1. Are we talking about simply cancelling the load (meaning the Federal Treasury pays it), or allowing the borrower to file for bankruptcy (reducing the Treasury’s liability)? If bankruptcy, would Chapter 13 be required, and if Chapter 7 is allowed, would people who used student loans to buy realty be required to give up their equity (in some states, equity in a home is exempt property). Will the amount of the “forgiveness” be taxable income (meaning rich people who get out of their student loans still get a massive tax bill).
2. Do we distinguish between those who used the student loans for living costs (to avoid having to “live like a student”), and those who paid tuition? Do we treat those who used loans to go for fancy school the same as those who were using the loans to attend less expensive schools.
3. Do we expect the real beneficiaries of the loans, the colleges that got the money, to pay some of the costs. It can be argued that the major impact of student loans was to allow colleges to overpay their professors and to created bloated and overpaid administrations.