Off-Topic

If the bank did not have to worry about a default, since Student Loans are exempt from bankruptcy, then they would be forcing the student loans down people's throats. Which is what is happening, and, IMO, is one of the forcing agents in the vicious cycle of increasing tuition/increasing loans.

The problem is that there is no good collateral for a student loan. If someone defaults on it, then you can't really take back their education.

Either you take the risk away from the lenders (what we have now), and face an escalating bubble of tuition/debt, or you choose a system in which only those who can truly afford it can get educated (secured loans/paying in cash).

What? The reason it cost 100k is because the schools know how easy it is for people to get loans so they jack up the tuition prices.

Just part of the problem....

Universities are also getting themselves into a bit of trouble due to other forms of government support. Late in the 90s when the Federally sponsored research budgets were going through the roof (namely at NIH), Universities were using this as a subsidy on extensive capital projects....basically going on the assumption that they could maintain the high levels of external funding in order to keep paying for those projects. Build the nicest labs money can buy, attract the best faculty in the country and keep the grants flowing in. Well, that cash cow is drying up, and schools are left looking for other ways to keep paying for the loans on these buildings....tuition and fees go up.

If you want an advanced and growing economy, then you need an educated populace. And while there are alternative means of getting funding, they can not meet the demand of the populace.

I know that the common adage around here is, "The world needs ditch-diggers, too," but that is a fucking lie. The world needs people to design, build, and maintain ditch-digging machines, which are thousands of times more productive than their human counterparts(hello, GDP). And if you really want to get technical, you need people to design, build, and maintain the machines that build the ditch digging machines.

How do you create a system that can maintain education for steady economic growth? I agree that the system we have now is unsustainable, and loan forgiveness is not the way.

So how are all of the people going to fourth tier schools at 20k per year for a BA in Communications so that they can go work the phones at a menial office job helping to design, build, and maintain ditch-digging machines? And do you really need a four year degree to maintain a ditch digging machine? Wouldn't a two year vocational program that teaches you how to weld without inhaling asbestos be enough?

That's a product this problem, though. If there weren't so many useless degrees floating out there, that standard woudln't exist.

Yeah, these loan issues ARE the cause of runaway tuition.

I know I already responded to this, but here are some more thoughts: we're sending more kids than ever to college, but our populace isn't getting more educated. For so many kids now college is just a four year socialization program. They leave college a little more mature than they were at the end of high school and possibly with a few more/better honed skills, but nothing worth the cost and the time they put in. And I don't think that the socialization is something that wouldn't occur outside the college environment anyway. I'm generalizing of course because there are plenty of people across the spectrum of majors for whom college is a great benefit. But just because more and more people are getting pieces of paper with "B.A." or "B.S." on it doesn't mean our populace is more educated.

LOOOOOOOOOOOOOOOOOL if this gets passed. i pay $400/month in undergrad student loan and this is still ridiculous. continue to bail people out and they'll never learn.

Not everyone would do that. Government loans are actually very good about working with people. You'd get say maybe 10% of people Declare BK to get from under their student loans. probably anywhere from 500 mil to 1 billion dollars of discharged debt. this is spread out over all the various student loan carriers. They take a loss but nothing that puts their business in jeopardy and they clean up their lending practices afterwards.

Make a window where current borrowers can choose BK say 2 years. Then you make laws forcing lenders to get more documentation on costs from the school and you don't allow off campus housing to be included as something you can borrow for.Have no interest accrue while the student is actively in school. This ensures people are not borrowing more than needed, while still providing the flow of money necessary to go to college. The problem now isn't the loans themselves it is the size of the loans and how the are distributed and how little if any underwriting is done to qualify for whatever amount you want.

i'm not sure you understand how much money people have to borrow for education in the current environment. LOl at anyone with 200k in unsecured student loans deciding against discharding immediately, considering the have no assets whatsoever.

free money! not like you can afford to buy a house for another 7 years, anyway.

I said a window for current borrowers. And no not everyone would declare BK. Not everyone wants bad credit for 7 years. Not everyone has 200k in debt.

You don't want to discourage education just make sure that the system is not abused by the banks and schools which it is. they have no reason to not give anyone who applies right now. It is bad business to lend money that way but with no consequences they can't be held accountable for their actions.

Would you lend 100k to 100 bums if you knew you would get the money back with 7 to 10% interest? I would for sure.

I love the poo pooing of the idea by the way just because it wouldnt work yet not offering any other reasonable suggestions to fix a broken system that IS 100000% a drag on the US economy and society as a whole.

I think you overestimate how many people would declare BK to get out of their student loans.