the same things as any other debt that is dischargeable?
On the other hand most other lending is collateralized, or even where not collateralized, the lender has a reasonable expectation of repayment or positive net worth.
Maybe the answer is you can't discharge it through bankruptcy for a certain number of years (e.g. 10?). But also, it shouldn't be 6 figures.
Certainly removing this protection would likely reduce the number and/or size of loans that are approved, and other risk reduction methods applied.
As it is , tuitions are being driven more by ability to pay than by costs, and ability to pay is being driven by this loan status. The system has terrible incentives for lenders and institutions.
If someone has a job they have no need to do so. If someone doesn't, then assuming that person went to school with the intention of getting a job afterwards, then it seems the school failed (either in educating the student or choosing to accept a student who is unlikely to accept a job).
It seems utterly bizarre to me anyone besides the university should be on the hook for this. If they're accepting the money, they should also be accepting the risk. It feels like nobody is willing to be held accountable for anything anymore and push the risk off onto those who are most vulnerable. This is a cancer in modern capitalism.
Employers don't care that your "has_degree" field is set to true in the college's database. They care that you demonstrated a sufficient level of IQ+conscientiousness by showing up and passing tests for several years, and in some cases they may care that you acquired relevant knowledge. Universities can't revoke either of those things because they're historical facts.
But a lot of degrees aren't like that, and a lot of places don't care which degree you have once you've had a similar job. Why would all employers buy into this? They can get someone with equivalent knowledge a little cheaper. It's a pain, but the graduate can certainly still launder their lack of degree into a job (or even just lie about it! people do that all the time, and are only sometimes caught).
The idea you're suggesting sounds something like an ISA: no cost upfront, X% of your income when you get the job. Those have other problems: universities will be incentivized to get the most employable students. They're also more expensive (since the downside risk is all on the university).
No, other unsecured loans that are neither federally-backed nor endowed with harsher bankruptcy discharge terms exist.
No way. That just means the taxpayer gets defrauded rather than the student, and the "school" still gets their money. It encourages the further growth of fraud.
The government should not guarantee loans for universities and programs of study that do not have a track record of financial benefit for the students.
The collective of taxpayers has a far larger collection of sticks than individual students.
That's literally what just happened now. The department of education is eating the loans. I may have misunderstood but is that not what the article is about?
Then lenders have an incentive to stop supporting useless $150k degrees, and borrowers can't declare bankruptcy immediately after graduation as an intentional tactic to dodge the debt.
Seems to address all major problems.
That means that by 30 you'd be free and clear. Most people don't need much credit before then anyway: the median age of first time homebuyers is 33. You'd pay a lot more for a car loan or a credit card, but you don't really need either of those things either.
Ok, but not masters degree right? Were the last 2 years of high school actually useful to you? Free college will just make it defacto required and waste people's time.
College tuition just needs to be paid for by the state without the lending facilities, IMO. As evidenced here the state just gets left with the bag anyways.