I don't know how i feel about this.
I mean, shouldn't the individual be able to clean up their balance sheet the same way a corporate entity can when filing for bankruptcy?
Wouldn't that make lenders think twice about easy student loans if they realize that they may lose out? Therefore bringing skyrocketing tuition costs down? AND, it should be extended to federal loans also.
The Obama administration urged Congress to make it easier for people to discharge a portion of certain student debt by filing for bankruptcy protection.
The recommendation, in a report by the Education Department and the Consumer Financial Protection Bureau, wouldn't affect the vast majority of student debt, which is issued by the federal government. It would apply only to the roughly $150 billion, or 15% of total outstanding student debt, issued by private lenders such as SLM Corp.'s Sallie Mae and Wells Fargo & Co.
Consumer bureau chief Richard Cordray said Congress should consider modifying a 2005 law that, except in rare circumstances, prohibits discharging private student loans through bankruptcy.
Put yourself in the shoes of a 22 y.o. graduate...rack up 100k in student debt then either slave to repay or declare bankruptcy and your FICO is 700 by your thirties. No brainer.