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by horsawlarway 127 days ago
Not really sure why this is getting downvoted.

I don't really think we need to forgive student loans - I think they should absolutely be dischargeable through bankruptcy, though.

Bankruptcy isn't a "get out of jail free" card - it puts a huge burden on a student relatively soon after graduating that makes it harder to start a family or buy a home. So it incentives are still aligned for the students taking the loans.

But the option that a student defaults brings some real light and transparency into a loan system that just feels wildly disconnected from reality right now. If a student can't pay the loan back with the job options in the field and is like to default... don't issue the loan.

I think it's absolutely abusive that student debt can't be discharged, and is pretty heinous as policy.
2 comments
rootusrootus 127 days ago
Yeah it's pretty amazing that we have loans which you can never escape and yet have high interest rates in spite of that. If I cannot declare bankruptcy, then at the least the interest rate should be 0%, appropriately reflecting the risk.
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LorenPechtel 126 days ago
No.

1) Zero risk does not mean 0% interest. True zero risk should have the same yield as treasuries.

2) No bankruptcy does not equal guaranteed payment. Some will die without having repaid.

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AnimalMuppet 126 days ago
Only if treasuries are truly zero risk. That may not be a valid assumption anymore.
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TimorousBestie 127 days ago
> I don't really think we need to forgive student loans.

Neither do I. I was happy with the status quo ante Trump where many classes of public servant could get their student debts forgiven after on the order of ten years of service. (An imperfect program with too many disqualifying loopholes, but it was better than nothing. Now, almost no one qualifies.) The Overton window has foreclosed on that kind of solution to the problem, however. Even military personnel have been disqualified from attending certain schools as part of their meager education benefit.

> Bankruptcy isn't a "get out of jail free" card

Indeed. One’s mid-twenties are arguably the worst period of one’s life to live with damaged credit.

> I think it's absolutely abusive that student debt can't be discharged, and is pretty heinous as policy.

Absolutely, it needs to go.

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