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The fact that student debt cannot be discharged in bankruptcy is a blatant handout to universities and creditors.
The reality is: if people could discharge student debt in bankruptcy, a lot of 20 somethings would declare bankruptcy shortly after graduating.
This would be good.
The reality is: if people could discharge student debt in bankruptcy, a lot of 20 somethings would declare bankruptcy shortly after graduating.
This would be good.
This would put a lot of pain on creditors and, indirectly, universities. Creditors would then start to require people to have actual plans to get a job and study something useful, instead of just giving any 18-year-old who wants $200,000 that money.
This would mean that under-performing universities would have a harder time attracting students. Nobody is going to actually pay out-of-pocket - or a 25% interest rate - to go to Bumblenowhere University of State for a psychology or biz admin degree.
Yes, this would involve some short term pain on the creditors. But they have it coming. And it would involve some long-term pain on many universities and colleges. They certainly have it coming.
We don’t really have a real market in higher education in the United States today. Under this kind of model, you might actually see some real competition between universities on some metric other than student amenities.
