Trump Admin Considering Student Loan Bankruptcy Options

[Swordsmyth]

The Trump administration is looking to clarify the rules which govern whether a person can discharge student loans in bankruptcy, according to a public notice issued by the Department of Education. The agency is seeking input in order to determine "whether there is any need to modify" how bankruptcy claims are evaluated.

Under current law, student loans cannot be discharged unless a borrower has filed for bankruptcy and can prove an "undue hardship" which prevents repayment. Circumstances which constitute undue hardship have never been defined by congress, leaving it to bankruptcy judges to decide on a case by case basis - typically setting extremely the bar extremely high.
As a result, very few borrowers are allowed to expunge their debt.

Considering that nearly 40% of student loan borrowers from the mid 2000's may default by 2023 according to Brookings, it's clear something is going to need to be done, especially since the alternative is a wholesale taxpayer bailout.

More at: https://www.zerohedge.com/news/2018-...ruptcy-options

[r3volution 3.0]

...it's clear something is going to need to be done, especially since the alternative is a wholesale taxpayer bailout.

Allowing them to discharge their debts in bankruptcy is a taxpayer bailout, to the extent that the US government/holds guarantees those loans.

Apart from that, bankruptcy is general is nothing but legalized robbery of creditors.

The only real solution to the student loan problem is to lower the cost of education.

1. Eliminate all federal and state subsidies (loans or grants)

2. Eliminate accreditation (or eliminate degree requirements for professional licensing, same effect)

[Matt Collins]

The Fed will just print more money