MEGAN MCARDLE: Lending Bankrupt Students A Hand:

It is a great shame of the American financial system that we do not allow student loans to be discharged in bankruptcy. There’s no logic to it: “Well, you can’t pay all your other debts, but apparently, you can pay this one, even if it’s larger than all the others.” Its exclusion from the bankruptcy code, like the rules surrounding taxes, are a bit of special pleading from the government, an assertion that government obligations are somehow immune from the rules surrounding other sorts of debt.

As part of changes to the federal student loan program, the Barack Obama administration will be looking at relaxing the restrictions on bankrupting student loans. This is a change we should be looking at. But it has to be done the right way. . . .

At the very least, however, we could contain some of the damage by imposing a time limit on your ability to bankrupt loans — say, no bankruptcy until you’ve been out of school for 10 years. This would at least discourage the tactic that caused legislators to enact the student loan exception in the first place: that of taking out huge loans to attend professional school, then declaring bankruptcy as soon as you graduate.

Two thoughts: (1) I actually sympathize with many of these folks because, as has become increasingly clear, they were deliberately lied to by institutions of higher education in order to get the money. So bankruptcy is fair. But the institutions that lied should pay a price. Which leads to suggestion (2): The GOP should come up with a proposal that is significantly friendlier to borrowers, but that punishes the higher-ed institutions. That would neutralize the real purpose of this initiative, which is to buy votes for Democrats, while punishing the guilty. Who, conveniently enough, are overwhelmingly Democrats.

Of course, that’s probably true of the people in debt trouble, too, so it all evens out: Washington, DC has most-indebted students of any place in the nation.