Recovery threatened by runaway student loan debt

[Orrex]

3. Why do are student loans permitted to accrue interest?

Interest is, among other things, intended to offset the risk of default, but since--practically speaking--you can't ultimately default on these loans, then I don't see why the lenders are permitted to charge the interest rates that they do. Sure, you can put off repayment, but unless you're lucky enough to die or become totally and permanently disabled, then they'll get their money.

Plus thousands and thousands and thousands of dollars in usuriously high penalties, also inescapable.

Here are just a few ways that the situation could be vastly improved for both the victims and the economy:

1. A system-wide forgiveness of a certain amount on each loan ($10K or $20K or whatever)

2. A general amnesty of X number of years during which the loans are suspended, accruing no interest and incurring no penalties

3. Forgiveness of all student loan penalties incurred to date

4. Making student loan debt subject to bankruptcy


Lenders of student loans are every bit as predatory as credit card companies, with the added bonus that you can be drawing nothing but social security 70 years from now and still be required to pay 30% of your gross income each month.