You do, however, utterly trash your credit score when you declare Chapter 7 bankruptcy; essentially forfeiting your ability to take out any sort of loan in the future. You also, I'm given to understand, can lose everything else you own that might be of any value which could be sold off; leaving you with basically nothing.
You are aware that mortgages are written down or written off all the time right? Or debts sold for dimes on the dollar to debt collections. Or all the more convoluted forms of debt shrinkage with speculative investments.
This isn't entirely the case, though it's close Bear in mind Bankruptcy can be stupid complicated and rules change per every state and in some cases per every town, but usually you can keep 1 car (up to a certain limit of value, you're likely to keep a Volkswagen and unlikely to keep a Rolls Royce), 1 house, all your clothes and furniture, and general day-to-day items.
First, right after college is when someone owns the least amount of stuff, which is why it is so valuable, and you have your parents to fall back on. Second, they definitely have exceptions for a number of things, depending on state. This frequently includes a car/motor vehicle up to a certain amount, and basic things like necessities. The only thing of value one might lose is their laptop, and that may or may not be considered under exemptions.
The mortgages that were written off very much aren't those where people are well off and likely to pay. Most of the mortgages were written off by the bank repossessing the home, or by renegotiating to try to get as much value as possible. Some were given up on, because there was no profit to be made, but that usually means that the house itself is near worthless too. So I don't think you really have a point here. Actually, you may have proved my point! When people weren't able to pay what they owed, the economy did collapse, hence the economy does rely on people paying what they owe, or there being consequences.
www.forbes.com
Then they just don't get a job for X number of years (as is already happening anyway), live with their parents, and declare bankruptcy then. Worse, you now incentivize this behavior, because now there 10000s reasons not to get a job.
As for this, the average comes from the American community survey, which caps income figures at 300k to both not skew data and also to preserve privacy. So yes, average figures here are pretty good, as its actually well above 100k.
Don't get me wrong, I don't like the system, but student loan forgiveness isn't the solution. The best way is for people to literally invest in other's education and get a percentage payoff of future earnings, as it nicely aligns incentives.
See, this is backwards. It's the loans and easy credit that allow the University to charge high prices. If there wasn't a college loan system with such easy credit, the University's couldn't charge such high prices. In pure econ terms, the college loans make students insensitive to price. That's a huge problem.
For most people, it comes down to everyone and their uncle telling them that they had to have one in order to get a decent-paying job, and unfortunately, there's actually some truth to that. Even in jobs where a degree would not be necessary, it's just an easy way to eliminate job candidates. Now that the market is saturated, it's switched to arbitrary GPA cut-offs.
I'd agree with this, with the added problem as others have mentioned that there's an entire complex within public schooling most of those students have in their background about the necessity and glory of attending college (and not providing nearly enough of the proper tools universally enough to see those students sit down and make a more rational cost-benefit kind of calculation). Which is where it gets messy, because while I'd still say those folks took out the loans and so have some responsibility for them, this is one instance where 'society' and the way teachers, employers, administrators and politicians all talked-up college degrees definitely had impact on the decision-making...And college administrations have definitely benefitted from rising attendance-rates alongside skyrocketing tuition.
I think the assumption here was that the person who took tens of thousands in student loans spent it on a degree worth a damn. Big ask I know but hey, what can you do?
The answer to this should generally be none in my opinion. Because at this point its more like joining clubs than they are what economic principles you personally ascribe to. Capitalism is as much a Buzz word as Socilaism or anything else.
I grew up and went to school in a North GA county. Well, North Metro Atl..we had multiple trade classes in my highschool.