Re:Grade Inflation at American Colleges and Universities
by analog31 on Thursday May 14, 2015 @08:16AM
(#9544632)
But it promotes the moral hazard of the bank offering you a loan when they know that the human capital is likely to be worthless.
Re:Grade Inflation at American Colleges and Universities
by dragonwriter on Thursday May 14, 2015 @12:46PM
(#9546105)
> You can't discharge a student loan in bankruptcy. This makes sense. If you borrow money to purchase a car or a home the lender always has the option of repossessing the goods as a last resort.
Non-secured debt of other kinds are generally dischargeable in bankruptcy, so that principal isn't generally applied outside of student loans.
You cannot legally repossess someone's human capital. So the current law is set to avoid the moral hazard of someone borrowing $100k in student loans and then declaring bankruptcy right after graduation.