[jakebol]

Subsidized rates are ~5-7%. I know some of my sisters private loans are higher than 7% (I think somewhere around 10%). My parents gave her absolutely terrible advice about taking on the loans that she did, the millennial generation needs to be told the truth about the real life implications in servicing that much debt.

https://studentaid.ed.gov/sa/types/loans/interest-rates

[mhneu]

And the debt is nondischargeable in bankruptcy. It's a societal failing that we're letting people take on this debt.

Anyone who takes on debt like that is increasing the risk to their lives. Sure, if everything follows the mean - good job, good health, good relationships - people on average come out ahead after an expensive education. But the downside risk is amplified. Get sick, and there's nowhere to turn and you're stuck servicing that debt for the rest of your life.

It's a problem that crosses party lines. Both finance firms and universities have played a role in setting this system up. But millenials have to vote in numbers and advocate for making student debt dischargeable in bankruptcy -- this is the whole social point of bankruptcy law dating back centuries, to reduce crazy downside risk to individuals.

[ac29]

If student loans were dischargable in bankruptcy, why wouldn't everyone go through bankrupcy proceedings after graduation? If you finance education with debt, you're virtually guaranteed to graduate with a negative net worth, and no real tangible assets worth seizing.

Income-based repayment plans already exist, limiting your payments to 10% of discretionary income, with full forgiveness after 20-25 years if any balance remains. "Servicing that debt for the rest of your life" is not a thing.

[anonymous5133]

You could always have them bankrutable and have strong anti-fraud rules. But i think overall it is a bad idea. It is better to just have percentage income repayment rather than bankruptcy.

No doubt about it if student loans were bankruptable then it would be ripe with fraud.

[derekp7]

Student loans discharged through bankruptcy should also include repossession of your degree -- that is, make it criminal fraud to represent your degree to any employer upon bankruptcy.

[anonymous5133]

I think we can start by cutting federal loan programs. If the programs have less money then it means less loans will be made and less debt.

[RhysU]

> And the debt is nondischargeable in bankruptcy. It's a societal failing that we're letting people take on this debt.

Houses, cars, businesses, etc. can all be surrendered. Knowledge cannot. A degree cannot. Why should it be dischargeable if the recipient cannot discharge the benefits?

[colorint]

Risk of borrowers defaulting is the entire ethical justification for lending with interest. Collateralization reduces the risk of the loan, but doesn't eliminate it; after all, cars lose value over time, and businesses may or may not be able to sell assets for enough to cover their liabilities. Indeed, the closest you get to eliminating the risk of a loan is having the federal government guarantee it, so...

[RhysU]

> Risk of borrowers defaulting is the entire ethical justification for lending with interest.

Ethics has little to do with it. The lender has money you want, and you pay them for the privilege of using that money for a while. Supply and demand.

One can't collateralize a mind aside from claiming a fraction of the attached body's output.

[anonymous5133]

Completely agree. I avoided going to an expensive college. Went to a cal state instead and still ended up getting a 50k/year job. Some of my co workers have 60-80k in loans still. It is soul crushing because they want to buy homes but cant because their debt is too much.