Why would anyone of sound mind be FOR more people not paying back their loans?
I don't think anyone is suggesting that everyone should be able to just run to the nearest courthouse and get their student loans discharged anytime they want. Of course people should pay back their loans.
But bankruptcy exists for a reason. In the case of private loans, I'm not sure why they deserve protection. You made an agreement with a bank just like you do with a credit card. The bank knew going into it that bankruptcy is a possibility.
Sure, but student loans are generally available with much lower credit requirements than many other types of loans, because there's no tangible asset in back of most of them to collateralize it. Sure, sometimes co-signers are required but I know in my situation that was not the case (things certainly may have changed in 20 years).
I agree that bankruptcy exists for a reason, but I also believe that the bar SHOULD BE high for relief or discharge of student loans in particular. These programs were put together to help improve access and flexibility for obtaining greater education, which in most situations should improved access to jobs with better wages, which then allows greater access to financially responsibility and independence, etc., etc. I realize that's not 100% accurate, but on the whole that's the idea.
If more and more people are getting out on the very front end of that equation, how does that bode for the future?
What I'm mainly being critical of in this post is the idea that @ 40% of people who try actually get relief or discharge (which sounds like a pretty high percentage) and how that might actually encourage more people to add to the denominator.
That's not good overall in the long term. It will ultimately increase the rates of the notes, make them harder to get and will absolutely have a spillover effect in terms of increasing the costs of the education (whether tuition rates, lower student admissions/acceptances, whatever the case may be - there's lots of different variables that can be negative impacted by increasing loan defaults).
And to be clear, I'm ALL FOR restructures and extensions without jacking to crazy interest rates, especially when the overall interest rate structure is so low. What I'm against for the most part is discharge of the debt.