| Can I try to change your opinion? Thousands of people are filing for bankruptcy every day which – by implication – are getting a break on loans that you would otherwise pay. The issue is where debtors, who cannot presumably discharge their defaulted student loans in bankruptcy, begin to lose their savings, investments, and ability to stave off financial dependency on the government and become financially dependent on government programs now and into their retirement. By saying that since you were able to pay your loans in 2018 and therefore most other people should be able to pay is like looking at any bad investment. If you allow people to remain indentured and fall into perpetual dependency on government programs (welfare, SNAP, Medicaid) due to their default or judgment-debtor status, the overall cost of that is projected to be much higher than if they could have been eligible for a partial or full discharge of the debt in 2018. A bankruptcy prevents a bank from collecting interest. A judgment-debtor on financial assistance from the government is taking far more tax dollars from you than the bank is getting from the tax write-off on the charged-off debt. Obviously, banks want their money, so they lobby for bankruptcy provisions to keep people indebted. They don't particularly care if the side-effect is the government demanding higher taxes from you to pay for government welfare programs. |
The fact is that someone that made poor life decisions is at high risk of doing so again, and their credit rating should permanently reflect this. Otherwise, the loan & bankruptcy system rewards people who go into bankruptcy at the cost of other, more responsible people who are trying to get loans at a reasonable interest rate.
Without this, abuse of the bankruptcy system to "wipe away" student loans would be rampant, and we'd just be kicking the can down the road in a new way again.