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[quote=Anonymous][quote=Anonymous]-Newly-issued private student loans should be dischargeable in bankruptcy.. otherwise banks will keep on lending to ANYONE, without analyzing ability to pay.  Didn't turn out well for housing market.

-Young, starry-eyed students shouldn't be put in a position of getting themselves $100,000 - 200,000-300,000 in debt for degrees that can't possibly land them a job that will pay those bills.. especially when NO bank would grant them that credit to buy a house or for any other reason.  They inevitably regret it, would spend decades unable to buy a home or have children, and then become Occupy protestors.  This seems like predatory lending, worse than a payday loan.

-The taxpayer should not be on the hook for federal loans that are unlikely to be repaid.  [/quote]

You know, it's funny, I came to the opposite conclusion a while ago on this board while starting from the same premises (that you don't want kids to get huge loans for degrees that won't pay off and you don't want taxpayers to be on the hook either) and a bunch of people accused me of being a bank lobbyist, which is about as far from reality as possible.

The real question is: who has what incentives? If the students think that they need that degree and  that   if everything falls apart, they can always walk away from the loans in bankruptcy, while the lenders are ultimately passing the buck to the government (my understanding is that almost all the debt is backed by taxpayers at this point and lenders are just intermediaries), then you don't want to make them dischargeable in banktrupcy.

If the lenders actually bore final responsibility for the loans they make, then I'd agree with you. But I don't think that's the case.[/quote]

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