• BombOmOm@lemmy.world
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    1 year ago

    People agree to take out loans in order to boost their education level and income later. However, these aren’t like a normal loan, where there is a physical asset securing the loan, so to make them work they cannot be discharged via bankruptcy. Some people find this idea predatory. However, it’s a core part of what makes them work at all. Otherwise, one could load up on the student loans, get their degree, declare bankruptcy, then go out into the job market with the boosted income and not pay back what they borrowed.

    During periods of very low interest, it can also be fiscally responsible to replace the loans with fixed-rate lower interest ones. During covid, this was pretty popular since interest rates were rock bottom.