Colleges at the breaking point, forcing ‘hard choices’ about education

Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by bsder on Thursday April 30, 2020 @04:52PM (#23035978)

> Student loans would dry up overnight if they could be discharged at bankruptcy.

So? That's the marketing evaluating what the loan is actually worth.

Bankruptcy isn't a magic "Get Out Of Jail Free" card.

Your credit is trashed at a point when you might want to get married, buy a house, start a family, etc.

[ Parent | on HN ]

Re:Colleges at the breaking point, forcing ‘hard choices’ ab... by labcomputer on Thursday April 30, 2020 @05:34PM (#23036426)

> Bankruptcy isn't a magic "Get Out Of Jail Free" card.

Except that it is in this case. The order of operations is:

1. Take out student loan

2. Graduate

3. Get a job, spouse, mortgage, and new car

4. Declare bankruptcy to discharge student loans

5. Profit

The order of steps 3 and 4 are critical. Your car and house are collateral for their respective loans, so they don't go away when you declare bankruptcy. Since you have a house and new car, you typically don't need good credit for the 5-7 years it takes before people will start loaning you money at reasonable rates again.

This isn't some theoretical pattern. It's what people actually did. Especially doctors, because they could often qualify for nice mortgages while still in residency ("doctor loans").

[ Parent | on HN ]