> The rule around bankruptcy is basically a trade off to make the loans more accessible.
> No bankruptcy rule and many loans would never be made and the ones that would be, would have crazy high interest rates.
The government makes almost all of the loans (no other lender can make guaranteed loans any more) and the rates are set by law (and were even when the federal loan programs were open to private lenders); private student loans or
have crazy high interest rates and aren't made in large amounts, especially if you exclude first-party loans by shady schools. The rules don't induce third-party lenders to make accessible loans; even when those could participate in the federal loan program it was the federal guarantee, not the borrower being in the hook after bankruptcy, that was intended to induce private lender behavior, and with the federal guarantee.)
If college tuition cost around $500, that might work. But good luck finding somewhere which will provide $50k of unsecured debt to an unemployed 18 year old.
