[robotcapital]

> Instead allow students to declare bankruptcy on student debt.

I'm curious what impact people think this would have. Or if there's any research on the subject. My initial reaction was that giving out more debt relief could only lead to more inflation. But on second thought I could see only a much smaller segment that is struggling with debt willing to go through bankruptcy. While I buy that that would be less regressive than the current proposed debt forgiveness plan, I don't see how this would affect inflation (or elections, for that matter) in any meaningful way.

[mc32]

Colleges and universities would hold the bag and would be more judicious about the prospects they’re willing to bet on. Right now they know they don’t lose.

[gausswho]

The majority of student loans are structured such that the US government makes whole any lender who has a student loan in default. It's argued by some that this incentivizes colleges to relentlessly raise tuition. They win either way.

[lotsofpulp]

This is not true. The Healthcare and Education Reconciliation Act of 2010 removed government guarantees for non government student loans.

https://en.wikipedia.org/wiki/Health_Care_and_Education_Reco...

> Ending the process of the federal government giving subsidies to private banks to give out federally insured loans. Instead loans will be administered directly by the Department of Education.[23]

Or course, the problem was and is the taxpayer funded loans with zero underwriting, so the root issue was never resolved, and hence why colleges continue to raise tuition since their customers continue to receive blank checks from the government. There should be zero taxpayer funded higher education loans.

If the people want to help students pay for education, then give them cash or give cash to the universities. The reason this is not politically popular is that it increases government expenses, rather than loans that muddy the higher education market and ultimately screw students and future taxpayers.

But excessively borrowing from the future to keep taxes down today and indebt certain portions of the population rather than providing non discriminatory assistance is par for the course.