Replies

I hear ya but it is not really a contract if there is no exit.

Other types of loans have other forms of exit, other than full payment. The Founding Fathers well knew the perils of a system that didn’t allow exit on loans or contracts. They sought to avoid a system of debtors prisons and servitude.

The student loan system is like no other. There is no bankruptcy exit. It is essentially a life sentence. Payment or death is the only way out.

These are unreasonable loans that are made without any investigation into repayment ability. Normally, banks look at values, character and ability. Is what is being purchased valuable? Can the bank recoup any potential losses? Is the item able to be resold to recoup loss? What’s the credit history and ability to pay of the applicant? What is the collateral?

None of that exists with these loans. The only reason they are made is because of the co-signer; you, or I should say the government on your behalf, as the government has no money to loan without you. It’s a scam. And banks make money or they wouldn’t do it.

And as anyone with any economic knowledge knows, there are really only two forms of inflation; the expansion of the money supply (printing dollars), or the expansion of credit. The expansion of credit in both the housing market and the education market has driven prices up faster than any other sectors.

Everything the government touches turns to crap and the student loan system is a prime example. These are not legitimate loans and should not be viewed as such. Furthermore, one looks at anyone who fails on their home or business loans as poorly as people on this site view people who fail on student loans. Why? It’s a business arrangement like any other, admittedly an incredibly bad business arrangement, more so on the part of the bank. Many business deals fail and most result in the loss of money. Why is this business arrangement and potential loss viewed so much differently? The taxpayer is the co-signer on all sorts of loans, besides student loans, yet these are seldom at issue, even though some result in great loss.

The government should not be involved in any loan system or co-signing for anyone for anything. It always muddies the waters and causes undesirable consequences.