5 ms·

Or they could just become more selective and only loan to people with good prospects of repaying. Maybe they’ll look at your major, maybe discourage private uni

Or they could just become more selective and only loan to people with good prospects of repaying. Maybe they’ll look at your major, maybe discourage private universities.

wgerard 7y ago
> Maybe they’ll look at your major That wouldn't make much sense, many students aren't accepted into a major until a year or two into their education. "Intended major" would also be a poor choice, as I think we all know many people who intended to go into one field and ended up in a completely different one.
- mrfusion 7y ago
  Well you won’t switch your major if your loan depends on it. Someone else is lending you the money, they can add any strings they want. Banks deny mortgages for problems with homes all the time. You aren’t able to swap in a different house after the bank approves it.
  - wgerard 7y ago
    > Well you won’t switch your major if your loan depends on it. I'm not sure what this has to do with anything I said. If you're referring to my second statement, I met many people in school who intended to go into engineering or computer science or medicine and had to change their career path once it was clear they weren't going to make it through the first year of introductory classes. I doubt I was alone in seeing that happen.
    - MiroF 7y ago
      and some people need to get above a certain GPA to hold on to their merit scholarship
  - ethbro 7y ago
    I did know a guy who was on a neighboring-state subsidized grant for a nuclear engineering major... and only taking classes in humanities while summering abroad in France. Not sure how that ended for him, but hopefully poorly? (The program was originated as that state didn't have a NucE program, so found it cheaper to pay them to go somewhere else than run its own)
    - MiroF 7y ago
      Unsure why you would hope something ended poorly for someone else.
      - ethbro 7y ago
        Because he faffed around France for multiple years while choosing not to pursue the major expected by the program that helped fund his attendence in the first place? I've got no sympathy for someone who deliberately makes unethical choices.
        wang_li 7y ago
        Surveys have revealed that 30% of student loan borrowers use some portion of their loans to travel for spring break partying.
        deleted 7y ago
        [deleted]
    - beerandt 7y ago
      It's called Academic Common Market, and it only offers in-state rates to out of state students. (There's no direct scholarship or money, although sometimes unrelated scholarships are also awarded.) It's not really subsidized any more than regular in-state tuition, since it's a reciprocal program between states.
ethbro 7y ago
The problem with "good prospects of replaying" / full-knowledge lending (and what the system was originally intended to prevent) is that the best lendees are wealthy students from socioeconomic groups with good employment prospects. I'm not one to toot on the SJW train, but it's likely inefficient (and certainly unjust) if we encode existing economic biases into our primary method of access to educational capital.
- yzmtf2008 7y ago
  I agree with everything you said, but doesn't lending money to the group of people that are less likely to make repayment puts them in a worse place? Instead of being in a socioeconomic disadvantage, they now also have a loan that they can never payback. It honestly feels predatory and sounds like payday lending or one of those "more credit = more cash in your wallet" ads. I'm really sad that in this view, access to credit is equated to access to education. Sure, in a first degree thinking the goal is achieved, but at the end of the day education is a means to an end rather than an end in itself. Lending people money to attend unaffordable institutions can't be the best way to fix the problem.
  - bsanr2 7y ago
    >I agree with everything you said, but doesn't lending money to the group of people that are less likely to make repayment puts them in a worse place? Not if loan terms aren't designed to court default, which they often seem to be. Doesn't it seem backwards to require that the people least likely to be able to pay, pay higher interest rates?
    - yzmtf2008 7y ago
      > Doesn't it seem backwards to require that the people least likely to be able to pay, pay higher interest rates? I mean, yes. But on the other hand if the ability to payback the loan (risk of default) isn't taken into account these loans might not exist at all (not necessarily a bad thing). Eventually the risk-adjusted rate hits usury limits and loans start disappearing. (Of course we still get things like payday loans, credit cards, student loans, etc., but these are legal loopholes that should be closed.)

Or they could just become more selective and only loan to people with good prospects of repaying. Maybe they’ll look at your major, maybe discourage private universities.

wgerard 7y ago

> Maybe they’ll look at your major That wouldn't make much sense, many students aren't accepted into a major until a year or two into their education. "Intended major" would also be a poor choice, as I think we all know many people who intended to go into one field and ended up in a completely different one.

mrfusion 7y ago
Well you won’t switch your major if your loan depends on it. Someone else is lending you the money, they can add any strings they want. Banks deny mortgages for problems with homes all the time. You aren’t able to swap in a different house after the bank approves it.
- wgerard 7y ago
  > Well you won’t switch your major if your loan depends on it. I'm not sure what this has to do with anything I said. If you're referring to my second statement, I met many people in school who intended to go into engineering or computer science or medicine and had to change their career path once it was clear they weren't going to make it through the first year of introductory classes. I doubt I was alone in seeing that happen.
  - MiroF 7y ago
    and some people need to get above a certain GPA to hold on to their merit scholarship
- ethbro 7y ago
  I did know a guy who was on a neighboring-state subsidized grant for a nuclear engineering major... and only taking classes in humanities while summering abroad in France. Not sure how that ended for him, but hopefully poorly? (The program was originated as that state didn't have a NucE program, so found it cheaper to pay them to go somewhere else than run its own)
  - MiroF 7y ago
    Unsure why you would hope something ended poorly for someone else.
    - ethbro 7y ago
      Because he faffed around France for multiple years while choosing not to pursue the major expected by the program that helped fund his attendence in the first place? I've got no sympathy for someone who deliberately makes unethical choices.
      - wang_li 7y ago
        Surveys have revealed that 30% of student loan borrowers use some portion of their loans to travel for spring break partying.
        deleted 7y ago
        [deleted]
  - beerandt 7y ago
    It's called Academic Common Market, and it only offers in-state rates to out of state students. (There's no direct scholarship or money, although sometimes unrelated scholarships are also awarded.) It's not really subsidized any more than regular in-state tuition, since it's a reciprocal program between states.

ethbro 7y ago

The problem with "good prospects of replaying" / full-knowledge lending (and what the system was originally intended to prevent) is that the best lendees are wealthy students from socioeconomic groups with good employment prospects. I'm not one to toot on the SJW train, but it's likely inefficient (and certainly unjust) if we encode existing economic biases into our primary method of access to educational capital.

yzmtf2008 7y ago
I agree with everything you said, but doesn't lending money to the group of people that are less likely to make repayment puts them in a worse place? Instead of being in a socioeconomic disadvantage, they now also have a loan that they can never payback. It honestly feels predatory and sounds like payday lending or one of those "more credit = more cash in your wallet" ads. I'm really sad that in this view, access to credit is equated to access to education. Sure, in a first degree thinking the goal is achieved, but at the end of the day education is a means to an end rather than an end in itself. Lending people money to attend unaffordable institutions can't be the best way to fix the problem.
- bsanr2 7y ago
  >I agree with everything you said, but doesn't lending money to the group of people that are less likely to make repayment puts them in a worse place? Not if loan terms aren't designed to court default, which they often seem to be. Doesn't it seem backwards to require that the people least likely to be able to pay, pay higher interest rates?
  - yzmtf2008 7y ago
    > Doesn't it seem backwards to require that the people least likely to be able to pay, pay higher interest rates? I mean, yes. But on the other hand if the ability to payback the loan (risk of default) isn't taken into account these loans might not exist at all (not necessarily a bad thing). Eventually the risk-adjusted rate hits usury limits and loans start disappearing. (Of course we still get things like payday loans, credit cards, student loans, etc., but these are legal loopholes that should be closed.)