Well of course you get a better rate on a car loan:
1) A repossessed car has value.
2) There is competition in the car loan business.
3) Car loans are based on real economic values - i.e., What is the credit worthiness of the applicant, and What is the value of the car serving as collateral?
The only downside (from the lender's perspective) to a car loan is dischargability, but car loan lenders know that risk going in, and price it in (charging higher rates or outright refusing bad credit risks) and look at the worst-case scenarios (if the person doesn't repay, what's the repoed car going to be worth to us?) as part of their decision-making process.
That said - I don't buy the argument that no one would make student loans if they were dischargable in BK - first, I remember my undergrad days, when I had to dodge at least four credit card offers daily on my way to class. Creditors _want_ to give credit to college students - God only knows why. We had to actually pass laws to limit them.
Second, the government is making the loans now anyway. So there's no private business to scare away in the first place.
That said, the move against for-profit schools being a step towards reform for the rest of us? No, they'll declare victory on the "crisis" and then not act for years. It's surprising they're doing even that much, after all they "solved" the crisis last year as part of the health care package.
