. . . except for the fact that student loans are not unsecured debt. They cannot be discharged in bankruptcy or by almost any other means.
Part of the reason that they are high because people getting worthless and marginally marketable degrees are paying exactly the same rate as people getting worthwhile and fully marketable degrees.
The other part is substantial money has to flow into government coffers to support the highly paid mostly political appointees who perpetuate this scam.
“. . . except for the fact that student loans are not unsecured debt. They cannot be discharged in bankruptcy or by almost any other means.”
There are a number of non-bankruptcy means to discharge part or all of student loan debt, mostly revolving around government-approved "service" options.
But dealing primarily with bankruptcy, although it's difficult to discharge student loans in bankruptcy, it's not impossible. The legal standards for discharge vary from place to place, as it seems the law is still settling out. There are actually lawyers who specialize in helping folks show "undue hardship" to discharge their student loans in bankruptcy.
But, bottom line, even if you can't discharge the debt, if you stop paying your student loans, there is no collateral they can seize and sell to compensate them for the loss. Student loans are unsecured loans. The creditor may garnish your wages, subject to the same rules as garnishment for other debts, to the degree that you have them, but that's not the same as secured by collateral.
“Part of the reason that they are high because people getting worthless and marginally marketable degrees are paying exactly the same rate as people getting worthwhile and fully marketable degrees.”
Not with private student loans from private companies like Sallie Mae (the original topic about which I posted). For private lenders, since they no longer receive subsidies or guarantees from the government, they do, indeed, take creditworthiness into account, and factor that into loan interest rates they provide to student borrowers and their parents.
As to the on-going federal direct loan program, I haven't really made any substantial comment.
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