[aripickar]

The currently proposed legal framework for ISA's[0] seems like it would make ISA's dischargeable in bankruptcy, which would likely cause all sorts of issues with people signing up for them, using them to pay for tuition, and then immediately taking on as much delinquent debt to declare bankruptcy. That seems like a very perverse incentive for schools to deal with, since degree's are permanent but bankruptcy only stays on your credit report for a bit.

[0] https://www.forbes.com/sites/alisongriffin/2019/07/18/a-rare...

[psds2]

I believe the idea behind "income sharing" is that there is no demand for payment when there is not sufficient income. This makes it hard to qualify for bankruptcy, which is based on your ability to meet monthly debt obligations.

[journalctl]

Clearly default and a lifetime of ruined credit is the better option.

[pc86]

Literally nothing can result in a lifetime of ruined credit other than a lifetime of not paying your bills.

[PopeDotNinja]

Except student loans in the USA. They can't be discharged and the debt never goes away. Unpaid student loans will haunt you forever.

[pc86]

Like I said. A lifetime of not paying your bills.

[ac29]

> student loans in the USA. They can't be discharged and the debt never goes away.

Yeah, this is a common myth. Student loan payments in the US are limited to 10% of discretionary income for up to 20 years. If you make too little to pay off your loans on the standard 10 year plan you aren't just saddled with the debt forever.

https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...

[dragonwriter]

> Student loan payments in the US are limited to 10% of discretionary income for up to 20 years.

No, they aren’t. You can choose an income contingent repayment plan that is limited that way, but it's not the default and servicers steer people beat served by those plans away from them in favor of staying on the standard plans and taking deferments.

[journalctl]

Yeah, federal loans. Private student loans are basically usury.

[aripickar]

I'm saying that bankruptcy at 22 or however young is the much better option. You get it discharged before 30, and so it doesn't even impact the terms you get if you're trying to buy a house for a lot of people. If your options are bad credit for 7 years in your 20's, or 250k in debt, then everyone is going to choose the bad credit every time.

[MiracleUser]

maybe that's how it should be. Then kids wont get approved for 250k loans due to the risk and colleges will have to either ask for more money upfront (good luck), expect less students (not good for funding), or lower tuition.

[journalctl]

Bankruptcy is ten years now, for what it’s worth.