- Oct 11, 2013
The only way to make SL debt dischargeable is to force the student to surrender their degree and be banned from using it to secure employment. Yes they would still have the "education" but they can't claim to have a degree in anything. They have to have some skin in the game instead of taking a small hit to their credit rating and moving on from 6 figures of unsecured debt.It is time for amending the US Code to allow for bankruptcy of student loans. However, the idea that schools should be on the hook would have disasterous consequences. 18 schools have an endowment over 10 billion dollars. All 18 of those schools don't need tuition, or could easily say free tuition for households under $250K annually and the rest must pay out of pocket with no student loans. There are roughly 120 universities with endowments between 1 billion and 10 billion that could handle this, but would likely take some sort of action. So that's 138 universities. Every other school would either have to increase tuition to an extent they self insure themselves, or would likely not survive having to repay some of this debt. That's like basically every medium sized liberal arts school, secondary state school, community college, etc... It totally would create a caste system where the very best students went to the very best colleges (they becoming even more competitive) and nothing for the rest.