Help me out here; people accepted these loans, having access to the terms ahead of time, correct? They were adults, presumably, who made these commitments, right?
Why, then, should we be looking to forgive them for making bad choices? Stupid decisions should be painful, so as to teach people not to do them anymore.
I say this as someone who will be paying off his student loans for at least the next 20 years. I made a remarkably stupid decision and I'll own the consequences.
OK, I'll try to help you.
Adults who made these decisions should pay the painful consequences of their stupid decisions. That will teach people not to do it any more, and it will eliminate the stupid people from the economy.
You're only looking at one stupid guy, the student. I'm looking at the other stupid guy, the banker who issued the loan.
During the S&L crisis, one banker said, "Anybody can loan money. What makes you a banker is that you can get your money back again."
In other words, a banker is supposed to evaluate the creditworthiness of a loan, and decide whether the loan makes sense and whether the lender is likely to repay it. That's the skill of a banker. (Once, banks were part of the community. Bankers knew who worked hard, who drank, who was a good businessman and who had unrealistic dreams.)
A student should make a realistic financial plan before he takes a student loan. If it doesn't work, he shouldn't take the loan, because he knows it's going to lead to disaster.
But the banker should also make a realistic assessment of the loan, and if the student doesn't have a realistic likelihood of paying the loan back, he should deny the loan.
In law, when you have a contract, with a consumer who is the buyer, and a skilled professional who is the seller, the seller is held more responsible for the decision than the consumer. That's the way it should be, because the seller is at a great advantage over the buyer. "Buyer beware" went out with the consumer movement. The banker is the guy with more knowlege. The bank is also a big institution, which is in a better place to assume risk than the individual student.
I think that when some ordinary consumer bought a house with a $1 million loan, and then found out that his house was worth only $0.5 million after the S&L crash, he should have been able to settle with the bank for $0.5 million, and forgive the rest of the loan. They're the bank. They're in the business of taking risks.
What about all the poor banks that get stuck with bad loans? Well, they were obviously incompetent bankers and the economy would be more efficient without them. That's the free market. If all your loans are going bad, maybe you're in the wrong business. Maybe instead of banking, you should learn coding or something.
Similarly, I've read the original arguments for eliminating bankruptcy for student loans, and I think they're bullshit. The bank should be able to size up a student and decide whether he's good for the loan. If he's taking out $100,000 in loans to study acting, you should point to the average income of employed actors and tell him it's unrealistic. Maybe he should study coding or something.
If your loan customer is 10 years out of college, still making $10,000 a year, with his interest rising faster than his income on a $100,000 loan, it's time to face facts and realize the loan will never be paid off. We don't have indentured servants in America. It's time for bankruptcy. There's a reason why we've had bankruptcy since the 16th century.
I know that a lot of people were brought up to believe that their word was their bond, and they should always do the right thing. I remember a brother and sister who inherited their father's business (wholesale clothing, or something like that), and they went bankrupt. They spent years paying back every cent they owed to their creditors. After that, they had a reputation in the industry that was worth more than money. They could could close a deal with a handshake.
Those were great times. I love people like that. Times have changed. It's good to be like that when everybody else is like that. If everybody is a crook, you're really at a disadvantage if you're the only one who is keeping honest.
And these days, everybody is a crook. https://www.washingtonpost.com... When somebody owes Donald Trump money, he wants to get paid. But when he owes somebody else money, he's an epic deadbeat.
The last reason for declaring student bankruptcy is -- who decided that college should be so expensive? When I went to college, in the 1960s, the state universities charged token amounts (say, $400 a year), and City College of New York (and Brooklyn College) were free. Why should you have to pay when my generation (and your bankers' generation) went free? Why should you have to pay when European students pay nothing or very small fees (or get living expenses in addition)?
If you've got a lot of money, that's fine. But if it's a hardship, then it's time for the Jubilee.
Don't beg for it. It's not a charity. It's your right.
Just vote for the candidate who says "bankruptcy for student loans." I know I do.