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This is essentially how it works here in Canada. In Canada, the vast majority of student loans are taken out directly from the government. You can't declare ba

by Sanzig 7y ago

This is essentially how it works here in Canada. In Canada, the vast majority of student loans are taken out directly from the government. You can't declare bankruptcy on a government-issued student loan until seven years after the last day you were a full-time student. After the seven year timer runs out, it's treated the same as any other unsecured debt and you can include it in a bankruptcy (equivalent to a Chapter 7 in the US) or a consumer proposal (equivalent to a Chapter 13 in the US). Private student loans also exist, but unlike government loans they have no special protection - you can go bankrupt on them just like any other type of unsecured debt at any time. For this reason, private lenders almost always require a cosigner for these types of loans.

guelo 7y ago
A big part of the problem is the US's annoying penchant for privatization which then means you need a profit motive. There's a revoltion against any kind of program purely for the public good.
- jlawson 7y ago
  No, there's an understanding that nobody works 'purely for the public good' because we have no selfless angels that we can assign to run the government. Since we only have selfish humans, they'll always work for their own good - whether it's profit motive in an open market, or political power and attached financial benefits. Jeez, imagine how easy society would be if we could actually create government programs 'purely for the public good'. I'd love to live in a world where everything didn't become as corrupt as it structurally can.
  - nl 7y ago
    Jeez, imagine how easy society would be if we could actually create government programs 'purely for the public good'. I'd love to live in a world where everything didn't become as corrupt as it structurally can. It's ironic that in much of the world this is the case. Specifically, in this thread the Canadian system was mentioned and the Australian system is similar.
- WillPostForFood 7y ago
  Come on, the student loan program has been almost entirely taken over by the government. It is an example of the literal opposite of privatization. Citing a progressive source here: ... federal student loans, which are the largest single source of college debt, representing more than 92 percent of outstanding student loan balances. https://www.americanprogress.org/issues/education-postsecondary/reports/2019/06/12/470893/addressing-1-5-trillion-federal-student-loan-debt/ https://www.americanprogress.org/issues/education-postsecond...
  - wayoutthere 7y ago
    The federal student loan programs are actually awful value-wise. If you're in a degree program that typically pays well upon graduation, private student loans usually offer much lower interest rates -- lower than even the subsidized federal loans. I got my loans from SoFi at 4.5%; federal rate was around 7.5%. The way federal student loans work right now (auto-approved at high interest rates with no cap or restrictions on degree program) basically ensured a generation of Americans were bound to wage-slavery.
    - bsanr2 7y ago
      Much like subprime loans, they're often the only ones available to the ones most in need of them. The idea of "risk" based on things like one's race or or location of residence or income actually INCREASING the price of these loans is cynical and deplorable.
      - toasterlovin 7y ago
        Do you have evidence that race is used? I’m almost certain that would be illegal.
        bsanr2 7y ago
        It's illegal, and it's totally been used. https://www.pbs.org/wnet/need-to-know/opinion/wells-fargo-settlement-an-important-victory-for-minority-homeowners-communities/14150/ https://www.pbs.org/wnet/need-to-know/opinion/wells-fargo-se... That was the instance they were caught for mortgages, but it's happened infamously and recently in auto loans, farm loans, and business loans also. It's unlikely that covert discrimination wouldn't then extend to student loans. While that likely phenomenon is hidden, what does happen out in the open is that interest rates are higher for people who live in majority-black neighborhoods, which also correlates to a higher default rate. That means one of two things. The intent could be to discriminate against black people by suffusing the loan terms with America's general distrust of black people (and considering the history of racism in lending across all loan types, I don't doubt that this is the case). Alternatively, non-black people in majority-black neighborhoods might be subject to the same high rates; in that case, direct discrimination isn't taking place, but it shows that the banks are setting rates knowing that they'll result in higher interest payments and defaults. Unfortunately, there's no way to know because the banks refuse to reveal their formulas or allow matched pair testing.

by Sanzig 7y ago

guelo 7y ago

A big part of the problem is the US's annoying penchant for privatization which then means you need a profit motive. There's a revoltion against any kind of program purely for the public good.

jlawson 7y ago
No, there's an understanding that nobody works 'purely for the public good' because we have no selfless angels that we can assign to run the government. Since we only have selfish humans, they'll always work for their own good - whether it's profit motive in an open market, or political power and attached financial benefits. Jeez, imagine how easy society would be if we could actually create government programs 'purely for the public good'. I'd love to live in a world where everything didn't become as corrupt as it structurally can.
- nl 7y ago
  Jeez, imagine how easy society would be if we could actually create government programs 'purely for the public good'. I'd love to live in a world where everything didn't become as corrupt as it structurally can. It's ironic that in much of the world this is the case. Specifically, in this thread the Canadian system was mentioned and the Australian system is similar.
WillPostForFood 7y ago
Come on, the student loan program has been almost entirely taken over by the government. It is an example of the literal opposite of privatization. Citing a progressive source here: ... federal student loans, which are the largest single source of college debt, representing more than 92 percent of outstanding student loan balances. https://www.americanprogress.org/issues/education-postsecondary/reports/2019/06/12/470893/addressing-1-5-trillion-federal-student-loan-debt/ https://www.americanprogress.org/issues/education-postsecond...
- wayoutthere 7y ago
  The federal student loan programs are actually awful value-wise. If you're in a degree program that typically pays well upon graduation, private student loans usually offer much lower interest rates -- lower than even the subsidized federal loans. I got my loans from SoFi at 4.5%; federal rate was around 7.5%. The way federal student loans work right now (auto-approved at high interest rates with no cap or restrictions on degree program) basically ensured a generation of Americans were bound to wage-slavery.
  - bsanr2 7y ago
    Much like subprime loans, they're often the only ones available to the ones most in need of them. The idea of "risk" based on things like one's race or or location of residence or income actually INCREASING the price of these loans is cynical and deplorable.
    - toasterlovin 7y ago
      Do you have evidence that race is used? I’m almost certain that would be illegal.
      - bsanr2 7y ago
        It's illegal, and it's totally been used. https://www.pbs.org/wnet/need-to-know/opinion/wells-fargo-settlement-an-important-victory-for-minority-homeowners-communities/14150/ https://www.pbs.org/wnet/need-to-know/opinion/wells-fargo-se... That was the instance they were caught for mortgages, but it's happened infamously and recently in auto loans, farm loans, and business loans also. It's unlikely that covert discrimination wouldn't then extend to student loans. While that likely phenomenon is hidden, what does happen out in the open is that interest rates are higher for people who live in majority-black neighborhoods, which also correlates to a higher default rate. That means one of two things. The intent could be to discriminate against black people by suffusing the loan terms with America's general distrust of black people (and considering the history of racism in lending across all loan types, I don't doubt that this is the case). Alternatively, non-black people in majority-black neighborhoods might be subject to the same high rates; in that case, direct discrimination isn't taking place, but it shows that the banks are setting rates knowing that they'll result in higher interest payments and defaults. Unfortunately, there's no way to know because the banks refuse to reveal their formulas or allow matched pair testing.