6 ms·

That would be a good thing, not a bad thing. It would force colleges to conform to the rules of capitalism, making the market for education sane again. Student

That would be a good thing, not a bad thing. It would force colleges to conform to the rules of capitalism, making the market for education sane again. Student loans should not be handed out as easily as they currently are.

mschuster91 7y ago
The problem is that, trades aside, higher education is a must for earning money that one can actually live on. The US needs public funding for universities. It's not impossible - Germany's universities are all free of charge, most even for foreigners.
- toasterlovin 7y ago
  Attending a state university as a resident is actually well within reach for almost everyone. And people who can’t afford it usually qualify for financial aid and grants. The problem is that too many people overspend on higher education. And most people are only able to do this with access to humungous student loans.
- linuxftw 7y ago
  Right, the problem is higher education is required. Reform secondary education so higher education is not required, and only fund public institutions that give people additional skills to help 'live on.' As long as public money is subsidizing 4 years of 'drama camp' or whatever it those kids do, we should be investing in people that want to do actual work for a living.
- rayiner 7y ago
  The U.S. spends basically the same amount of public money on universities as Germany: https://data.oecd.org/eduresource/public-spending-on-education.htm#indicator-chart https://data.oecd.org/eduresource/public-spending-on-educati.... 0.91% of GDP versus 1.0% of GDP. That works out to about $550 per man, woman, and child in the U.S. versus $450 in Germany.
  - pbhjpbhj 7y ago
    How's the spread of spending per student for that money in each country I wonder (across subjects and colleges).
- Mirioron 7y ago
  Free of charge universities usually means stricter limits on access. Only some subset of people will essentially have the opportunity to attend.
  - paul_f 7y ago
    Even with free tuition, you still have to pay for living expenses, which are often much higher than tuition at an in-state school.
    - rayiner 7y ago
      Yes, and this is why Sweden has about the same median student debt as the US ($25,000).
- anoxor 7y ago
  A whole lot of bootcamp coders making a few hundred thousand may disagree with that or people who started profitable businesses without degrees.
ethbro 7y ago
> Student loans should not be handed out as easily as they currently are. I would argue that 'student loans should not be handed out as equally as they currently are' -- in that loan terms are independent of major selection (and career prospects). By all means continue to mandate that loan terms be familial-wealth blind (and institution-blind), but allow lenders to differentiate with rates on the basis of area of degree earned. It's a lagging indicator, but it's insane that we specifically break market signals between the actual job market and the primary methods by which students finance their education. If someone wants to get a degree in medieval plant philosophy, then they can bloody well self-finance that.
- dragonwriter 7y ago
  > By all means continue to mandate that loan terms be familial-wealth blind (and institution-blind), Student loan terms (private and public) are blind to neither of these factors. > but allow lenders to differentiate with rates on the basis of area of degree earned. Lenders outside of the federally guaranteed system are allowed to do this, as well as to consider all of the other factors you suggest loans should “remain” blind to. The only lender inside the federally-guaranteed system is the federal government itself (and it is also not blind to the factors you suggest it should remain blind to, since both are factors already.) Further any argument for major sensitivity is a much stronger argument for much additional weighting by institution, since all the market factors that apply to majors also apply to institutions.
  - ethbro 7y ago
    (Clarification: I'm talking about the US loan program) > Student loan terms (private and public) are blind to neither of these factors. They are negatively blind, in that I cannot charge someone with family wealth in excess of $1M a lower rate than someone with negative family wealth. Correct me if I'm wrong. > Lenders outside of the federally guaranteed system I'm limiting these statements to the federal loan system, because that where a huge chunk of debt is created. > The only lender inside the federally-guaranteed system is the federal government itself Apparently this was changed in 2010? Prior to that, this was absolutely not the case via FFELs [1]. > and it is also not blind to the factors you suggest it should remain blind to, since both are factors already See clarification about positive vs negative blinding. > Further any argument for major sensitivity is a much stronger argument for much additional weighting by institution, since all the market factors that apply to majors also apply to institutions. Not intrinsically. The problem with allowing rate sensitivity is making it outcome-sensitive while avoiding it becoming pre-existing wealth-sensitive. I think everyone would feel it's unfair if Harvard loans charged 2% interest, while Community College loans charged 25%, because the acceptance demographics and underlying default rates supported that difference. [1] https://en.m.wikipedia.org/wiki/Federal_Family_Education_Loan_Program https://en.m.wikipedia.org/wiki/Federal_Family_Education_Loa...

mschuster91 7y ago

The problem is that, trades aside, higher education is a must for earning money that one can actually live on. The US needs public funding for universities. It's not impossible - Germany's universities are all free of charge, most even for foreigners.

toasterlovin 7y ago
Attending a state university as a resident is actually well within reach for almost everyone. And people who can’t afford it usually qualify for financial aid and grants. The problem is that too many people overspend on higher education. And most people are only able to do this with access to humungous student loans.
linuxftw 7y ago
Right, the problem is higher education is required. Reform secondary education so higher education is not required, and only fund public institutions that give people additional skills to help 'live on.' As long as public money is subsidizing 4 years of 'drama camp' or whatever it those kids do, we should be investing in people that want to do actual work for a living.
rayiner 7y ago
The U.S. spends basically the same amount of public money on universities as Germany: https://data.oecd.org/eduresource/public-spending-on-education.htm#indicator-chart https://data.oecd.org/eduresource/public-spending-on-educati.... 0.91% of GDP versus 1.0% of GDP. That works out to about $550 per man, woman, and child in the U.S. versus $450 in Germany.
- pbhjpbhj 7y ago
  How's the spread of spending per student for that money in each country I wonder (across subjects and colleges).
Mirioron 7y ago
Free of charge universities usually means stricter limits on access. Only some subset of people will essentially have the opportunity to attend.
- paul_f 7y ago
  Even with free tuition, you still have to pay for living expenses, which are often much higher than tuition at an in-state school.
  - rayiner 7y ago
    Yes, and this is why Sweden has about the same median student debt as the US ($25,000).
anoxor 7y ago
A whole lot of bootcamp coders making a few hundred thousand may disagree with that or people who started profitable businesses without degrees.

ethbro 7y ago

> Student loans should not be handed out as easily as they currently are. I would argue that 'student loans should not be handed out as equally as they currently are' -- in that loan terms are independent of major selection (and career prospects). By all means continue to mandate that loan terms be familial-wealth blind (and institution-blind), but allow lenders to differentiate with rates on the basis of area of degree earned. It's a lagging indicator, but it's insane that we specifically break market signals between the actual job market and the primary methods by which students finance their education. If someone wants to get a degree in medieval plant philosophy, then they can bloody well self-finance that.

dragonwriter 7y ago
> By all means continue to mandate that loan terms be familial-wealth blind (and institution-blind), Student loan terms (private and public) are blind to neither of these factors. > but allow lenders to differentiate with rates on the basis of area of degree earned. Lenders outside of the federally guaranteed system are allowed to do this, as well as to consider all of the other factors you suggest loans should “remain” blind to. The only lender inside the federally-guaranteed system is the federal government itself (and it is also not blind to the factors you suggest it should remain blind to, since both are factors already.) Further any argument for major sensitivity is a much stronger argument for much additional weighting by institution, since all the market factors that apply to majors also apply to institutions.
- ethbro 7y ago
  (Clarification: I'm talking about the US loan program) > Student loan terms (private and public) are blind to neither of these factors. They are negatively blind, in that I cannot charge someone with family wealth in excess of $1M a lower rate than someone with negative family wealth. Correct me if I'm wrong. > Lenders outside of the federally guaranteed system I'm limiting these statements to the federal loan system, because that where a huge chunk of debt is created. > The only lender inside the federally-guaranteed system is the federal government itself Apparently this was changed in 2010? Prior to that, this was absolutely not the case via FFELs [1]. > and it is also not blind to the factors you suggest it should remain blind to, since both are factors already See clarification about positive vs negative blinding. > Further any argument for major sensitivity is a much stronger argument for much additional weighting by institution, since all the market factors that apply to majors also apply to institutions. Not intrinsically. The problem with allowing rate sensitivity is making it outcome-sensitive while avoiding it becoming pre-existing wealth-sensitive. I think everyone would feel it's unfair if Harvard loans charged 2% interest, while Community College loans charged 25%, because the acceptance demographics and underlying default rates supported that difference. [1] https://en.m.wikipedia.org/wiki/Federal_Family_Education_Loan_Program https://en.m.wikipedia.org/wiki/Federal_Family_Education_Loa...