Here's the thing... when you do it en mass, it doesn't matter if it's illegal because nobody can do anything to stop you. It's called a strike.
Apparently the people that started http://rollingjubilee.org/ were originally working on a student debt strike project. Not sure exactly why they switched to a medical debt project, but it's certainly a worthy one.
There are no "lenders of government guaranteed loans" anymore, and there haven't been for at least nine years. Either the government is the lender, or it is a completely private (and dischargeable) loan.
However I still have a government guaranteed loan that was issued by a bank. If I default on it that bank isn't selling my account. They'll garnish my wages. Also I never plan on paying off my loan early! It's only 2.25% apr! I got lucky. Rates were really really low when I graduated and consolidated my loans.
I only mentioned them because I was googling for student debt strike projects and I'd heard of them before. The jubilee project is a form of mutual aid and less a strike.
The point of a strike is to build power for the striking class so that the creditor class is forced to make significant concessions up to and including relieving all of it. To be clear, this would mean huge numbers of people simply stop paying in a coordinated and public fashion.
If they stop paying government student loans en masse and then hid thier income (get paid and work cash only) all that would happen is our current trillion dollar deficit might increase a little bit. The government budget takes into account payments and interest from these loans. The total amount of all the loans is likely spread across repayments over 20 years.
That's a really great argument for free education, which is an argument the strikers would make. I do think though that you are underestimating the power ordinary people have. If the various funding mechanisms suddenly go into crisis, this will cause a very large ruckus with the potential for positive change.
"Student debt has surpassed $1 trillion partly because it is one of the most protected forms of debt by federal law. Student debtors can rarely discharge their loans in bankruptcy and lenders have rights to garnish wages and social security payments. The vast majority of student loans have these federal guarantees. We cannot buy these loans because there is no secondary market."
Yes. To default just don't pay. What I think you meant to ask was is there a way to escape repayment (get the debts wiped out in bankruptcy). Yes. It is possible to ask and get a judge to wipe out the student debt loan but the bar is usually fairly high and unlikely. Can it be done en masses or exploited. Not likely. You'd likely need Congress' involvement. Good luck with that and good luck with Devos.
I have wondered if the right person in the right place could go Mr Robot on the Dept of Education’s loan data, nuking all borrower data (prod, backups, everything). “Non Congressional Sanctioned Forgiveness” thought experiment.
Assuming that is a legitimate question: No. That data resides in many places... with the loan servicers, the NSLDS, the Guarantors... spread in locations around the country.
