If I remember correctly, Lawrence Friedman's Legal History of the United States says something interesting on the topic of loan forgiveness. When times are good, US laws tend to be pro-creditor, to encourage lending. When times are bad, the law thermostats to pro-debtor mode. It makes sense to me. (And if you think that creditors will price in the eventual switch to pro-debtor mode, I've got a whole bunch of Argentine bonds that I'd like to sell to you, along with my patrimonial stake in the Brooklyn Bridge. Creditors have animal spirits, too!)
On student loans, one [major] improvement would be to take away the favored treatment of student loan lenders in the bankruptcy code. Once upon a time student loans were like any personal loan--if you can't pay it off, you can discharge it in bankruptcy. But in the early 1970s there started to be lots of stories about how feckless kids were ditching their loans by filing for bankruptcy while they were still young. So Congress started a slow and steady march to make student loans functionally non-dischargeable in bankruptcy. Today, a student loan can be discharged only via an "adversary proceeding" (a lawsuit within the bankruptcy proceeding) in which the student borrower has the burden of proof, and the burden is extremely hard to meet. Student loans become akin to a permanent servitude.
Why Do People Think $10,000 of Student Loan Forgiveness Is a Bad Idea?, &
If I remember correctly, Lawrence Friedman's Legal History of the United States says something interesting on the topic of loan forgiveness. When times are good, US laws tend to be pro-creditor, to encourage lending. When times are bad, the law thermostats to pro-debtor mode. It makes sense to me. (And if you think that creditors will price in the eventual switch to pro-debtor mode, I've got a whole bunch of Argentine bonds that I'd like to sell to you, along with my patrimonial stake in the Brooklyn Bridge. Creditors have animal spirits, too!)
Because they had rather talk about that than the contents of those boxes from Mar a Lago
On student loans, one [major] improvement would be to take away the favored treatment of student loan lenders in the bankruptcy code. Once upon a time student loans were like any personal loan--if you can't pay it off, you can discharge it in bankruptcy. But in the early 1970s there started to be lots of stories about how feckless kids were ditching their loans by filing for bankruptcy while they were still young. So Congress started a slow and steady march to make student loans functionally non-dischargeable in bankruptcy. Today, a student loan can be discharged only via an "adversary proceeding" (a lawsuit within the bankruptcy proceeding) in which the student borrower has the burden of proof, and the burden is extremely hard to meet. Student loans become akin to a permanent servitude.
and...it is always fun to troll Thomas Friedman!