Not true... people were talking about this in the late 90's as being a bad idea because of misaligned incentives.

Loans are supposed to be inherently risky to the bank issuing the loan. Managing that risk is their business, and the reward for doing it right is the interest payments.

I remember people back then talking about "if the loans are non-dischargeable, then the bank is pretty much guaranteed it's money back, making it a no risk proposition to them. What's stopping them from becoming student loan mills? What's stopping colleges from asking for more and more money if the banks just lend it no risk?"

These ideas were out there, but get drowned out by the voices of the big pocket companies that are proposing the legislation. Tons of articles talking about the risk being overblown, the results are wonderful, etc. Think about the kids, good for 'murica, etc.

The big messages you hear over and over again in the media are being payed for by groups that aren't particularly interested in benefiting you. This is not a new problem, it's been this way for a long while.

And here we are 25 years later. Wondering how we got here. When anyone with a brain at the time knew this was coming.

The problem is only getting worse because of media consolidation and the vast reach of the internet into everyone's eyeballs. Be skeptical very of what you read.