Will Congress Re-write Bankruptcy Laws For Student Loans?

For the Democrats' next act, they appear ready to re-write the rules that govern the repayment of student loans. Many students today finance a portion of their education through private loans, which are generally very low cost loans because the institutions that underwrote the risks realize that the students cannot expunge the debt simply by filing bankruptcy.

Fast forward to 2010. Obama has outlawed the private loan market and now the government controls it all, supposedly at a great "savings" to taxpayers. Of course, this "savings" assumed underwriting risk and operational efficiencies on par with private institutions, which will almost certainly not be achieved. Further, if Congress re-writes the bankruptcy laws, it is a near guarantee that more students will simply file for bankruptcy to expunge their debt, resulting in hundreds of billions of dollars in taxpayer losses.

Ultimately, this benefits another great Left-wing cause - universities, whose prices over the last 20 years have increased faster than even health care premiums. Under Congress' watch, you can practically guarantee that this trend will continue long into the future.