Let's take the morality out of it. It's been injected in there for the benefit of the lenders.
They charge an interest rate to cover their risk. Right now, with the fact that debt holders cannot default, they are getting an unfair deal. Defaulting on the debt and refusing to pay effectively triggers the risk that they were charging interest on.
Like strikers refusing to work until better working conditions are provided, so too are debtors withholding payment doing something noble.
Just because loans cannot be discharged in bankruptcy doesn't mean they are risk free. Some people die before repaying their debts, some people leave the country or otherwise become impossible to track down. In these cases, the bank eats the cost of the loan and has to make it up on other loans. risk is limited not eliminated.
> It's been injected in there for the benefit of the lenders.
Whether that's true depends on your moral framework, doesn't it?
> They charge an interest rate to cover their risk.
That's not exactly correct. I mean, a portion of the interest rate is due to risk, but another portion of it is because lenders need a return on their investment, or they won't lend. Moreover, student loan debt is not totally risk free (as we can see by the fact that $150B of it is in serious default).
> Like strikers refusing to work until better working conditions are provided, so too are debtors withholding payment doing something noble.
There is a difference. A person's agreement to work must be continuously in effect. They can withdraw it at any time, with no consequences other than that the ongoing benefits of their employment should also terminate immediately. That is, most non-union workers are working without a prospective agreement in place that obligates them to provide future labor. And when union members strike, it's normally when they are without a contract. Not in the midst of an existing contract with management.
The same is not true of an agreement to pay back a debt. It is prospective: "in the future, I will pay back such and such amount, on such and so terms." You can argue a lot of different things about these notes -- whether they're fair, whether the people agreeing to them are capable of understanding them, etc. Should the age of majority be raised? Should people be required to take a test to ensure they understand contracts before they are allowed to enter into them? And you can also argue about policy that might ameliorate the situation. But there is little contractual similarity between refusing to repay a loan and striking.
They charge an interest rate to cover their risk. Right now, with the fact that debt holders cannot default, they are getting an unfair deal. Defaulting on the debt and refusing to pay effectively triggers the risk that they were charging interest on.
Like strikers refusing to work until better working conditions are provided, so too are debtors withholding payment doing something noble.