5 ms·

Who is going to lend tens of thousands of dollars to an 18 year old with no income, no assets, and no credit?

by bedhead 8y ago

PopeDotNinja 8y ago
Then make college free!
- AnimalMuppet 8y ago
  With whose money?
  - PopeDotNinja 8y ago
    Taxes.
weberc2 8y ago
College shouldn’t cost tens of thousands of dollars to begin with; that’s part of the OP’s claim.
- everdev 8y ago
  That's how supply and demand works though. When people don't think the ROI is there prices will drop. Admission to a to school seemed like the only path to wealth when I was growing up. I don't think I can make that same claim for my kids. For whatever I have saved for them I'll offer to put it towards college or give it to them when they turn 20 to start a business.
  - nemothekid 8y ago
    The supply/demand equation for college is broken precisely because student loans are can’t be discharged. Every student essentially has an infinitely deep pocket to borrow against so colleges continue to raise prices.
    - everdev 8y ago
      Sure, loans help increase prices just as with cars and housing. But the supply/demand equation is still the same. A high number of high school graduates want those few freshman seats at top colleges and are willing to pay X over the next 10-20 years to attend. College prices will rise until they hit that number. The structure of the loan (interest rate, terms, etc.) is factored into the value of X. The problem comes when the actual value of graduating from a top college does not equal the expected value. That's where you get people making poor economic decisions (or when they don't read the interest rate on the loan). The people who have to pay $5k/month in student loans, but make $20k/month at their job are getting the deal they expected. But the people who knew they'd have to pay $5k/month but can only find a $8k/month job are having buyers remorse.
      - ryandrake 8y ago
        They are only willing to pay X because X=Y+Z, where Y is what they can afford and Z is the max loan they can get. If they couldn’t get that loan Z, market forces would cause college costs to approach Y.
        AnimalMuppet 8y ago
        True, but then only rich parents would be able to send their kids to college, because they'd be able to win all the bidding wars.
        nemothekid 8y ago
        There are only so many rich parents. Either (1) schools will close down, or (2) schools will lower prices. I'm willing to bet that the answer will be (2) for the vast majority of schools. Schools will not opt to stay open with 60k/yr tuitions and 0 undergrads.
        weberc2 8y ago
        We don’t have to speculate. There was a time before the federal student loan program and tuition prices were roughly 10% of their current price.
Goronmon 8y ago
Who is going to lend tens of thousands of dollars to an 18 year old with no income, no assets, and no credit? So, just to be clear 18 year olds getting tens of thousands in dischargeable loans is ridiculous, but 18 year olds getting tens of thousands in non-dischargeable loans makes total sense? I mean, I understand why if you are a person making money off student loans, the latter is a great situation to have. But for anyone else, I'm not sure I agree that it's something we should fight for.
- mrguyorama 8y ago
  I think you're missing the point. I believe they intend to mean that we should fix this problem without irreparably screwing over an entire generation of potential college students
  - ryandrake 8y ago
    I think the system is already screwing over an entire generation of college students, so too late for that one.
- RestlessMind 8y ago
  > I mean, I understand why if you are a person making money off student loans, the latter is a great situation to have. But for anyone else, I'm not sure I agree that it's something we should fight for. But when a student needs a loan to pay for their education, the person lending money is more important than everyone else. If you are not going to incentivize lending money for college debt and instead going to add risks (of not getting paid back because discharging loans is now easy), then you will have less loans in the first place.
  - dragonwriter 8y ago
    > But when a student needs a loan to pay for their education When a student needs money to pay for their education, why are we extending loans rather than need-based grants?
jpambrun 8y ago
This the the parent comment argument. No unlimited credit, no unbounded high prices. Alternatively cap un-bankruptable dept to a reasonable amount, say 15k/yr or something. It's pretty much how it works here in Quebec Canada and very few students end up with more than 40k CAN in un-bankruptable dept.
ble 8y ago
The federal government of the United States of America. I feel like your question is supposed to be making a rhetorical point but it has an extremely literal answer as of a few years ago.
VLM 8y ago
The HN reality distortion field is all kids will use their Stanford CS degree to work in tech for huge salaries. The reality is at least half of kids don't use their degree anyway. My waitress at the local restaurant isn't any better at waitressing because she has small mortgage sized student debt; in a hypothetical world where she couldn't get that education degree paid for, she'd merely be a happier less stressed waitress, which probably would result in better life for everyone. The concept of everyone should go to college is extremely Boomer; they're dying off and their beliefs are dying off with them. Likewise just wait until "Real estate only goes up!" dies out. Or watching TV pro sports being taken seriously as a hobby. Then you factor in demographic replacement; if most young kids are not native, they will not have legacy native beliefs. It doesn't matter what white hippies held dear in 1970, if a significant fraction of the kids are not legacy demographic. Demographic elimination means cultural elimination and nothing says "white boomer" quite like "Everybody gotta go to college"
- uncleamerica 8y ago
  Nothing says "black boomer" quite like "more black women graduate with degrees than any other group".
- ryandrake 8y ago
  A high school diploma used to be a signal that you were a reasonably educated person who could read and add things and manage to get by in most low or medium skill jobs. Today it doesn’t even signal that you are a barely functional adult. That’s sadly what college has become: the semi reliable signal that a person has even a remote chance of contributing to society. I wish there were signals that didn’t cost thousands of dollars but I don’t see any.
isk517 8y ago
Ideally any company or organization that requires educated employees.
dragonwriter 8y ago
> Who is going to lend tens of thousands of dollars to an 18 year old with no income, no assets, and no credit? Since the elimination of the Federal Family Education Loan program in 2010, there has been only one legally-possible lender for Federally-guaranteed student loans. And they aren't a for-profit corporation, or an entity that evidences much concern for babalncing spending and revenue.

Who is going to lend tens of thousands of dollars to an 18 year old with no income, no assets, and no credit?

PopeDotNinja 8y ago

Then make college free!

AnimalMuppet 8y ago
With whose money?
- PopeDotNinja 8y ago
  Taxes.

weberc2 8y ago

College shouldn’t cost tens of thousands of dollars to begin with; that’s part of the OP’s claim.

everdev 8y ago
That's how supply and demand works though. When people don't think the ROI is there prices will drop. Admission to a to school seemed like the only path to wealth when I was growing up. I don't think I can make that same claim for my kids. For whatever I have saved for them I'll offer to put it towards college or give it to them when they turn 20 to start a business.
- nemothekid 8y ago
  The supply/demand equation for college is broken precisely because student loans are can’t be discharged. Every student essentially has an infinitely deep pocket to borrow against so colleges continue to raise prices.
  - everdev 8y ago
    Sure, loans help increase prices just as with cars and housing. But the supply/demand equation is still the same. A high number of high school graduates want those few freshman seats at top colleges and are willing to pay X over the next 10-20 years to attend. College prices will rise until they hit that number. The structure of the loan (interest rate, terms, etc.) is factored into the value of X. The problem comes when the actual value of graduating from a top college does not equal the expected value. That's where you get people making poor economic decisions (or when they don't read the interest rate on the loan). The people who have to pay $5k/month in student loans, but make $20k/month at their job are getting the deal they expected. But the people who knew they'd have to pay $5k/month but can only find a $8k/month job are having buyers remorse.
    - ryandrake 8y ago
      They are only willing to pay X because X=Y+Z, where Y is what they can afford and Z is the max loan they can get. If they couldn’t get that loan Z, market forces would cause college costs to approach Y.
      - AnimalMuppet 8y ago
        True, but then only rich parents would be able to send their kids to college, because they'd be able to win all the bidding wars.
        nemothekid 8y ago
        There are only so many rich parents. Either (1) schools will close down, or (2) schools will lower prices. I'm willing to bet that the answer will be (2) for the vast majority of schools. Schools will not opt to stay open with 60k/yr tuitions and 0 undergrads.
        weberc2 8y ago
        We don’t have to speculate. There was a time before the federal student loan program and tuition prices were roughly 10% of their current price.

Goronmon 8y ago

Who is going to lend tens of thousands of dollars to an 18 year old with no income, no assets, and no credit? So, just to be clear 18 year olds getting tens of thousands in dischargeable loans is ridiculous, but 18 year olds getting tens of thousands in non-dischargeable loans makes total sense? I mean, I understand why if you are a person making money off student loans, the latter is a great situation to have. But for anyone else, I'm not sure I agree that it's something we should fight for.

mrguyorama 8y ago
I think you're missing the point. I believe they intend to mean that we should fix this problem without irreparably screwing over an entire generation of potential college students
- ryandrake 8y ago
  I think the system is already screwing over an entire generation of college students, so too late for that one.
RestlessMind 8y ago
> I mean, I understand why if you are a person making money off student loans, the latter is a great situation to have. But for anyone else, I'm not sure I agree that it's something we should fight for. But when a student needs a loan to pay for their education, the person lending money is more important than everyone else. If you are not going to incentivize lending money for college debt and instead going to add risks (of not getting paid back because discharging loans is now easy), then you will have less loans in the first place.
- dragonwriter 8y ago
  > But when a student needs a loan to pay for their education When a student needs money to pay for their education, why are we extending loans rather than need-based grants?

jpambrun 8y ago

This the the parent comment argument. No unlimited credit, no unbounded high prices. Alternatively cap un-bankruptable dept to a reasonable amount, say 15k/yr or something. It's pretty much how it works here in Quebec Canada and very few students end up with more than 40k CAN in un-bankruptable dept.

ble 8y ago

The federal government of the United States of America. I feel like your question is supposed to be making a rhetorical point but it has an extremely literal answer as of a few years ago.

VLM 8y ago

The HN reality distortion field is all kids will use their Stanford CS degree to work in tech for huge salaries. The reality is at least half of kids don't use their degree anyway. My waitress at the local restaurant isn't any better at waitressing because she has small mortgage sized student debt; in a hypothetical world where she couldn't get that education degree paid for, she'd merely be a happier less stressed waitress, which probably would result in better life for everyone. The concept of everyone should go to college is extremely Boomer; they're dying off and their beliefs are dying off with them. Likewise just wait until "Real estate only goes up!" dies out. Or watching TV pro sports being taken seriously as a hobby. Then you factor in demographic replacement; if most young kids are not native, they will not have legacy native beliefs. It doesn't matter what white hippies held dear in 1970, if a significant fraction of the kids are not legacy demographic. Demographic elimination means cultural elimination and nothing says "white boomer" quite like "Everybody gotta go to college"

uncleamerica 8y ago
Nothing says "black boomer" quite like "more black women graduate with degrees than any other group".
ryandrake 8y ago
A high school diploma used to be a signal that you were a reasonably educated person who could read and add things and manage to get by in most low or medium skill jobs. Today it doesn’t even signal that you are a barely functional adult. That’s sadly what college has become: the semi reliable signal that a person has even a remote chance of contributing to society. I wish there were signals that didn’t cost thousands of dollars but I don’t see any.

isk517 8y ago

Ideally any company or organization that requires educated employees.

dragonwriter 8y ago

> Who is going to lend tens of thousands of dollars to an 18 year old with no income, no assets, and no credit? Since the elimination of the Federal Family Education Loan program in 2010, there has been only one legally-possible lender for Federally-guaranteed student loans. And they aren't a for-profit corporation, or an entity that evidences much concern for babalncing spending and revenue.