Student Loans & Bankruptcies (was Re: creative financing)

[Gordon Fitch]

Kelley Walker:
> i gather from this convo that you can Never default on your stud loan, right?
> 
> which is fine if you ask me.  if, however, it was the case that you could 
> default on your student loan and that people here would be imagining not 
> paying back "the gov", then i'd just like to point out that doing so is 
> absurd --unless you truly are penniless and unless this is some sort of 
> Pivard and Clowen welfare overload strategy (and even then...). stiffing 
> the gov is stiffing everyone.  and the net effect of stiffing the gov means 
> that people who need the money down the road will pay more. (which is why 
> the vocabulary of statism and the use of the words "government" or the 
> "state" to speak of how things will be paid for is so damn misleading -- so 
> much so that i feel like pulling a Cox.)
> 
> e.g. one of the reasons _I_ had a hard time getting a loan as an 
> financially independent 18 year old was because of the pieces of shit who'd 
> defaulted on their loans in the 70s-- the infamous stories we had heard of 
> docs and lawyers who never paid the money back. true or not, i don't 
> know.  but the net result was a crack down and some pretty severe 
> limitations which meant that, at the time, there was a catch 22 for 
> financially independent students who ended up having to wait three years to 
> get any financial aid so they could go full time and get the loans.

I don't see a linkage between the cause and effect here.
First of all, the ruling class decides how much of their
resources they're going to devote to education -- the paths
up the pyramid -- and how much they're going to make people
suffer to get to those resources.  This is probably a how-
much-the-traffic-will-bear sort of thing, but there may be
some element of beheading the lower orders by absorbing
the more intelligent, restless and ambitious of them. 

  
Afterwards, there may be some mummery about the decision,
which could include probably corrupt legislators whining about
profligate ex-students and that sort of thing; but if what
the ruling class cared about was actually loaning the money
but stopping intentional defaults, it would be irrelevant to
reduce the amounts loaned or increase the difficulty of getting
them; the issue would be enforcement of repayment, which the
government certainly has the power to accomplish.

Given that many kinds of support for higher education have
been withdrawn over the last twenty or thirty years, I think
we can gather that the increased difficulty of getting student
loans is part of a larger picture of, one might say, making
the ruling class's pyramid's sides steeper, for whatever reason
those who attend to such things may have for doing so -- the
reinstitution of feudalism, maybe.  It has nothing to do
with a few Boomers wantonly reaping the government's
largesse, which was only to be expected.