Yes, student loans should be included in bankruptcy, but...
1. It should be part of a full bankruptcy; no just declaring bankruptcy on the student loan, but not on everything else in your life
2. just like every other loan, you have to return what was purchased with the loan (the collateral) to the lender; in this case that would be any credits and degrees paid for by the loan
People would think twice if they had to give up their hard earned degree to get out of debt.
And, for those people that never made it through college, but racked up tons of debt, it will give the colleges an incentive to not loan money to people they don’t think can complete the degree.
That would fall under the heading of cruel & unusual punishment. You would take away someone’s livelihood. That is the whole reason we have bankruptcy. How does someone have a fresh start when they can no longer work in their field. In fact in bankruptcy people are allowed to keep the things they need for work, a house, a car. The degree would fall under that umbrella.
Bankruptcy law serves three basic purposes: (1) to solve a collective action problem among creditors in dealing with an insolvent debtor, (2) to provide a “fresh start” to individual debtors overburdened by debt, and (3) to save and preserve the going-concern value of firms in financial distress by reorganizing.
In Chapter 13 bankruptcy, you can keep all of your property. But that doesn’t mean that you won’t have to pay for some of it. You’re allowed to protect, or “exempt,” a certain amount of equity in the property you’ll need to maintain a home and job. If you want to keep nonexempt property, such as a boat, baseball card collection, or another luxury item, you’ll have to pay for it through your Chapter 13 plan.