[muawiyah]

Call it what you want, but when Congress decided to remove bankruptcy from those loans, the interests rates should have dropped to record lows.

They didn't.

So, why protect the lenders to any greater degree than other loans they make at the same rates.

[kabar]

Private lenders warn that the suggested change could drive up interest rates, since the risk of losses would increase. They argue that bankruptcy provides too big a temptation for students to walk away from their debt obligations because, unlike homeowners, for example, many students lack major assets.

The net effect and probably the objective of this WH is to kill off the private lenders and let the federal government assume all of the lending responsibility, thereby increasing federal control over our lives even more.

[Zhang Fei]

Call it what you want, but when Congress decided to remove bankruptcy from those loans, the interests rates should have dropped to record lows. They didn't. So, why protect the lenders to any greater degree than other loans they make at the same rates.

Just because the loans can't be discharged in bankruptcy doesn't mean that borrowers actually make good on the loans. That's why interest rates haven't fallen much. However, the fact that these loans can't be discharged in bankruptcy is why student loan interest rates remain far below credit card rates despite the fact that these types of loans have one key feature in common - neither is backed by physical collateral that can be seized to cover the remaining loan balance.

[9YearLurker]

Student loans are mostly prohibitively expensive at market rate when bankruptcy is allowed.

Look how many students don’t pay up and are generally an expensive hassle to track down. Those rates on guaranteed loans are still way below what they’d be on such an open market.