I know what you are saying - I really do. But one of the primary principles of Capitalism is that in order for there to be profit, there has to be risk. Sometimes you win, and sometimes you lose. Remove the risk, remove the profit.
I do think that debt owed to the government of any kind should be subject to bankruptcy law, in the same way as any other entity is subject to bankruptcy law. I agree with you in that, as otherwise there is an inequity.
But what happens when the rubber hits the road (wrt student loans) is that the risk is removed. There is no penalty accrued. And since there is no penalty, the market (college) goes oblong and sustains what is otherwise unsustainable...
Because the end user has no risk, there is no real research into making a very good decision... A touchy-feeley approach can be applied instead of hard numbers... Easy-bake degrees are chosen rather than the hard way that actually will pay with a desirable employee for an industry that is actually capable of hiring him and sustaining him life-long...
It is already bad enough because of grants. Allowing bankruptcy will only make it worse. There is a reason why colleges continue to offer education options that lead to nowhere... In fact MOST lead to nowhere... And it is directly attributable to the fact that the college gets paid for a product that is not viable.
If the way is made hard, the risk is great, and the reward fantastic.
When my business went sideways, I contemplated bankruptcy - But I tended to pay vendors before government, so most of my debt load was to the government, and guess what? That debt was likewise not able to be discharged through bankruptcy. It took me four years of very hard work and starvation rations to climb over that hump. But I am glad I did it, and I am a better man because of it.
Why should educational loan applicants have it better than me, when I am the one actually making the jobs and taking risk?
We dont have a capitalistic system any more and have massive manipulation of the price structure due to govt intervention in areas it has no business in.
College loans is one of the main areas to where the academic complex never faces any downwards pressures on its own cost structure due to the endless prniting of money.
Its a massive ponzi scam of the worst order.