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by eli_gottlieb 2379 days ago
Right, so the difference here is that you can be foreclosed on, and the bank takes your house. You can even go bankrupt when you lose your house.

But you can't get out of student loan debt via bankruptcy, nor lose the education. I figure the banks figure they're going to be fine, because rather than the SLABS market collapsing, it'll just suffer a correction: the enforced debt peonage of making payments all one's life will ensure those "securities" represent (forcibly and fraudulently extracted) income streams.
1 comments
apatters 2378 days ago
Except that all of those angry debtors can vote, and elect representatives who change the applicable laws. So one way things are different this time around is that government action could precipitate events in unpredictable ways.

Remember Bernie is talking about straight up forgiveness: the debt just disappears. He probably won't be the next President but student loan reform (including existing loans) is a hot topic for many candidates.

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sokoloff 2378 days ago
Any forgiveness is likely to be executed by the forgiving entity paying off the loans.

The federal government is not going to use a pen to steal trillions of dollars from lenders holding contracts for repayment. That’s a banana republic action.

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vonmoltke 2378 days ago
The federal government is the one holding all that debt, so that is exactly what is going to happen.
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sokoloff 2378 days ago
There is a high 8/low 9 digit inventory of private student loans, not held federally.
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apatters 2378 days ago
If we're being cynical, I think they would forgive the debt and bail out any large financial institutions who are damaged by the act of doing so. It would be very in character.
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helen___keller 2378 days ago
> Remember Bernie is talking about straight up forgiveness: the debt just disappears.

I don't think this would harm the financial system. Debt held by the govt disappears, privately held debt is purchased by the federal government and then disappears.

I don't know the structure of student loan backed debt but this sounds the opposite of the cataclysmic: the government is guaranteeing they will "print" all the money needed to cover debt owed to 3rd parties, which should mean banks will do better than ever.

I'd be more concerned of cataclysmic outcomes if we changed laws in a way that fundamentally shift the risk profile of student debt as held by 3rd parties

> He probably won't be the next President

He IS a top polling primary candidate, but more to the point I don't think even a democratic Congress would pass a lot of his policy

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