This is the "systemic fairness" argument, also known as the "moral hazard" argument. It's a fair point.
But my original point (I wrote the top-level comment to which you're responding) was this: Taking away ALL risk from the .edus and the lenders took away a really important part of downward tuition-price pressure. Easy student loan money means escalating student fees.
Who should "pay" if a schoolteacher can't pay her Salem State College loans? Good question. The college who charged so much ought to be on the hook, at least partly. The same goes for the lender, taxpayers in the community where she teaches, and she herself.
Who should pay if an investment banker can't pay his Harvard Business School student loans? Is it a different kind of question? That is hard to know in general.
Without the ability to bring student loans to bankruptcy court, there's no legal way to address these questions of fairness. That is not sustainable for student debtors, colleges, or the society at large.
I didn't mean that to sound as bitter as it probably did, but I'm glad I got the point across.
What's often left out of these amateur discussions we have is that education loans are non-collateralized debt. There's no asset of any value to repossess, and except for a few specialized programs where you owe a few years in the military or troubled school or free health clinic, not even a pledge of the very thing this loan is supposed to return value on, i.e. the person's own labor productivity. (And even in those cases, if the person reneges and suddenly becomes liable for the cost of their education again, they're still probably eligible for the same kind of forbearance and forgiveness programs being pushed for the more general student-loan indebted population.)
That's a (if not the) key reason this kind of debt isn't dischargeable.
But my original point (I wrote the top-level comment to which you're responding) was this: Taking away ALL risk from the .edus and the lenders took away a really important part of downward tuition-price pressure. Easy student loan money means escalating student fees.
Who should "pay" if a schoolteacher can't pay her Salem State College loans? Good question. The college who charged so much ought to be on the hook, at least partly. The same goes for the lender, taxpayers in the community where she teaches, and she herself.
Who should pay if an investment banker can't pay his Harvard Business School student loans? Is it a different kind of question? That is hard to know in general.
Without the ability to bring student loans to bankruptcy court, there's no legal way to address these questions of fairness. That is not sustainable for student debtors, colleges, or the society at large.