“The universities get paid and have been paid up front. Discharging loans will have little to no affect on higher education.”
*face palm* Friend, I’m not saying we go back and reclaim money already spent. How many loans do you think will be made in the future if past loans are discharged in bankruptcy?
.......I’ll wait. keep thinking........It’ll come to you.......
VERY FEW is the answer
Now do you think that future spending on education will affect universities? (psssst. The answer is ‘yes’)
What if spending goes DOWN because people won’t loan money unless they are SURE it will be repaid - won’t that mean fewer people go to university? (yes)
So do you still think that discharging loans will have little to no effect on higher education? (if your answer is not “no” then you must have majored in economics)
What will be the affect of adding another trillion or two to the national debt? Talking about hand hitting head.
1. The loans will still be made if they’re federally insured. The ones that aren’t insured WON’T be made (at least not much, or not without collateral). This will stablize or even force down somewhat college costs (you can’t charge what your customer base can’t afford). And ...
2. Loans would be discouraged for non-marketable majors, as those would be the least likely to be paid off. Say goodbye to [fill-in-the-blank] studies and other bulls—t majors.
“What will be the affect of adding another trillion or two to the national debt? Talking about hand hitting head.”
Only in government can they pretend that an “asset” - i.e. a non-performing student loan, actually has value.
It’s the same thing with Mortgaged Backed Securities that the Fed has loaded up on. They, under any normal (and legal) sense of accounting, have only a fraction of their face value.
At least with MBS there is an underlying piece of property that has some value
WIth a student loan - there is no asset. Only ability to pay.
So the government has ALREADY taken the hit on these loans - to the extent they are non-performing. So it’s a wash.
Put them through the bankruptcy process. Liquidate or restructure the debts as each individual can handle, and move on.
Believe me, I’m bitter as hell. I paid student loans, and I pay full boat tuition for two kids in college right now. It hurts.
but it does no good to expect an unemployed English Major with $100k in debt accruing at 9% annually to ever pay that back. They won’t do it. They won’t ever participate in the legitimate economy. Nobody wins.