State backed credit guarantees are a conditional obligation, meaning they don't affect the state balance sheet (until they do, all at once). It's like crack for central governments.
I imagine also applies when a person declares bankruptcy. Bank will repossess the home, resell it, if it incurred any damages after charging hefty interest it will get the money from taxpayers (ie from the government).
When we get another 2008. When enough people default on their debt, the government (i.e. the taxpayers) is now on the hook to guarantee these loans (i.e. bail out the banks).
Ok, call it delinquency. You can't legally default on student debt, but functionally, those who have not and will never make their repayments have defaulted, you're just not calling it that.
State backed credit guarantees are a conditional obligation, meaning they don't affect the state balance sheet (until they do, all at once). It's like crack for central governments.