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College students with no income can't actually get all that much credit for exactly the reason you mention. They can get a little sure, but not nearly as much a

by harryh 8y ago

College students with no income can't actually get all that much credit for exactly the reason you mention. They can get a little sure, but not nearly as much as they can get in student loans. And there isn't zero consequence to defaulting. They'll still take the couple grand you have in your checking account. And having crappy credit is somewhat inconvenient (for the reasons you mention). It's about cost vs reward. If you've only got $5k in credit card debt then the reward isn't worth the cost. But if you've got $100k in student loan debt those costs start to look pretty small.

imgabe 8y ago
Right, banks won't make the loans in the first place. Or they'll make much more conservative loans based on major and potential job prospects. Without an unlimited supply of money, universities will not be able to charge outrageous amounts for tuition and will have to be more in line with what people are actually able to pay. That's better all around. I mean, if any 18 year old could fill out a form and get a government-guaranteed six figure loan to buy a car. A loan that they were prohibited from ever defaulting on...then Toyota Corollas would probably cost $150k too...
- harryh 8y ago
  I'm partially with you because I agree that college in the US is too expensive because the costs are in many ways unrestrained. I think your proposal would lead to more radical change than you think though. We wouldn't end up with "the system we have now but cheaper." You'd have a lot fewer people going to college. And the people missing out would be poorer and browner. Now, maybe that would be OK. But a lot of people wouldn't see it that way.
  - imgabe 8y ago
    I'm not so sure. If you're really poor (or let's be honest, really poor and a minority), there's a ton of need-based aid available in the form of grants and scholarships. If tuition prices drop, those grants could go even further and allow even more really poor people to go to college. The people who lose out the most in our current system seem to be those in the middle - not poor enough to qualify for need-based aid, but not rich enough to be able to afford it. Those are the ones who end up with the loans. If tuition hadn't been significantly outpacing inflation for the last few decades, they and their families would probably be able to swing the bill.

by harryh 8y ago

imgabe 8y ago

Right, banks won't make the loans in the first place. Or they'll make much more conservative loans based on major and potential job prospects. Without an unlimited supply of money, universities will not be able to charge outrageous amounts for tuition and will have to be more in line with what people are actually able to pay. That's better all around. I mean, if any 18 year old could fill out a form and get a government-guaranteed six figure loan to buy a car. A loan that they were prohibited from ever defaulting on...then Toyota Corollas would probably cost $150k too...

harryh 8y ago
I'm partially with you because I agree that college in the US is too expensive because the costs are in many ways unrestrained. I think your proposal would lead to more radical change than you think though. We wouldn't end up with "the system we have now but cheaper." You'd have a lot fewer people going to college. And the people missing out would be poorer and browner. Now, maybe that would be OK. But a lot of people wouldn't see it that way.
- imgabe 8y ago
  I'm not so sure. If you're really poor (or let's be honest, really poor and a minority), there's a ton of need-based aid available in the form of grants and scholarships. If tuition prices drop, those grants could go even further and allow even more really poor people to go to college. The people who lose out the most in our current system seem to be those in the middle - not poor enough to qualify for need-based aid, but not rich enough to be able to afford it. Those are the ones who end up with the loans. If tuition hadn't been significantly outpacing inflation for the last few decades, they and their families would probably be able to swing the bill.