- Aug 17, 2011
In the same way by federally backing student loans the government has created an incentive to write bad loans.They did the same thing in the mid 90's with housing loans. Gave out loans for $500K houses to a single woman making less than $40K/yr There is no way payment can be afforded. But then the person accepting the loan should have been smart enough to see that before they signed. The American tax payer got stuck then by being forced to bail banks out. But had the government gotten involved in the 1st place and caused the problem. The Community Reinvestment Act regulations break down home-loan data by neighborhood, income, and race; encourage community groups to complain to banks and regulators by allowing community groups that marketed loans to collect a brokers fee: Fannie Mae allowed to receive affordable housing credit for buying subprime securities.
There's zero reason to ever pay on a student loan if you do not intend on continuing your education. It's zero impact on your credit and can't be collected. The banks do not care. These loans are federally backed. Paying your loan off is bad for the bank. It's far better for them if you accrue interest your entire life for the taxpayer to pay as these loans are federally guaranteed.
The fact that you don't have to have a plan to use your degree to pay back your loans as you would for a business loan is ridiculous.
These absolute cretins who are against government subsidized university and also fine with the way things currently work literally just don't understand that we already have it. Just take out the loans and never pay them. No one needs forgiveness. Forgiveness is actually just getting rid of taxpayer liability on these loans.