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Permitting bankruptcy would instantly add more risk to the lender and thus instantly boost the interest rate on the loan, potentially pricing it out of the rang
by pmarreck 8y ago
Permitting bankruptcy would instantly add more risk to the lender and thus instantly boost the interest rate on the loan, potentially pricing it out of the range of the student.
- wycs 8y agoAnd permiting indenture is better? College is a signalling racket status good. Cut the loans and watch as tuition magically decreases to maintain equilibrium.
- pmarreck 8y agoI actually fully agree. I wasn't arguing my personal point, just stating a fact
- belorn 8y agoIf we accept that the risk of student loan is covered by the state in any rate and not by the bank then we can just cut out the middle man and have the state give out the loan in the first place under what ever condition that satisfy the public who is paying for it. Sweden has that system. Can't say it is that terrible.
- pmarreck 8y agoSounds good!
- pwned1 8y agoPrecisely. Then we'd get true price discovery.
- mmirate 8y agoIf any given thing is "too expensive", then an important fact is being conveyed: that thing takes too many resources to produce, relative to the value it is providing. Trying to hide or subsidize the price only prevents people from acting on that fact. (and thereby acquiring that value in a more efficient manner, etc.)