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> First of all students need a way to declare bankruptcy. While I'm not for or against such a policy, I find it intriguing you think bankruptcy is free market

> First of all students need a way to declare bankruptcy. While I'm not for or against such a policy, I find it intriguing you think bankruptcy is free market ideology adjacent.

imtringued 8y ago
That's basic economics of lending. If X% of people default then you have to increase interest rates to cover the people that default. The increased interest rate will dissuade students from taking on degrees with lesser economic prospects. It's like adding back pressure or load shedding to a distributed system. It is better to drop or delay requests than let the entire system collapse under it's own weight.
- FLUX-YOU 8y ago
  Higher tuition (skyrocketing tuition, actually) should have already done that
  - sethammons 8y ago
    Naw, you just get a bigger loan :)
- jldugger 8y ago
  > If X% of people default then you have to increase interest rates to cover the people that default. Your borrowers can always default, even without bankruptcy protections. It's a good policy, I assume, but I'm not sure it's strictly speaking, part of the free market dogma.
  - akvadrako 8y ago
    They can't default because of government interference. I don't think anyone was talking about protections.
- user5994461 8y ago
  It's the opposite. If people can default, then the bank has to avoid defaulters, staying away from financing expensive studies in dead end careers. Otherwise the bank needs to get more defaulter, because they are more profitable than people who pay back.
  - stephengillie 8y ago
    Imagine a student having to provide grades and a course plan to their bank, and a loan officer has to sign off on this. Not unlike buying a house.
    - user5994461 8y ago
      I can't imagine a student not having to provide his university name and major. Lend 20k per year to study the history of arts, what could go wrong?
severine 8y ago
On The Importance Of Efficient Bankruptcy To A Free Market Economy: https://outline.com/8stGYk https://outline.com/8stGYk (from Forbes no less!)
- paulmd 8y ago
  From someone who blogs on Forbes' platform, you mean.
SerLava 8y ago
Free doesn't mean devoid of law. The law can chain you up, or the East India Company can chain you up, and it doesn't make much of a difference. Free markets are kept free by intelligent and benevolent legal force.

> First of all students need a way to declare bankruptcy. While I'm not for or against such a policy, I find it intriguing you think bankruptcy is free market ideology adjacent.

imtringued 8y ago

That's basic economics of lending. If X% of people default then you have to increase interest rates to cover the people that default. The increased interest rate will dissuade students from taking on degrees with lesser economic prospects. It's like adding back pressure or load shedding to a distributed system. It is better to drop or delay requests than let the entire system collapse under it's own weight.

FLUX-YOU 8y ago
Higher tuition (skyrocketing tuition, actually) should have already done that
- sethammons 8y ago
  Naw, you just get a bigger loan :)
jldugger 8y ago
> If X% of people default then you have to increase interest rates to cover the people that default. Your borrowers can always default, even without bankruptcy protections. It's a good policy, I assume, but I'm not sure it's strictly speaking, part of the free market dogma.
- akvadrako 8y ago
  They can't default because of government interference. I don't think anyone was talking about protections.
user5994461 8y ago
It's the opposite. If people can default, then the bank has to avoid defaulters, staying away from financing expensive studies in dead end careers. Otherwise the bank needs to get more defaulter, because they are more profitable than people who pay back.
- stephengillie 8y ago
  Imagine a student having to provide grades and a course plan to their bank, and a loan officer has to sign off on this. Not unlike buying a house.
  - user5994461 8y ago
    I can't imagine a student not having to provide his university name and major. Lend 20k per year to study the history of arts, what could go wrong?

severine 8y ago

On The Importance Of Efficient Bankruptcy To A Free Market Economy: https://outline.com/8stGYk https://outline.com/8stGYk (from Forbes no less!)

paulmd 8y ago
From someone who blogs on Forbes' platform, you mean.

SerLava 8y ago

Free doesn't mean devoid of law. The law can chain you up, or the East India Company can chain you up, and it doesn't make much of a difference. Free markets are kept free by intelligent and benevolent legal force.