Colleges have put millions of Americans in indentured servitude and the US government has responded by giving then an even bigger subsidy.
The US Government is the problem - by creating loans 18-year olds can't default on - when hardly any of them understand the consequences.
If colleges don't offer ever juicier amenities, the students will take their debt elsewhere to get a better offering.
Colleges are simply competing for students.
The amount of debt they can get - and therefore the amount of school they can "afford" is the problem.
It is literally risk free money so they're going to inflate the price so that they get the most for least investment and least risk.
We build bankruptcy into debt systems not just to give people relief, but also to take the risk off of people and put them on lenders with actuarial resources.
Then they pay someone else to service the loan after origination.
The (edit: one) meaning of "loan servicing" used to be only (edit: not only) paying - not (edit: also) collecting payments.
https://ahdictionary.com/word/search.html?q=service
3. To make interest payments on (a debt).
IIUC, "service payment" comes from the fact that you are paying for a service - someone is providing you with debt as a service... The debt servicer.
I was aware of "servicing a loan" as "paying the interests". But I've found that the "administrative" meaning also goes back many decades.
Someone should open a ticket.
Without the ability to default - the loans made the situation worse.
Some of that might be undone by forgiveness.
[1] https://studentloanhero.com/featured/student-debt-demographi...
It's almost as if you shouldn't be able to take on near unlimited non-default-able debt for something that is nearly worthless.
These people were put into a debt trap at 18, not saved by the government.
It's also interesting that finance is left out of most high school curriculum right before people are signing up for the second (and increasingly the first) most expensive purchase of their lives.
> The amount of debt they can get - and therefore the amount of school they can "afford" is the problem.
Yeah like, this is another form of a subsidy to colleges.
Imagine if the US government would let you easily get a $200k loan to buy a car.
Or have Fannie and Feddie artificially lower interest rates with a government bailout guarantee so you can get the same house... but pay 50% more for it (total, not monthly payment).
But you can default on them.
https://www.consumerfinance.gov/about-us/blog/busting-myths-...
"For too long, a myth has persisted that student loans are not dischargeable in bankruptcy. The myth is not true because, in fact, student loans can be discharged bankruptcy. We have seen the Department of Education take important steps to ensure that bankruptcy relief is available to federal student loan borrowers. "