Thanks GOP. Parent's Of Deceased Children Inherit Their Student Loan Debt.

[badtoworse]

36. Bankruptcy is not the only risk or consideration in setting loan rates

Zero risk of default? The borrower can simply not pay and default on the loan. If he does so, his credit rating goes into the toilet and he's shut out of any credit - it's a crappy life, but it happens. The fact that the borrower hasn't declared bankruptcy isn't much consolation to the bank - the loan remains unpaid and the bank is still out the money. That is certainly a risk and the banks consider it when they set the rates.

As for a zero interest rate, that is ridiculous on its face. Banks are in business to make money, just like any other business.

I agree with you about piling up six figure debt to get a degree with no marketable skills. Students and parents need to look carefully at the financial realities of a college education. An engineering or accounting degree is more likely to land a decent job than liberal arts. If you really want to study art history, a community college would make more sense than a six figure loan for an Ivy League School. College is in general too expensive, but as Judge Smails said, "The world needs ditch diggers too".

Amortization schedules are not difficult to work out and I agree the bank should provide one if asked (maybe even whether asked or not). As for the consequences of not paying back the loan, I think the onus should be on the borrower to review the terms of the loan and understand what they are getting into. Same logic applies for the potential consequences of co-signing.