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How would reducing the costs of going to college drive down the number of people going to college? To clarify what I mean: If student loan debt is dischargeabl
by wskinner 9y ago
How would reducing the costs of going to college drive down the number of people going to college?
To clarify what I mean: If student loan debt is dischargeable, that means that taking out a loan for college is actually less risky. We should expect more people to do it, not fewer.
- pandaman 9y agoIt makes loan itself more risky and thus more expensive. Fewer people will take loans at, say, 22% APR (a good rate for unsecured loan) than at the current rate (3-7%?).
- scryder 9y agoCompanies comfortable offering loans to risky candidates will feel far less comfortable doing so. There is because there is some point where the ratio between amount of money requested, and expected postgraduate earnings for the chosen degree, would make for a bad deal due to the likelihood of default. It’s less risky for students, but loan providers won’t want to overextend themselves to accomodate institutions who promise students the moon and demand sums they won’t be able to repay to “give” it to them.
- wskinner 9y agoMost student loans come from the federal government, and the rates are fixed regardless of risk. So what you and parent are really suggesting is increasing interest rates on student loans, which I totally support. Getting the government out of the student loan business so that the rates can be determined by markets would seem a good first step.