reined in.

This is the whole problem. Had Uncle Sam not gotten involved and guaranteed these loans as well as made them immune from bankruptcy you would have very few private lending institutions doing these loans. If they did do such a loan they would require collateral or a very good plan for repayment at a minimum. This would encourage the borrowers to really think things through beforehand and would probably curtail wasteful or unnecessary SL borrowing. At the same time, by making SL borrowing more difficult it should force the institutions to hold down prices and provide more economical education solutions.

Just one more area the government shouldn't have gotten involved in.

[ua_guy]

Yeah but Credit cards can be discharged by BK for people who don't have a physical asset. I think it's a scam that you can't discharge student loan debts. If you can do BK fo other unsecured debt then you can allow it for student loans. Now I"m not proposing people use BK but maybe lending would be reined in.

Much higher interest rate. Revolving credit.

[crazyliblady]

1 and 2) And a tornado could have taken a different path, too. Can't change the past.

3) No. This isn't a slippery slope scenario where we go "whatabout" everything. Literally none of that has been discussed as part of this relief.

I am not saying that I want someone to forgive my non student loan debt, like you said, it is a slippery slope and it is ridiculous. And I also know I can't change the past. I can't even change what's happening right now. But we can make better decisions for the future by students thinking really hard about how to pay for college without going into debt. If they go about it the right way, they could graduate with little to no debt and their future selves would thank them for it. I also think that financial aid counselors in college should be required to emphasize the need for scholarships before ever talking about loans. It should be a last resort.