Where “scratch” is having to spend the next 7 years with a bankruptcy on your credit record so that you have difficulty getting any credit.
I’m not saying that I would do it or that people making that choice would have thought through all the consequences. Many 22 year olds make a lot of bad decisions. They can drink but not rent a car. I wonder why?
I was just suggesting that the student loan rules may have taken into account the possibility that too many such cases may have occurred. I can see that logic.
Do you have a better reason as to why that rule is in place?
The problem I have with this argument against forgiving student loan debt is rather simple. It’s the only debt you can have that cannot be wiped clean by bankruptcy. And you gotta wonder why that is.
That’s not quite true. Student loan debt can’t be wiped clean by bankruptcy while retaining ownership of the asset in question. The same is true for mortgages, mortgage debt also can’t be wiped clean by bankruptcy while retaining the asset. And same for cars. And most other assets.
Student loan debt can’t be wiped clean by bankruptcy while retaining ownership of the asset in question.
What an asinine argument. The asset in question is presumably the education. Do you suggest a lobotomy before the student loan debt can be erased in bankruptcy? Or perhaps just carving out the relevant bits of the brain?
What about general unsecured loans? Should those be able to be wiped out in bankruptcy? After all, its kind of hard to tie those loans to any asset either.
I do understand that a student loan is a bit different from most other loans. But to never be able to discharge it doesn’t make sense.
Personally, I’d make them non-dischargeable for something like 10 years after graduation (or the end of studies for those who don’t graduate). That gives sufficient time to put the education to use and earn the money needed to pay back the loan. And it would give the ability to provide relief to those who simply can’t pay back their student loans.