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Cancelling student debt would pretty much immediately stop new loans. I don't see how another loan for the same amount could be granted afterwards.
Student loans are almost entirely made by the government.
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The lender takes Bob's business and Jim's house. How is the lender going to take Dave's degree? Dave is the only one of the three who could keep the asset after declaring bankruptcy, if that were allowed.
In this scenario, Dave's degree is likely worth little or nothing, so I'm skeptical that allowing him to keep it represents any kind of real advantage.
And if you would suggest that the bankruptcy court should consider the value of the degree, I would respond that the appropriate time for that is before lending the money.
So says the NYT. From behind a pay wall.
Earlier quoted context omitted.
Cancelling student debt would pretty much immediately stop new loans. I don't see how another loan for the same amount could be granted afterwards.
I think you are misunderstanding what people mean by "cancelling debt". They don't mean they will force lenders to suffer a loss, they mean that government will cover the debt.
A lot of those taxpayers aren't college educated, and they work hard for their wages.
> Historians sometimes refer to it as “jubilee,” a term used for household debt forgiveness decrees in ancient Israel that were similar to debt forgiveness in ancient Egypt, Babylon, and elsewhere. The widespread existence of this type of debt forgiveness in antiquity profoundly attests to the universality and persistence of this debt accumulation issue. It's important to note that Jubilee was not at all the same as…
At least in the Jewish version the law also said you can't take into account the nearness of the the jubilee to not make a loan. I'm not sure if/how much that was respected though.
https://www.biblegateway.com/passage/?search=Leviticus+25&ve...
The responsibility for making a fair purchase/sale was actually on both parties (buyer and seller). This is conjunction with the sale of property actually being considered the right of receiving the profits the sale of the goods the property produced would have prevented pretty much all short term purchasing. A landowner would not give up their land post seeding and prior to harvest because they have already invested in it, and a purchaser is not going to purchase land after a harvest in the year before the Year of Jubilee because there is no way for them to make a profit while still keeping the land.
EDIT: That being said, there isn't really a comparison here because the leaders of the Jewish people would never had made these kind of loans to the general populace and then expect other members general populace to pay for them.
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In this scenario, Dave's degree is likely worth little or nothing, so I'm skeptical that allowing him to keep it represents any kind of real advantage.
But laws aren't made only for this scenario. If student loans were dischargeable in bankruptcy, the financially optimal decision would be to borrow as much as possible while in school, then declare bankruptcy immediately after graduation. And if you would suggest that the bankruptcy court should consider the value of the degree, I would respond that the appropriate time for that is before lending the money.
Bankruptcies stay on your credit report for seven years. That doesn't sound particularly "financially optimal" to me, or likely to anyone else.