Earlier quoted context omitted.
This seems to be a pattern in America. People call for X to be more affordable > government subsidizes X > X absorbs all subsidies and becomes even more expensive > people call for X to be socialized. Maybe instead we should start to unwind student financing. For example: let students discharge student loans via bankruptcy. That would give financiers pause and would put an upper bound on what many universities could…
> let students discharge student loans via bankruptcy This is a fine idea, but you have to recognize that this just means approximately no one gets student loans (and those who do get them don't need them). Think about it: if you come out of college with, say, $20k of debt (granting that this might bring down prices) and no assets, bankruptcy is a very tempting option. Student loans are just inherently problematic -…
The vast majority of student loan loans are issued by the federal government since private lenders are cut out of the federally-guaranteed Stafford loan program, so changing rules on discharge won't meaningfully effect loan issuance without some other federal policy change.
> Think about it: if you come out of college with, say, $20k of debt (granting that this might bring down prices) and no assets, bankruptcy is a very tempting option.
So make them hard, as they are now, to discharge for some period of years after they would regularly first enter repayment, and then subject to discharge like normal unsecured debt.
Or, just eliminate the federal student loan program and special bankruptcy treatment of student loans in favor of robust federal need-based and public-service-based grants.