Originally Posted by
The Juice
May be counterproductive. If this passes banks would have to increase rates on all new loans to counteract the higher number of defaults. Now you have a kid with a $100,000 loan at 12% and making $20,000 a year. Does not take a genius to see that will result in more BK filings and the downward spiral continues
Yeah but in the end it might prevent said student from getting the loan in the first place. As it is the lending companies have no reason to be concerned with a person's ability to pay back their loans. If they're risking defaults they might look at the career this student is going into and determine proactively whether they can pay for it. Go in to a BMW dealership and try and get a loan for their most expensive car, if they don't like what they see in your credit report and stated income, they won't hand over the keys.