> If it's a bad bet for the bank, it must be far worse of a bet for young adults.
That doesn't follow: you could graduate, get your degree, and declare bankruptcy. You're fine, your loan is gone, and the bank regrets their investment.
That doesn't follow: you could graduate, get your degree, and declare bankruptcy. You're fine, your loan is gone, and the bank regrets their investment.
Since the bank is absolved from making that bet, it is now the young adult making the same bet that no sane bank would take.
A lot of people are now living with having lost that bet.
It is in fact bad.
You can’t just declare bankruptcy and get a high paying job a year later and have no student debt....
When I looked into personal bankruptcy I was told by my lawyer that it would only make financial sense if there was no way I could pay back the amount owed in the next 7-10 years.
Why? I rather consider this as a sign that the person will be rather loyal as employee because he needs the money ...
Trust is like glass - easy to break, very hard to put back together.
This of course will be to the spiral and collapse of the college loan system.
If bankruptcy laws were abusable by students in the present day, EVERYONE would know how to do it
It's a positive feedback loop
In my early days in Motorsports (late HS?) we had a anesthesiologist in our group, he was the wise elder who had accrued enough money and flexibility in his practice to play around with the young punks and 'show us how its done.'
One day after a tech day before a track event we working and wrenching in his garage and someone asked him how he got into the trade; turns out he was drafted in Vietnam and chose a medic role out of professional interest but also to ensure not being sent into the suicidal combat zones and come back home alive.
He said that it was incredibly typical to do what you just said in the 60-80s and declare bankruptcy like that when you got your MD, mind you this is at a time when it cost a fraction of what it costs today.
But you could also have your entire medical career subsidized by the State and expedited if you're sent on tour faster than anything offered in the civilian World and choose whatever medical school because of the GI bill and do your residency anywhere you wanted due to your status as a veteran.
And then stiff the Bank for any loans you may have accrued and it was accepted and common practice and save while your credit score was fixed.
He was one of the few boomers who openly spoke about how his generation wasn't anymore responsible then the 'entitled' millennial trope and tried to lecture us about it as that was becoming wide-spread by that time. He actually gave advice about the optics of this route that were being skewed to the detriment of his Industry and profession.
Now seeing the shortage of medical workers during COVID are being perilous overworked all over the World turns out he was, reluctantly, right.
Additionally, I wouldn't even expect a college bankruptcy to fully preclude getting a home mortgage. With a large down payment the bank isn't actually taking that much risk.
(Except that really I expect that if this law changed loans would require cosigners with good credit)