• rayyy@lemmy.world
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    10 months ago

    This could be good. If students default en mass congress might be forced to enact debt forgiveness

    • vonbaronhans@midwest.social
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      10 months ago

      Unfortunately student loans are one of the few types of loans you cannot default on or get relief through bankruptcy. From what I understand, anyway.

    • Death_Equity@lemmy.world
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      10 months ago

      The only way that would happen is if financial entities can unwind their student loan debt derivatives that are larger than their total holdings, so that would tank the economy.

      The best part? If student loans aren’t paid or are forgiven without unwinding, the debt is worthless and the derivatives implode which would cause an unwinding that would be multiples worse than 2008.

      So people with student loans have a gun to the heads of Wall Street and the economy, Wall Street has a gun to their own head and the economy. The only way to avoid an economic failure is for loan payments to happen because that is how the system was designed.