I'm guessing that was a reference to the nondischargeability of student loans in bankruptcy. If student loans followed the usual rules for unsecured loans and credit remained as available as now, then almost any rational med students would borrow all they can, and then default upon graduation.
Lawmakers could have fixed this with a longer discharge period, or rules to forcibly shift the loans to income-based repayment, or something that gave the judge discretion to decide what value you got in exchange for that debt. Instead, they just made the loans impossible to discharge in all but the most extraordinary circumstances. "No downside" was an exaggeration, since you can't get blood from a stone; but student loans are certainly easier to collect, since you have the borrower's entire lifetime to squeeze.
ETA: And yeah, some (but not all) student loans are government-guaranteed but issued by private companies. There, the "lenders" were basically just brokers, taking zero credit risk and collecting a commission for any loan they could convince the guarantor to accept. The biggest program for that (FFEL) ended in 2010, not sure if any other exists.
Lawmakers could have fixed this with a longer discharge period, or rules to forcibly shift the loans to income-based repayment, or something that gave the judge discretion to decide what value you got in exchange for that debt. Instead, they just made the loans impossible to discharge in all but the most extraordinary circumstances. "No downside" was an exaggeration, since you can't get blood from a stone; but student loans are certainly easier to collect, since you have the borrower's entire lifetime to squeeze.
ETA: And yeah, some (but not all) student loans are government-guaranteed but issued by private companies. There, the "lenders" were basically just brokers, taking zero credit risk and collecting a commission for any loan they could convince the guarantor to accept. The biggest program for that (FFEL) ended in 2010, not sure if any other exists.