[HPsquared]

Student loans aren't your standard private sector loan though. They are a special legal category, which is why they can't be discharged in bankruptcy. All the usual borrowing standards don't apply either. No commercial lender would give that size of loan to an 18 year old with no collateral. The collateral is effectively a claim on the person's future earnings. What a crazy contract to have young people routinely pressured into.

[ourmandave]

You can discharge them through bankruptcy but it's not automatic. You have to prove repayment would cause "undue hardship".

https://studentaid.gov/manage-loans/forgiveness-cancellation...

[whatisthiseven]

What that page doesn't tell you is the precedence courts have set for those tests is so high that nearly no one qualifies for them, and thus it is the case that the loans are virtually impossible to discharge even if it means losing your home and all your possessions.

[HPsquared]

Interesting, but that seems to be for exceptional circumstances ... A few hundred cases per year apparently. But maybe this route could grow substantially. Interesting reading-

https://www.ablj.org/bridging-the-student-loan-bankruptcy-ga...

[Spooky23]

lol no. They were designed initially so that law and medical students wouldn’t be able to skip out on loans as was common early on.

There are the paths out: repayment, death and fleeing the country.

[ClumsyPilot]

> The collateral is effectively a claim on the person's future earnings

Back in the Russian empire a person could buy themselves out of serfdom if they could come up with the money… which was difficult for obvious reasons.

And this feels like a modern reincarnation of the system.

It’s categorised as ‘ Unfree Labour’

[nekusar]

Its the same too with renouncing citizenship.

If you have federal student loans, you are trapped as being a US serf. And with usurious interest rates, you will never be able to buy your freedom.

[toast0]

Are federal student loans at usurious interest rates?

From what I could find [1], the caps look fairly reasonable. The unaffordability seems to come from the financed amount.

[1] https://mohela.studentaid.gov/DL/resourceCenter/DLInterestRa...

[selimthegrim]

These are for government loans. I really wish my private loan north of 13% was capped.

[toast0]

I don't think private loans are federal loans?