>> Students should be able to discharge their student loans in bankruptcy.
No. Bankruptcy is touted as being an absolute last resort that destroys lives. That's not the case, particularly if you are young. It's better to file for bankruptcy if you believe you will not be able to pay off your debts within a few short years. If student loans could be dumped with bankruptcy, every student would be advised to file for bankruptcy before their first payment became due. Bankruptcy would become the norm for many 21-24 year olds.
Yeah, so what's the problem with that? If lenders don't like it, they shouldn't be lending out easy money for degrees that aren't going to result in the student paying the loan back within 5 years.
Also (you might like this proposal better), it would make sense for bankruptcy law to have a provision for student loans that you can't declare bankruptcy to dodge the loans within 5 years of graduation. Then only students with little hope of repaying the loans, and who have likely already defaulted, will actually declare bankruptcy.
The end effect I'm looking for is for lenders to think twice before lending money for student loans.
It's a delicate line to walk. If lenders thought twice before lending money for student loans, only the rich (ie: 1%) would be able to enroll in postsecondary education. It might just be a lose-lose scenario for the 99% when college and university are expensive. We would all prefer that the population at large is educated, but when that education doesn't guarantee success in a career, who should pay for the failures?
Now I somewhat understand the few countries who offer "free" education (ie: funded by taxpayers). The incentive should be to offer free education for degrees that practically guarantee employment benefiting society. If you major in something widely considered useful, enjoy your free ride. If you prefer to major in something wishy-washy as far as society is concerned, you can pay for it yourself. Such an ugly compromise. :/
No. Bankruptcy is touted as being an absolute last resort that destroys lives. That's not the case, particularly if you are young. It's better to file for bankruptcy if you believe you will not be able to pay off your debts within a few short years. If student loans could be dumped with bankruptcy, every student would be advised to file for bankruptcy before their first payment became due. Bankruptcy would become the norm for many 21-24 year olds.