Not so bizarre when you consider that student loans are very difficult to get discharged via bankruptcy. The loan issuers don't need to worry so much about whether you'll be able to pay it back or not, because it's more a question of "when" than "if".
Fix bankruptcy laws, fix the student loan problem.
Sure. And if they change then their loan status/situation will change.
Just like my mortgage through my Credit Union. The terms of the mortgage when I refinanced was owner occupied for 12 months after the closing date. If I move out prior to the 12 months I'm technically in default and the holder of my note gets to choose what to do.
The problem is that people are graduating with huge debt and can't get jobs that pay well enough to pay off their debt.
A large number of the people who default on their debt never graduated.
I normally would down vote a comment that starts with DYRTA. I haven't this time, I wanted to use the opportunity to express how I think we can maintain HNs civility. Thank you.
"Federal figures show most people in default on student debt owe relatively little—under $10,000—because they dropped out of school"
17-18 year olds often aren't going to have much of a credit score, so you're basically winding up excluding folks from low-income areas/backgrounds from a college education.
Are you going to ban students from changing their major after a few weeks?
That wouldn't be true even with the limitations on discharge in bankruptcy, except that servicers have been actively steering people with trouble paying into deferments rather than the various income-based-and-discharged-in-N-years plans (where N is generally 20 or 25.)
If you could discharge them in bankruptcy, no one would offer them because huge percentages of people would go ahead and do so.
And society can have a discussion again on how much it values educating its populace.