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> But if I lend you $250,000 for an arts degree, the power of the state will force you to pay me. Why would the state not use the power of the state to make su

> But if I lend you $250,000 for an arts degree, the power of the state will force you to pay me. Why would the state not use the power of the state to make sure you pay back money it lent you?

breck 7y ago
Because it's a dumb predatory loan that should never have been made in the first place. There is a type of business for making dumb loans and using force to ensure they are paid back: the mafia. The mafias of old are nothing in size when compared to the student loan industry.
- vonmoltke 7y ago
  So you are calling the Department of Education a mafia? The Department of Education is the "student loan industry".
  - breck 7y ago
    I think mafia is a poor word choice. At least the mafioso didn't pretend to be saints.
- bumby 7y ago
  Discharging loans and the predatory nature of them are two different arguments. If they loans are predatory, make the loans harder to qualify for. It won't fix the predatory nature if they are easy to get rid of; if anything it will make them more predatory by likely increasing the interest rate to compensate for the increased risk to the lender.
  - breck 7y ago
    This is completely wrong. The answer is simplicity, not more complexity that would come from "make the loans harder to qualify for". > It won't fix the predatory nature if they are easy to get rid of Yes, it will. People will stop hunting for more students to go to their schools with expensive landscaping if there were no government guarantees to ensure they get paid. This is a very simple issue. Any attempts to complexify the issue I suspect are merely attempts to divert attention from the question of human rights and equality. I paid all my student loans and personally have only to lose if they change the laws, but it's the right thing to do.
    - bumby 7y ago
      HL Mencken has a famous quote: "For every complex problem, there is an answer that is clear, simple, and wrong." You undermine your own point with your assertion that that government guarantees are the issue, not the inability to discharge debt that provide the abundance of students. Allowing the discharge of debt will not impact schools if the government still guarantees loans. If anything, it will exacerbate the problem by incentivizing more debt by reducing the risk to the borrower. It seems like you are conflating multiple issues in a complex problem in an effort to provide a simple solution.
    - breck 7y ago
      > You undermine your own point with your assertion that that government guarantees are the issue, not the inability to discharge debt that provide the abundance of students. I'm failing to see the difference. The government should not guarantee the debt and people should be allowed to discharge the debt in bankruptcy. The responsibility should shift to the lenders, not the government. The price of colleges should tumble. Some should have to close their doors. There should be a great reshuffling in the education space. > "For every complex problem, there is an answer that is clear, simple, and wrong." This is a great quote, thanks for sharing. I would say a more accurate quote would be: For every complex problem, there are infinite answers that are clear, simple, and wrong, but also a few that are right.
      - bumby 7y ago
        The difference is that one presupposes the other. In other words, there fact that the government started guaranteeing and subsidizing loans created conditions that led to excess debt, which set the table for a need to remove the ability to discharge that debt in order to make the risk of lending acceptable. I believe much of this can be traced back to The Great Society program. I don't think you're wrong, I think you're just focusing on the wrong aspect. Its the supply of easily incurred debt that is incentivizing high tuition. The laws regarding discharging of that debt are predictable blowback. It sounds like what you're advocating is a return to the way higher education was treated prior to the 1980s, a time when many less people had degrees. The problem is that return is no longer a simple solution, especially when we live in a society that now requires 4 year and even graduate degrees to be competitive, regardless of whether the position necessitates it
  - imtringued 7y ago
    Generally higher interest rates result in smaller loans because people can only afford a fixed monthly payment. A smaller loan generally outweighs the downsides of higher interest rates compared to a huge loan with almost zero interest because that huge loan will be used to bid up prices higher and higher far beyond the original value of whatever you are buying.

> But if I lend you $250,000 for an arts degree, the power of the state will force you to pay me. Why would the state not use the power of the state to make sure you pay back money it lent you?

breck 7y ago

Because it's a dumb predatory loan that should never have been made in the first place. There is a type of business for making dumb loans and using force to ensure they are paid back: the mafia. The mafias of old are nothing in size when compared to the student loan industry.

vonmoltke 7y ago
So you are calling the Department of Education a mafia? The Department of Education is the "student loan industry".
- breck 7y ago
  I think mafia is a poor word choice. At least the mafioso didn't pretend to be saints.
bumby 7y ago
Discharging loans and the predatory nature of them are two different arguments. If they loans are predatory, make the loans harder to qualify for. It won't fix the predatory nature if they are easy to get rid of; if anything it will make them more predatory by likely increasing the interest rate to compensate for the increased risk to the lender.
- breck 7y ago
  This is completely wrong. The answer is simplicity, not more complexity that would come from "make the loans harder to qualify for". > It won't fix the predatory nature if they are easy to get rid of Yes, it will. People will stop hunting for more students to go to their schools with expensive landscaping if there were no government guarantees to ensure they get paid. This is a very simple issue. Any attempts to complexify the issue I suspect are merely attempts to divert attention from the question of human rights and equality. I paid all my student loans and personally have only to lose if they change the laws, but it's the right thing to do.
  - bumby 7y ago
    HL Mencken has a famous quote: "For every complex problem, there is an answer that is clear, simple, and wrong." You undermine your own point with your assertion that that government guarantees are the issue, not the inability to discharge debt that provide the abundance of students. Allowing the discharge of debt will not impact schools if the government still guarantees loans. If anything, it will exacerbate the problem by incentivizing more debt by reducing the risk to the borrower. It seems like you are conflating multiple issues in a complex problem in an effort to provide a simple solution.
  - breck 7y ago
    > You undermine your own point with your assertion that that government guarantees are the issue, not the inability to discharge debt that provide the abundance of students. I'm failing to see the difference. The government should not guarantee the debt and people should be allowed to discharge the debt in bankruptcy. The responsibility should shift to the lenders, not the government. The price of colleges should tumble. Some should have to close their doors. There should be a great reshuffling in the education space. > "For every complex problem, there is an answer that is clear, simple, and wrong." This is a great quote, thanks for sharing. I would say a more accurate quote would be: For every complex problem, there are infinite answers that are clear, simple, and wrong, but also a few that are right.
    - bumby 7y ago
      The difference is that one presupposes the other. In other words, there fact that the government started guaranteeing and subsidizing loans created conditions that led to excess debt, which set the table for a need to remove the ability to discharge that debt in order to make the risk of lending acceptable. I believe much of this can be traced back to The Great Society program. I don't think you're wrong, I think you're just focusing on the wrong aspect. Its the supply of easily incurred debt that is incentivizing high tuition. The laws regarding discharging of that debt are predictable blowback. It sounds like what you're advocating is a return to the way higher education was treated prior to the 1980s, a time when many less people had degrees. The problem is that return is no longer a simple solution, especially when we live in a society that now requires 4 year and even graduate degrees to be competitive, regardless of whether the position necessitates it
- imtringued 7y ago
  Generally higher interest rates result in smaller loans because people can only afford a fixed monthly payment. A smaller loan generally outweighs the downsides of higher interest rates compared to a huge loan with almost zero interest because that huge loan will be used to bid up prices higher and higher far beyond the original value of whatever you are buying.