[BobaFloutist]

The reason that you can't (default) discharge student loan debt in bankruptcy is that your degree can't be seized and sold off, so there's a pretty weak incentive to not declare bankruptcy as soon as you're handed your degree.

[angmarsbane]

What if a degree could be seized? For example, what if bankruptcy courts could require a debtor to stop "representing themselves" as having a degree as a condition for discharging debt. If a court revoked a degree, it would effectively reset the graduate to the status of a dropout removing a significant amount of the degree's value (I know knowledge has its own value, but credentialism is a big part of a degree's value too).Universities already have the infrastructure to flag students. For example, many institutions withhold official transcripts or diplomas for academic fraud, moral infringements etc. Could this create enough of an incentive to pay back loans and not declare bankruptcy?

[BobaFloutist]

I don't think that would fly, since it would provide no benefit to the owner of the debt and would just be enormously punitive and feel pointlessly cruel.

It would be like if instead of a foreclosure they just took a bulldozer to the house, then salted the earth with asbestos and lead so nobody could ever build a house there again. What's the (acute) benefit in just destroying the value? Plus, it turns the four years into a complete waste of time, no matter how hard you worked to get the degree, just because you couldn't find employment after.

I know we're talking about tweaking incentives to make it not worth it to game the system, but this would also screw over people that found themselves in that position through no fault of their own, plus it would waste all the time and work of everyone that taught that person and contributed to their education (even though they got paid, people largely aren't in education for the cash).

I don't know, I think it would be too much of a bummer to work.

[DangitBobby]

When student debt becomes dischargeable, market forces will finally price degrees according to their actual economic value relative to the risk of poor returns. Currently, that price discovery is broken; the cost of a degree bears almost no relationship to its real-world payoff. No need for degree seizure to correct it. Lenders can decide for themselves which degrees lead to returns, which in turn provides degree seekers with actual financial signals instead of vibes-based "go into programming" propaganda from FAANG.