The federal government should stop issuing new money student loans.
Let private lenders step in to fill the gap, with:
1. at least 120% of the principal amount having to be repaid before the person can declare bankruptcy on the rest, if the person has had W-2 income of at least $40,000 in a calendar year,
2. at least 80% of the principal amount having to be repaid before the person can declare bankruptcy on the rest, if the person never has had W-2 income of at least $40,000 in a calendar year but has had a 1040 Adjusted Gross Income of at least $30,000 in a calendar year,
3. at least 50% of the principal amount having to be repaid before the person can declare bankruptcy on the rest, if the person never has had a 1040 Adjusted Gross Income of at least $30,000 in a calendar year.
The dollar amounts to be based on the year of initial loan issue.
Accreditation should be a market-based product.
Making student loans a market product will help direct students to a college education which has market value.
Years ago, student loans couldn’t be discharged through bankruptcy. Some said that was incentive for the colleges to produce an inferior product. I’m not sure what the rules are now.
Do any colleges offer exit exams?