Fogdog
Well-Known Member
what do you mean by price gouging? Oregon State University tuition
Bankruptcy in other areas has been shown to be a benefit to the economy, what makes student loans different?
For one year (three terms), Oregon State University tuition is about $10,000. Is this the price gouging you are talking about?A student loan is an unsecured debt, generally backed by the government, tax payer dollars.
A mortgage or car loan are examples of secured debt. If you default on said loan or declare bankruptcy, the debtor can take secure their collateral in exchange for some (or all) debt forgiveness.
A personal loan, through a private lender, is an unsecured debt. If you default on said loan or declare bankruptcy, the debtor has little recourse to collect on monies owed.
An interest rate is the rate at which a borrower pays based on their credit worthiness. A student loan carries an interest rate, set at a specific value, regardless of borrowers credit worthiness, however it is unsecured nonetheless. Sort of like an FHA loan.
If a borrower buys a home with a mortgage note, then declares bankruptcy, and includes his mortgage in the declaration, he no longer owns the property and is no longer responsible for that loan, but he then has no more house. If a borrower buys an education with a student loan, then declares bankruptcy and includes his student loan in the declaration, the government can't take bank his education.
Absolving people of their student loans is not the answer. Fixing the price gouging colleges and universities practice is the solution.
Bankruptcy in other areas has been shown to be a benefit to the economy, what makes student loans different?