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> They qualify for personal bankruptcy like any other consumer or investment loan You can't do this, nobody will pay them back. I'll take 7 years of shit credi

by aianus 11y ago

> They qualify for personal bankruptcy like any other consumer or investment loan You can't do this, nobody will pay them back. I'll take 7 years of shit credit for 200k cash, thank you very much.

ChuckFrank 11y ago
Then don't give them the loans. That's how the system works. And if they don't get the loans, force the colleges, and the college towns to compete for the lesser funds. Why should student loan originators get a free ride, when other consumer or investment loan providers don't?
- sokoloff 11y ago
  Because the thinking was that by allowing access to higher education to less well-off students, you could end or reduce the classism and perpetuation of same. A loan for which no collateral can ever be repossessed necessarily has a different economic profile than a personal loan and even moreso than a real property loan. Absent those protections, you would see a very different (read: people who need loans won't qualify) student lending market. Whether that's good or bad is a matter of which there will be a variety of opinions.
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forrestthewoods 11y ago
Good. The market would quickly self-correct. It's pretty good at doing that. No more 6 figure loans for english degrees. No more automatic 80k loans for shitty technical colleges where most graduates can't even get a job. The whole thing would sort itself out overnight.
- ChuckFrank 11y ago
  And remember, who is getting the money for those 6 figure English degrees? It's not the students. They are liable for the funds, and they do get the degree, but if you follow the money it goes to the universities, and within the universities, it goes increasingly to high paid administrators, who pad their work with increasing capital expenditures on building construction and the necessitated salaries that goes with so many projects on the table, and not the faculty.
  - norea-armozel 11y ago
    This is partly true. What I've seen personally is that with each increase in the tuition I experienced they were busy throwing that money at facilities and whatever else they could think up. Some of it was decent like actual improvements to aging buildings, but most of it was BS facilities like completely redoing the student center which had no real issues and been renovated barely two years earlier. It seems like the universities are following the same pattern that many hospitals have done: if they have money they must spend it even if it's not to the benefit of its consumers or its shareholders. It's like these institutions have replicated the Stalinist "make every thing big" mentality.
    - ChuckFrank 11y ago
      It's the easiest way to justify the accelerating administrators incomes. And they say they have to do it to maintain the competitive advantage, over other schools that are doing the exact same thing. See UC Davis, where they are building a huge new Art Museum, to compete with the one being built right now in Berkeley. Here's the thing, UC Davis is NOT an art school. It's an ag school and should be focusing its resources on that. But no, building an art museum justifies the salaries of all the people that are involved.
toomuchtodo 11y ago
I don't think you understand. Even if they don't do this, people will default. There is over $1 trillion in outstanding student loan debt. The people who are defaulting have no assets, and don't have enough income worth garnishing. They are, for the most part, judgement proof.

by aianus 11y ago

> They qualify for personal bankruptcy like any other consumer or investment loan You can't do this, nobody will pay them back. I'll take 7 years of shit credit for 200k cash, thank you very much.

ChuckFrank 11y ago

Then don't give them the loans. That's how the system works. And if they don't get the loans, force the colleges, and the college towns to compete for the lesser funds. Why should student loan originators get a free ride, when other consumer or investment loan providers don't?

sokoloff 11y ago
Because the thinking was that by allowing access to higher education to less well-off students, you could end or reduce the classism and perpetuation of same. A loan for which no collateral can ever be repossessed necessarily has a different economic profile than a personal loan and even moreso than a real property loan. Absent those protections, you would see a very different (read: people who need loans won't qualify) student lending market. Whether that's good or bad is a matter of which there will be a variety of opinions.
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forrestthewoods 11y ago

Good. The market would quickly self-correct. It's pretty good at doing that. No more 6 figure loans for english degrees. No more automatic 80k loans for shitty technical colleges where most graduates can't even get a job. The whole thing would sort itself out overnight.

ChuckFrank 11y ago
And remember, who is getting the money for those 6 figure English degrees? It's not the students. They are liable for the funds, and they do get the degree, but if you follow the money it goes to the universities, and within the universities, it goes increasingly to high paid administrators, who pad their work with increasing capital expenditures on building construction and the necessitated salaries that goes with so many projects on the table, and not the faculty.
- norea-armozel 11y ago
  This is partly true. What I've seen personally is that with each increase in the tuition I experienced they were busy throwing that money at facilities and whatever else they could think up. Some of it was decent like actual improvements to aging buildings, but most of it was BS facilities like completely redoing the student center which had no real issues and been renovated barely two years earlier. It seems like the universities are following the same pattern that many hospitals have done: if they have money they must spend it even if it's not to the benefit of its consumers or its shareholders. It's like these institutions have replicated the Stalinist "make every thing big" mentality.
  - ChuckFrank 11y ago
    It's the easiest way to justify the accelerating administrators incomes. And they say they have to do it to maintain the competitive advantage, over other schools that are doing the exact same thing. See UC Davis, where they are building a huge new Art Museum, to compete with the one being built right now in Berkeley. Here's the thing, UC Davis is NOT an art school. It's an ag school and should be focusing its resources on that. But no, building an art museum justifies the salaries of all the people that are involved.

toomuchtodo 11y ago

I don't think you understand. Even if they don't do this, people will default. There is over $1 trillion in outstanding student loan debt. The people who are defaulting have no assets, and don't have enough income worth garnishing. They are, for the most part, judgement proof.