I went to a flight school in Fl. in 2003. Before I started I asked the school rep. if there was income potential to be able to survive financially on the other end of it. I was assured that there was. Key Bank was all to happy to give out the money for the school. It wound up being $76k for 11 months of training. No degree. The only qualification you came out of the school with was to teach other people to fly. You can do the same at your local aitport for a little less than a third of the cost - hindsight.
I am flying jets now. I transport hundreds of people a day. My w-2 for 2008 was $27,000. I have been a professional pilot since 2004. in 2007 my wife, who works at Wal-Mart, made a thousand dollars more than I did flying for a living. My burden for my school loan has balooned to over $112k.
The responsability for borrowers to repay their bills is obvious. I had a credit score of 780 before I went to school.
The problem comes when we have financial institutions in this country that get legal protection that reduces their risk to zero. There is no incentive for the lender to be responsible when there is no risk to them. It empowers the financial institutions and the "schools" to inflate the reasonable cost of education/training based strictly on how much money they're going to make with no regard to the unfortunate borrower.
Saoplady seems to be overemphasizing the responsiblity of the borrower and trying to paint the financial institutions as the victims in this debacle. As a pilot I am used to dealing with the reality of the situation, which is this. Making private loans non-dischargeable strongly encourages financial institutions to abandon any sense of responsability and risk management when it comes to doing business. Good salesmanship and creative language mixed with the optimism of potential students makes for easy pickins for schools and financial institutions alike. When a borrower can't pay and goes into default, it just translates into greater income for the financial institution over time. Again, there is no incentive for the financial institution to act responsibly.
Bankruptcy is the penalty for an individuals bad decision. It's also an option for the financial institutions which holds the notes that are not dischargeable to the individulal. It is the last resort when everything else has been exausted. It is not a free start over button. The fact is that the vast majority of people that have to file for bankruptcy protection - as well as buisinesses - do so because there is no other reasonable option. When there is an aspect that is protected - that is not public money, court/criminal costs or fines, or child support - it traps the individual in virtual financial slavery. Ultimately it prevents the individual from contributing to the overall health of the economy. No one in the situation that I am in will qualify for a car or home loan or credit card. There are thousands of people out there like me that are a liability to this economy because of the risk of the "education" lenders are zero.