[MisterBastahrd]

A student loan default is not the same as a typical loan default: the government will start by taking whatever tax returns you get, and follow up by garnishing your wages. Fortunately, there are ways to get out of default status that can wipe your delinquencies off your credit report as long as you begin and continue to pay on time.

There would be very few people who qualify for student loans if we treated them the same as traditional loans, and virtually all of them would be the children of the wealthy or upper middle class.

[jelveh]

IMO they should default just like typical loans. These student loans wreak havoc with the lives of those that cannot pay them back - best example are doctors that are not allowed to practice anymore because of their student loan delinquencies.

> There would be very few people who qualify for student loans if we treated them the same as traditional loans

True, but that is not the problem - the problem is that college and education costs have risen almost exponentially. This problem will certainly not be solved by pumping massive amounts of bad loans into the bank accounts of already overpaid colleges.

[zanny]

In addition, there is supply and demand at play. If the free handout money suddenly dried up, some schools might cut back on the 50,000 square root gyms and renovating every other building every year, but they would still need to fill their classrooms and empty seats is just wasted opportunity for them.

The prices would drop. Less people would be able to get in college, absolutely, but those people are the ones most likely to graduated with 50k+ in debt they can't fathomably pay off, especially when they get degrees outside STEM.

The only downside I see is that right now, there is a strong sense of scholarly meritocracy going into the college system because, since usually it is just trading loans for grants and scholarships, you get the peak number of people applying - if some people are locked out for financial reasons, and they can't get the scholarships to fund an entire education, they just end up never going, even if they have great potential and discipline.

But in the end, college is a rigged market, just like telecom, oil, banking, etc are right now. There is a billion dollar industry invested in keeping the status quo in check, and any changes to stafford loan policies inherently have to come from the federal level due to their nature, and those are the most easily bought politicians of them all. I don't see the situation changing any time soon for that reason.