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Comment by matte_black | Hacker News Reader

The banks that loaned out all that money will need massive bailouts or else shut down.

Let’s be clear, students will NEVER be allowed to default these loans, nor should they. They must either pay it or take their debt to the grave and pass it down to their heirs.

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Wait, what? Since when is debt passed on to heirs? If I die with credit card debt, that debt dies with me. My kids don't have to pay my debt. Any assets I own will be sold to help pay off my debts, but if the sale of my assets isn't equal to or greater than my debts, the debt holders have to write off that debt.

It isn't, student debt dies with you too, or at least federal debt does.

> Let’s be clear, students will NEVER be allowed to default these loans, nor should they. They must either pay it or take their debt to the grave and pass it down to their heirs.

You wanna try that again with a little empathy?

I have no empathy for bad short term thinking.

I could not afford to go to the college I wanted to go to, so I went to a cheaper one I could afford but no one really gives a fuck about. However, it left me with no debt, straight after graduating.

Today, as people struggle to pay off loans for universities they once boasted proudly about, it’s clear I made the right choice.

I did the same thing most of a decade ago. That pathway has unfortunately closed since the cheap college i went to tripled their tuition.

>pass it down to their heirs.

AFAIK, (and I'm a pretty ignorant fellow) debt in America isn't passed down, the creditors just take what they're owed out of a dead person's estate before its divied up by a will. So there could be a big "pop" if a bunch of people with lots of student loan debt and no assets die.

the creditors just take what they're owed out of a dead person's estate

You mean the estate that contains value I would otherwise get the full value of were it not for the student loan debt that was taken out? The debt is most certainly passed down, it's just abstracted away a bit. The only way the debt doesn't get passed down is if the debtor dies penniless.

Another way to put it is if the creditor extracts anything to pay that debt after the debtor dies, then the debt is most certainly passed on to someone because that money didn't materialize out of nowhere.

No, the money materialized from the lender when the loan was taken out. Some of the money might be recouped before or upon the death of the borrower - some might never be recouped.

> Let’s be clear, students will NEVER be allowed to default these loans, nor should they.

I think you mean “discharge in bankruptcy”, not “default”; default is what happens when you miss a scheduled payment; lots of students do default.

Also, they are dischargeable in bankruptcy, though the standard is harder than with other debt.

> Let’s be clear, students will NEVER be allowed to default these loans, nor should they.

Why not?

Because that was the deal.

Last time I checked, "the deal" as it were indicates, in writing, that student loan debt from the federal government is forgiven on death.

It is, of course, possible for the federal government to craft a deal that's actually bad for the American people.

When discovered to be so, it's also possible to alter the deal.

I agreed to this deal and I feel like I do need to pay off the debt, but I'm lucky in that I have a job that will allow me to do it the normal way if the crypto market crashes (heaven forbid, plz). What about the 18 year olds whose helicopter parents never allowed them to imagine a filthy reality like failing to go to college?

Regardless of whether that kid should have been free-thinking enough to see outside their existence's bubble, it's irresponsible to exploit their ignorance for profit. Most of these kids haven't ever seen a debt-ridden life like they're signing up for. I grew up with parents who ranted and raged about debt, and I still did it. Are you sure the problem lies with the kids signing the papers (I guess clicking the "Get your loan here!" button these days)?

The deal is that student loans in chapter 7 bankruptcy can only be discharged for undue hardship. Chapter 13 can't discharge student loans according to my understanding.

Because most of these students will likely default. And once the tax base drops, other government budgets are impacted resulting in a net loss for society. The alternative is the government only offers loans to students majoring in fields that lead to jobs capable of repaying.

1) The loans that are being discussed are not owned by private banks, so even if 100% were defaulted there would be no bailout of banks needed.

2) There are no blood debts in the US. Debts are NOT passed on to heirs like property.

>2) There are no blood debts in the US. Debts are NOT passed on to heirs like property.

Not yet, but given the steady rightward shift of American politics I can see it happening in the future.

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