Allow student loans to be declared during bankruptcy. It is unfair that these loans currently cannot be. Young Americans should be allowed to leverage bankruptcy if they are unable to survive due to their student loan debt.
I would push reform in a different direction. The issue is exploding costs of the university system versus its benefit. Allowing large debt loans to students to be wiped off through bankruptcy does not discourage the exploding price hikes that are not supported by the utility of the education - as measured by the ability to repay the loan.
If we view the education as a good or service to be purchased we can say that the product is deficient. Get a refund. Rather than expunging the debt, have the university system pay it back.
To prevent abuse, have the state maintain a database of credentials discharged through this process. Discharged credentials, e.g. a degree in electrical engineering, can not be drawn on when applying for a position. If you are hiring for a position that requires a degree, check the database. This function can be added to the existing E-verify system.
Have a method to rectify and cure the discharged degree with the creditors and educating body. If the degree had value, and our student here had transient hardship, give them the opportunity to reclaim it rather than go through the education process all over.
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Brilliant! Well thought out. My suggestion just comes from a narrow common sense focus. How come almost every other loan can be claimed in bankruptcy but not student loans? Never made sense to me. Your suggestion would actually tackle the root cause.
Something dramatic needs to be done to stop these universities from charging insane amounts of money for our children to attend, especially when they really don’t get anything in return when it’s a useless degree. Talk about price gauging!
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