... I agree that loan forgiveness programs present a moral hazard to young adults and it in unethical to take out student loans that you don't intent to pay in full - so deciding to invest because unpaid student loan will be forgiven in 25 years would be wrong ...
Fraudulently securing a loan is obviously wrong. However, that abstract claim simply has no relevance to the morality of income-based repayment plans. The
Master Promissory Note ("Note") for most federal student loans explicitly says that a borrower has the option to repay under
either the standard repayment plan
or a variety of alternative plans including the "Pay As You Earn Plan". Note *7-8. The lender also reserves the right to offer any other payment plan at its discretion, such as plans that did not yet exist when the Note was signed. Note *2 ("ED will provide you with a choice of repayment plans."). Although we do not know what precise version of the Note was signed by the original poster or by user "ReadySetMillionaire", I think we can safely assume that past versions of the Note contained similar language.
In other words -- as ReadySetMillionaire has already claimed -- taking out a federal loan under the Note with the intent of paying it back under an alternative payment plan is not fraud because (among other reasons)
it is expressly permitted by the Note.
This forum has seen its fair share of people
imposing bizarre moral requirements on top of legislative programs, but asking somebody to gratuitously pay more than is owed under a promissory note is a new level of absurdity. This is literally akin to
demanding that bond issuers make larger interest payments to you because of inflation. Do you believe that it is unethical for a corporation to pay 2% on a 2% bond, rather than voluntarily increasing the interest payments each year? If you loan your friend $100 at an agreed rate of 0% interest, do you believe it it unethical for them to pay you back with anything less than 3% interest?
The terms of the Note (and applicable law) govern whether somebody is in default of the Note. Your idiosyncratic views of personal morality are irrelevant and wrong.
As for mortgage lending, the lender is presumably free to ask about the balance of the person's outstanding liabilities and to take that information into account in the decision of whether to extend credit. A lender is not restricted to the four corners of a person's credit report, but can (and does) ask whatever it wants, subject only to applicable anti-discrimination laws and other legal requirements. If a lender fails to ask for relevant information and makes a bad result as a result, that is entirely the lender's fault. There is no obligation to give your entire life history to a mortgage lender. Generally speaking, you are required only to truthfully provide the information that they actually ask for.
I conclude that there are no moral issues implicated by this thread. Whether the original poster should or could purchase a house is a separate question.
In closing, I note that many respected long-time members of this website frequently and openly
confess to engaging in literal fraud and do not receive the kind of vitriol that people typically post in threads about benefit programs; if anything, such confessed fraudsters receive adulation and praise. Why is it that forum members here approve of tax fraud, but have a problem with honest taxpayers complying with all the terms of their obligations?