Borrower Risk – Mortgage v. Student Loans

Lets say you have to decide on defaulting on your student loans or defaulting on your mortgage. In many ways, the mortgage may be the good choice:
1. Student loans are generally not dischargeable in bankruptcy;
2. After foreclosure, the lender (in some states – check with you attorney) may not be able to go after you for any remaining balance.

While I do not condone or otherwise recommend going to foreclosure, I do not the “risk” student loan borrowers have. For people like doctors, they may have hundreds of thousands of student loan debt. Faced with a choice between paying down the mortgage or paying down the student loan balance, the student loans are a no brainer.