There are several ironies in this proposed bail out for student loans:
* Most of those taking out student loans are middle class or upper class, since the poor got federal grants or scholarships. Now the poor or less educated get to bail out middle class college educated people.
* The government has been increasingly tying federal service to student loan forgiveness. Shall we see a broad “forgiveness” of this unbankruptable debt in return for virtual federal slavery?
* Student loan forgiveness means loans for education will dry up for future students.
Since the government nationalized the student loan industry last year, this isn't going to happen. It's just another government program that will continue to be funded regardless of whether it makes sense to do so or not.
On the other hand, the schools will jack up their prices to ensure that every student that comes through their doors will end up with a student loan that equals the maximum amount the student is allowed to borrow. As you have pointed out, since it's a government loan, the student can't get out from under it unless the student bows to the will of the federal government and takes certain jobs, gets certified as 100% disabled (by the same government), or dies. These loans are NOT bankrupt-able.
In other words, college educated individuals (virtually all of whom are in the middle class) are now rooked into 20 years or more of paying an undocumented tax ... the interest on the loan. Or, if they do default on the loan, the government gets to keep their income tax refunds as well an any other over-payments they may make to the federal coffers.
I hadn't thought of this until the other day because we generally concentrate on the 20% or so who default on the loan. But the other 80% are stuck paying interest (albeit a low interest rate) on a loan to the government for many, many years. How much is the government profiting off this?
In any other industry, I would think that there would be a RICO investigation warranted.
The loans are overwhelmingly just income transfers to the left. Outside of math, science, and engineering, the typical college degree today has little or no real value.