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Students would not qualify for loans if they were not guaranteed by the government. They are young people with little or no income or collateral -- who would be

Students would not qualify for loans if they were not guaranteed by the government. They are young people with little or no income or collateral -- who would be willing to lend them tens of thousands of dollars? If you remove the government backing you might as well just not bother having student loans at all.

scrooched_moose 8y ago
That, plus the fact that it's for an intangible asset that can't be repossessed. If they give an 18 year old $30k for a car purchase they come take the car when you don't pay and get most of their money back. There's no way to seize a diploma to recover their money.
- magduf 8y ago
  You can garnish their wages. Student loans cannot be discharged in a bankruptcy, so students are on the hook for them for life unless the lender writes off the loan.
  - dragonwriter 8y ago
    > Student loans cannot be discharged in a bankruptcy Student loans can be discharged in bankruptcy, but it is harder than other unsecured debt.
    - magduf 8y ago
      You're right, apparently you can file a lawsuit within a bankruptcy proceeding to show that the student loan imposes an unreasonable burden. Not as easy as other debt of course.
lotsofpulp 8y ago
Good, then maybe we wouldn’t have colleges trying to outcompete each other on who can ratchet up the unnecessary expenses of a school.
lugg 8y ago
Who would be willing to lend them thousands of dollars to study a useless degree? Ah, nobody, that's the damn point.
dragonwriter 8y ago
> Students would not qualify for loans if they were not guaranteed by the government Student loans existed before government guarantees, and all non-direct loans issued now lack government guarantees, so the evidence is that this claim is false.
- AimForTheBushes 8y ago
  Just because it used to be that way doesn't mean it would be that way now.
  - dragonwriter 8y ago
    It is that way now, which kind of guarantees that it would be that way now; there are no government guaranteed private loans issued now, they were replaced with direct government loans; the only student loans today are private loans which are not guaranteed by the government and direct loans. And private loans continue to be issued.
    - twblalock 8y ago
      Those private loans are harder to get and come with significantly higher interest rates. If they became the only loans available, vast numbers of students who are already enrolled in college would be forced to drop out.
ams6110 8y ago
There are young people who should not be in college. They either don't have the aptitude, or they weren't serious in high school and aren't prepared. We should not be guaranteeing loans for these kids, nor making them at all in most cases. A young person with no income but good academics and a plan to study something with good employment prospects would still be a good candidate for at least some amount of credit. Another side effect would be that with a drop in people going to college, employers would be forced to drop the "college degree required" from the vast number of jobs that really do not require a college education of any kind.
- twblalock 8y ago
  > A young person with no income but good academics and a plan to study something with good employment prospects would still be a good candidate for at least some amount of credit. That's not what would happen. What would happen is that rich kids would get to go to college no matter how prepared they were or what major they chose, and poor kids who prepared well and chose useful majors would not be able to afford it.
  - ams6110 8y ago
    Poor kids used to be able to work in the summer and maybe part-time during the school year to pay for college, until easy loans inflated the cost so much that became impossible
    - twblalock 8y ago
      Loans did not create the affordability crisis. Decreased government funding for higher education did that. Look at any first-world country that has kept college education affordable and you will see that they are essentially propping it up as a social welfare program, capping tuition, and giving universities tons of money. No country has kept college education affordable through any other method. That's also the way it used to work at state universities in the United States, and that's why kids were able to work summer jobs to cover tuition. If you take away the loans without also significantly increasing funding for higher education, college will not become affordable again.
elliekelly 8y ago
Wells Fargo gave me a $10,000 student loan in 2007 with no consigner. According to my social security statement my lifetime earnings when I applied for the loan at 19 was $6,616 from my weekend job at the local toy store. The interest rate? 12.79%

scrooched_moose 8y ago

That, plus the fact that it's for an intangible asset that can't be repossessed. If they give an 18 year old $30k for a car purchase they come take the car when you don't pay and get most of their money back. There's no way to seize a diploma to recover their money.

magduf 8y ago
You can garnish their wages. Student loans cannot be discharged in a bankruptcy, so students are on the hook for them for life unless the lender writes off the loan.
- dragonwriter 8y ago
  > Student loans cannot be discharged in a bankruptcy Student loans can be discharged in bankruptcy, but it is harder than other unsecured debt.
  - magduf 8y ago
    You're right, apparently you can file a lawsuit within a bankruptcy proceeding to show that the student loan imposes an unreasonable burden. Not as easy as other debt of course.

lotsofpulp 8y ago

Good, then maybe we wouldn’t have colleges trying to outcompete each other on who can ratchet up the unnecessary expenses of a school.

lugg 8y ago

Who would be willing to lend them thousands of dollars to study a useless degree? Ah, nobody, that's the damn point.

dragonwriter 8y ago

> Students would not qualify for loans if they were not guaranteed by the government Student loans existed before government guarantees, and all non-direct loans issued now lack government guarantees, so the evidence is that this claim is false.

AimForTheBushes 8y ago
Just because it used to be that way doesn't mean it would be that way now.
- dragonwriter 8y ago
  It is that way now, which kind of guarantees that it would be that way now; there are no government guaranteed private loans issued now, they were replaced with direct government loans; the only student loans today are private loans which are not guaranteed by the government and direct loans. And private loans continue to be issued.
  - twblalock 8y ago
    Those private loans are harder to get and come with significantly higher interest rates. If they became the only loans available, vast numbers of students who are already enrolled in college would be forced to drop out.

ams6110 8y ago

There are young people who should not be in college. They either don't have the aptitude, or they weren't serious in high school and aren't prepared. We should not be guaranteeing loans for these kids, nor making them at all in most cases. A young person with no income but good academics and a plan to study something with good employment prospects would still be a good candidate for at least some amount of credit. Another side effect would be that with a drop in people going to college, employers would be forced to drop the "college degree required" from the vast number of jobs that really do not require a college education of any kind.

twblalock 8y ago
> A young person with no income but good academics and a plan to study something with good employment prospects would still be a good candidate for at least some amount of credit. That's not what would happen. What would happen is that rich kids would get to go to college no matter how prepared they were or what major they chose, and poor kids who prepared well and chose useful majors would not be able to afford it.
- ams6110 8y ago
  Poor kids used to be able to work in the summer and maybe part-time during the school year to pay for college, until easy loans inflated the cost so much that became impossible
  - twblalock 8y ago
    Loans did not create the affordability crisis. Decreased government funding for higher education did that. Look at any first-world country that has kept college education affordable and you will see that they are essentially propping it up as a social welfare program, capping tuition, and giving universities tons of money. No country has kept college education affordable through any other method. That's also the way it used to work at state universities in the United States, and that's why kids were able to work summer jobs to cover tuition. If you take away the loans without also significantly increasing funding for higher education, college will not become affordable again.

elliekelly 8y ago

Wells Fargo gave me a $10,000 student loan in 2007 with no consigner. According to my social security statement my lifetime earnings when I applied for the loan at 19 was $6,616 from my weekend job at the local toy store. The interest rate? 12.79%