Loan performance is dependent on school quality. Unlike other loan products, student loans are typically not underwritten based on the borrower’s ability to repay at loan origination; rather, ability to repay is realized by borrowers obtaining a good education that leads to gainful employment. It is critical that for-profit and other career education programs eligible are of sufficient quality that they do not saddle students with loans they cannot repay.
Relief for distressed borrowers. Borrowers should have access to meaningful income-based repayment plans if needed. For-profit college students should be granted relief from student loan debt obtained while attending schools making fraudulent claims. Any forgiven balances should be tax-free in order to preserve the benefits of forgiveness. Federal and student loans should be dischargeable in bankruptcy.