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If the feds didn't have the program, private firms would come in and still offer loans. However these loans wouldn't be offered to students who on average could

If the feds didn't have the program, private firms would come in and still offer loans. However these loans wouldn't be offered to students who on average couldn't realistically pay them off due to defaults (Something loans are protected from today). For example giving 150k of loans to an engineer is a sound investment. Engineers at the low end make 50-60k/year. And most likely pull 100k/year after a few years.

toomuchgov 8y ago
Is there a lucrative job market for EEs?
smsm42 8y ago
> However these loans wouldn't be offered to students who on average couldn't realistically pay them That's the point. > giving 150k of loans to an engineer is a sound investment No it is not. I've pretty good education (one can claim I maybe over-educated a bit even since I've studied tons of things I never use), I earn six figures, and my education did not cost even close to 105k. And I would be terrified to take a loan of 100k+ even with my current income level, stable job and some assets I've accumulated over the years of work. The only thing I would take such a loan on is a house, but definitely not because I want to attend nicely-named social gathering group that by the way also gives degrees. How a person can take such a loan with no income, no specific job prospects, no savings, no clear perspective of how it would be paid off - just boggles the mind. And it's not like community colleges do not exist... Moreover, it is absolutely clear to me that the most of 100k is paying for services the students do not need and for the fact they got the coveted paper. Education per se does not cost that much, you can clearly see it in price dynamics and administrative vs. teaching staff dynamics. It's not like professors are known for being billionaires either. The costs inflation is happening elsewhere. And these loans enable it and drive it - what's the incentive to cut costs if the students will just get another government loan, never refused, each time you raise tuition?
- cobookman 8y ago
  Sorry let me clarify, 150k of loans to an engineer is a sound investment for the investor. Its not a great investment by a student though.
  - smsm42 8y ago
    > 150k of loans to an engineer is a sound investment for the investor. Not really even that. Try to get an un-secured loan for 150k and see how happy the bankers would be without government backing to hand it to you and what the rates would be. You need a heck of an income to support such a loan, or mortgage-like duration. Even for 10 years, at 6% - which is very good for an unsecured loan, that's what secondary secured loans charge now, if you're lucky - it's $1660/month. On top of your other expenses, like mortgage or rent. And 10 years is a long time, what if the debtor changes her mind or something happens to her? Now add to that the fact that it's not even know if the debtor is going to actually finish the degree...

toomuchgov 8y ago

Is there a lucrative job market for EEs?

smsm42 8y ago

> However these loans wouldn't be offered to students who on average couldn't realistically pay them That's the point. > giving 150k of loans to an engineer is a sound investment No it is not. I've pretty good education (one can claim I maybe over-educated a bit even since I've studied tons of things I never use), I earn six figures, and my education did not cost even close to 105k. And I would be terrified to take a loan of 100k+ even with my current income level, stable job and some assets I've accumulated over the years of work. The only thing I would take such a loan on is a house, but definitely not because I want to attend nicely-named social gathering group that by the way also gives degrees. How a person can take such a loan with no income, no specific job prospects, no savings, no clear perspective of how it would be paid off - just boggles the mind. And it's not like community colleges do not exist... Moreover, it is absolutely clear to me that the most of 100k is paying for services the students do not need and for the fact they got the coveted paper. Education per se does not cost that much, you can clearly see it in price dynamics and administrative vs. teaching staff dynamics. It's not like professors are known for being billionaires either. The costs inflation is happening elsewhere. And these loans enable it and drive it - what's the incentive to cut costs if the students will just get another government loan, never refused, each time you raise tuition?

cobookman 8y ago
Sorry let me clarify, 150k of loans to an engineer is a sound investment for the investor. Its not a great investment by a student though.
- smsm42 8y ago
  > 150k of loans to an engineer is a sound investment for the investor. Not really even that. Try to get an un-secured loan for 150k and see how happy the bankers would be without government backing to hand it to you and what the rates would be. You need a heck of an income to support such a loan, or mortgage-like duration. Even for 10 years, at 6% - which is very good for an unsecured loan, that's what secondary secured loans charge now, if you're lucky - it's $1660/month. On top of your other expenses, like mortgage or rent. And 10 years is a long time, what if the debtor changes her mind or something happens to her? Now add to that the fact that it's not even know if the debtor is going to actually finish the degree...