If you still have a balance left of the loan when you die, then by the time value of money you have actually never paid it back. Plus with inflation it seems very unlikely that you will ever have to pay back the real value of the loan if you spread the payments over your lifetime.
But that's not the system proposed - what you're describing is already what we have - i.e., pay it off over however long period and then you're done.
What I was responding to was the notion that instead of signing up to owe a particular sum, you sign up to owe a portion of all future income - and thus remove the risk of being bankrupted by your student loan (e.g., if you're out of work, you owe nothing, because you make nothing).
The trick here is that by removing your risk from that end, you are committing to essentially an unlimited mountain of debt. No lender will give you an easy out from a loan without a steep downside on the other end - like a big, nasty private income tax for the rest of your life.
Comments
If you still have a balance left of the loan when you die, then by the time value of money you have actually never paid it back. Plus with inflation it seems very unlikely that you will ever have to pay back the real value of the loan if you spread the payments over your lifetime.
But that's not the system proposed - what you're describing is already what we have - i.e., pay it off over however long period and then you're done.
What I was responding to was the notion that instead of signing up to owe a particular sum, you sign up to owe a portion of all future income - and thus remove the risk of being bankrupted by your student loan (e.g., if you're out of work, you owe nothing, because you make nothing).
The trick here is that by removing your risk from that end, you are committing to essentially an unlimited mountain of debt. No lender will give you an easy out from a loan without a steep downside on the other end - like a big, nasty private income tax for the rest of your life.
Sorry, I totally missed that. Thank you for pointing it out.