half of outstanding student loan isnt being repaid. 7 million in default

[limpyhobbler]

35. You're talking about government student loans, or loans backed by "the taxpayers".

I'm talking about private student loans that are not backed by the government.

They are strictly from banks.

Why should those be treated any differently that regular consumer debt ?

If you take a loan from a bank, and invest in a cocaine import warehouse, if the investment goes bad, you could potentially declare bankruptcy.

If you take a loan from a bank, and invest in a college degree, and then your investment goes bad, you can not do a bankruptcy.

Yet at the same time, such loans don't have any of the regular protections of government-backed loans, like the income based repayment options.

This type of loan falls outside of any regulation. These were pushed hard by banks for several years, in a very predatory way.

They need to be brought either under federal protection with the government loans, or treated like regular consumer debt. We cannot have a wild west sacrifice zone of $200 billion dollars worth of unregulated outstanding debt.

This is unregulated predatory lending. There are bills in Congress to address this and the CFPB has been allowed to study it but not regulate it, which is better than nothing.

There is a good long report here but skimming it could give an understanding of the scale of the problem.
http://files.consumerfinance.gov/f/201207_cfpb_Reports_Private-Student-Loans.pdf