> I find that most times when people say, "You cannot," or, "You can," what they're actually saying is, "The probability of you being able to is very low/very high." Surely this is the case for my claim. If it helps, please read it as such.
That's still a worthless statement honestly. A useful statement would be saying that by making it very difficult to discharge loans in bankruptcy (under certain specific terms), the number of loans increased by 15% and the terms changed by blah blah. Personally I've never heard such numbers. In fact, I've never been able to find any sources that showed that students declaring bankruptcy was ever originally a large problem.* (Why would it be? It's not like bankruptcy is some harmless thing even if you don't have assets.) It doesn't surprise me that this reason would be trotted out by the lending industry however. What part of the loan industry wouldn't want the government to enforce this against borrowers?
> Other variables were different then. Particularly, the variables of cost and expected compensation relative to the baseline. (Cost has, infamously, been rising, while the expected compensation of graduates relative to the baseline has been falling.)
So in other words the loans are _worse_ deal. Yet you don't want to revisit why the government is effectively subsidizing them by removing their risk? Why?
> You may be right that under current circumstances banks would be equally willing to lend.
When did I say they would be equally willing to lend? Why would we even want that? There are many examples of people that are extremely in debt for dubious payout. Would it not be a _good_ thing if they were not in that debt due to the inability to be granted a loan under such terms?
> That strikes me as absurd, but I've been wrong before. Shall we roll the dice and find out?
Wow such humility.
* Edit: For example, here is a quote from a write up that indicates it was not a problem:
> D. Protections Against Abuse
> One of the most common reasons legislators give for excluding student loans from discharge is the need to prevent abuse of the bankruptcy system. 135 The 1976 Bankruptcy Code included a five-year waiting period before student debts could be discharged because lawmakers were skeptical of new graduates discharging their debts while they still had few assets and then going on to more lucrative careers. 136 As stated earlier though, this fear of post-graduate abuse was baseless when the provisions were put into effect because, even then, student debt abuses accounted for less than 1% of all filings, and this fear remains baseless today. 137 Even if abuse of the bankruptcy system posed as large a threat as legislatures believe, existing anti-abuse measures can sufficiently curb abuse without having to resort to the harsh measure of exempting private student loans from discharge. 138
> Currently, the Code has independent abuse provisions, most notably the means test in § 707(b), which sets an objective and straightforward standard for a judge to detect and prevent abuse of the system. 139 Also, even if an individual’s filing passes the means test, a court can still dismiss the case if it finds that the filing was made in “bad faith,” or if “the totality of the circumstances . . . of the debtor’s financial situation demonstrates abuse.” 140 In addition, many student loans by private lenders today require a co-signing party to help ensure that the bank is secured in the event of abuse. 141 Together these protections effectively safeguard against abuse in the bankruptcy system, which this Comment will argue makes the exemption of student loans unnecessary.
http://law.emory.edu/ebdj/content/volume-32/issue-1/comments...