Do you think Congress should make it easier for those
with student loan debt to declare bankruptcy?
Students need to take their education debts as seriously
as any other debt. But we do need to make sure that
student debt can be refinanced at very competitive rates
and terms, just like all other debt that Americans take
Cunningham, San Diego Institute for Economic Research
Although allowing student loan holders to declare
bankruptcy will cause lenders to be much more
restrictive in extending loans. Ease of issuing loans
combined with rising college tuition led to student debt
exploding over the past decade. Student loan servicers
operating outside normal financial oversight often
extended loans to candidates with extremely high chances
of defaulting and no real commitment to higher education
Ė much like subprime mortgages issued to nearly
anybody during the mortgage crisis.
Ely, San Diego State University
Unlike other forms of debt, student debt is typically
not dischargeable through bankruptcy. Thus, individuals
can struggle for years trying to pay off student loans.
Unable to repair their credit rating, spending is
constrained and borrowing for a major purchase such as a
home is unlikely. The economy would be healthier if
these individuals were able to emerge from bankruptcy
with the burden of student debt lifted and then able to
rebuild their lives.
Champion-Cain, American National Investments
Those seeking advanced education should be precisely the
population able to make a loan risk calculation not a
group destined for bankruptcy. Governmentís debt
relief role should be limited to accrediting
institutions that provide viable, valued educations.
Restricting student loan access to predatory for-profit
schools would preempt the source of greatest concern and
protect the most vulnerable students. Education must
become more accessible and less loan dependent or weíll
all suffer economically.
Gin, University of San Diego
There is no reason to treat student debt differently
than other debt. Most students are able to repay their
debt. For those that canít, bankruptcy should be an
option. As an aside, many of the students who get into
trouble are those who have been lured to attend private,
for-profit colleges, which encourage students to borrow
but sometimes leave them with dubious job prospects.
There should be greater regulation of that, but it looks
like the current administration is going in the opposite
Hamilton, UC San Diego
Student debt should be governed by the same bankruptcy
laws that apply to people who get into problems with
other debt they canít repay. Some students made
mistakes taking on loan burdens they really canít
handle, and taxpayers made a mistake in letting this
program get so big. But at this point itís time to
admit those mistakes, reform the student loan program,
and let everybody move forward.
London, London Group of Realty Advisors
If alumni cannot actually pay off a loan isnít that an
indicator that their education failed? The ability to
default is ultimately a wake-up call to the education
system to deliver, or they wonít get paid back for the
increasingly steep cost of propping up an educational
system in need of radical reform and transformation.
Colleges canít just charge too much, defer loans and
absolutely expect to be paid back with interest.
Everyone has to earn their return.
Miller, University of San Diego
Bankruptcy is used too frequently in the U.S., allowing
too much risk taking. We should make it harder to use
bankruptcy for any kind of debt, mortgages included,
with the exception of unpredictable medical debt.
Students should consider job prospects based on the
skills they might gain in school prior to taking on
loans, but many donít and 20 percent of all student
debt is in default. Forgiving that will send the wrong
message about debt and responsibility.
Student debt should be treated like other debt. Debt is
debt. This also means that interest on that debt would
need to be handled as the market dictates for loan
collateral, loan qualifications, and loan interest
rates. Fed Chairman Powell recently said that growing
student loan debt has the potential to hold back overall
economic growth and can have long term negative impacts
for individuals, including poor credit ratings. Allowing
borrowers to discharge this debt is a much better
solution than the government (i.e. taxpayers) having to
pay defaults on the loans.
Currently, student debt is treated as a toxic liability
and is protected against bankruptcy while still at
predatory rates (double car and mortgage loans!). Should
our society value purchasing cars (a depreciating asset)
above educating its citizens (increasing wages/taxes
& competitiveness)? These rates make higher
education untenable for many prospective students.
Rather than eliminate the bankruptcy exemption, I would
prefer student loans at significantly lower rates
(especially if they cannot be discharged).
Rauch, R.A. Rauch & Associates
Most student loan debt outstanding is comprised of
federal student loans, hence, any cancellation of
federal student loan debt via bankruptcy would be at the
federal governmentís (and taxpayer) expense. There are
income-driven repayment plans available and federal
student loans can be forgiven in 20-25 years. Further
flexibility in dealing with these loans sends the wrong
message to students as part of the learning process is
to be responsible financially.
Reaser, Point Loma Nazarene University
Student loans continue to weigh on many households, but
allowing bankruptcy could trigger the wrong set of
incentives. College-bound students could assume even
larger amounts of debt with the knowledge that such debt
could be relatively easy to discharge later. This could
prevent individuals from carefully assessing the value
of different institutions, evaluating the potential of
different careers, and finishing college in four years.
The addition to the nationís debt could also be