Personal Student Loan Detail
Some legislators believe meaningful assistance lies in amending the Bankruptcy Code to permit the discharge of private student loans in bankruptcy. It doesn't. Turning bankruptcy courts into turnstiles for the discharge of the least common form of student loan debt may temporarily assist some distressed borrowers, but the overwhelming majority will not be helped. Worse, the most vulnerable graduates could be exposed to ominous long-term consequences, impairing their future ability to borrow.
Another unintended consequence is a likely increase in the cost of debt for private student loan borrowers. Why? Each discharged loan is a significant loss to lenders, requiring them to reserve against such losses with costly capital. Initially, lenders will have little choice but to reserve more and offset this added risk by increasing interest rates. The resulting price hike to new borrowers will come at a time when they can ill afford it.
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Personal Student Loan
Some legislators believe meaningful assistance lies in amending the Bankruptcy Code to permit the discharge of private student loans in bankruptcy. It doesn't. Turning bankruptcy courts into turnstiles for the discharge of the least common form of student loan debt may temporarily assist some distressed borrowers, but the overwhelming majority will not be helped. Worse, the most vulnerable graduates could be exposed to ominous long-term consequences, impairing their future ability to borrow.
Another unintended consequence is a likely increase in the cost of debt for private student loan borrowers. Why? Each discharged loan is a significant loss to lenders, requiring them to reserve against such losses with costly capital. Initially, lenders will have little choice but to reserve more and offset this added risk by increasing interest rates. The resulting price hike to new borrowers will come at a time when they can ill afford it.
Personal Student Loan
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