[brundolf]

I was with you until the last line. It takes either incredible ignorance or incredible callousness to suggest that the crushing, impossible-to-pay debt hanging over tens of millions of Americans is a less of an immediate problem than web surveillance.

[SpaceRaccoon]

Loans should not be federally guaranteed. Let them default.

[xyzzyz]

They shouldn’t, but it’s too late, they already are. If they default now, it will be one of the most regressive wealth transfer in history, with tens of millions of college graduates, most of whom having good jobs and no problem paying off their student debt (which on average is on the order of a price of a good new car, which plenty of college graduates do draw additional loans on) being the beneficiaries. It would be horrendous policy built upon a terrible one.

[amanaplanacanal]

Better to just allow those loans to be discharged in bankruptcy the way they used to be. The great majority would still be paid back, but those for whom it really is crushing would get relief.

[xyzzyz]

For those for whom it is really crushing there are plenty of relief available, most importantly income based repayment program. I simply don’t see why allowing bankruptcy, which is redistribution favoring college graduates, is needed.

[amanaplanacanal]

The same reason we allow other debts to be discharged. Unless you think that college loans should be privileged for some reason. Or unless you are against the idea of personal bankruptcy completely.

[xyzzyz]

College loans are privileged, because it’s unsecured debt that is issued to young people without any income or assets. I would be totally for discharging student debt if it worked like, say, car loans — that is, if it was backed by private companies who can refuse extending credit to people whom they judge are unlikely to pay it back, and if upon bankruptcy, the degree is “repossessed”, i.e. records of attendance are scrubbed, and the bankrupt debtor is not allowed to claim they had held that degree under criminal penalties. Then sure, discharge student debt, I don’t care.

However, in the current arrangement of federally backed student loans, the incentives are completely misaligned. The taxpayers are shelling out tens of thousands of dollars to fund ever-more-expensive universities, which can keep jacking up the prices because there will always be feds who’ll write the check with few questions asked. Then, if you could just discharge it in bankruptcy, why wouldn’t just everyone do it first thing after graduation? Sure, you’ll have mangled up credit score for a few years, but for most people it’s worth the tens or hundreds of thousands of dollars saved, and if everyone does it, credit score companies will have to account for it to keep the scores informative, so it likely wouldn’t even cause any problems for you at all.

[Can_Not]

Yeah, that curveball just seemed extremely partisan, divisive, off-topic, possibly with intent to derail.