Why isn't student loan debt dischargeable through bankruptcy?

[Yo_Mama]

40. Well, a rising wave of student loan defaults caused Congress to make it non-dischargeable

Personally, I think that was a bad move.

However, the public policy of making loans available to all students for all education implies that you will have massive defaults, which will put the taxpayer on the hook. The federal government has now effectively taken over most student loans.

Our current policies seem to be moving toward income-based repayments and eventual write-off (after 20 years) of the remaining balance, but that also implies that the public is racking up a large debt that is not shown on the books and will come back to hurt us later.

The only way to recoup the losses when you have loan classes with very high default rates is to raise interest rates, but that is obviously rather injurious to students.

So now we are in a classic bind and we will have to work out a medium solution that will leave everyone owning some of the losses - with the taxpayers picking up quite a chunk.