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> while removing market influence on guiding students to choose majors with a return on investment. In theory, non-dischargeability should be _increasing_ pres

> while removing market influence on guiding students to choose majors with a return on investment. In theory, non-dischargeability should be _increasing_ pressure on students to choose majors that are worth the monetary investment, no? I guess perhaps your point is that successful insurance companies would be better positioned to make this assessment, but I'm not sure that's true: a student and his advisors/parents have a lot more relevant information about which major they in particular would be most productive in, along with access to the prior for how productive a given major is on average. Eg, my parents REALLY wanted me to be a doctor, but I knew I'd find medical education intensely boring and unchallenging. Ostensibly, going into medicine may have been more conducive to loan repayment than getting a math degree (and CS, added later), but I had the inside information to know that, if anything, I'd have a tiny (but nonzero) chances of failing to finish a medical education for sheer lack of work ethic. That's the kind of case-by-case information that's not available to insurance companies. If my parents had an incomplete picture of how degree choice played into my loan repayment, an insurance company would be way worse off as compared to our collective decision.

toasterlovin 7y ago
The market influence referred to is lenders being more choosy about how much they lend to whom, specifically because 18 year old don’t make good decisions.
- wutbrodo 7y ago
  Yea, but I don't think it's accurate to describe it as "market influence being removed": the responsibility just shifts from the lender to the borrower (who is better-positioned to make the call, from an informational standpoint). > specifically because 18 year old don’t make good decisions. I'm sympathetic to this argument because there are _some_ 18 year olds making these huge decisions without any reasonable guidance, but for a big chunk of the population, we're talking about 18 y/os + their parents + their college counselors. And I'm also not claiming it's black-and-white: people (even adults) do very stupid things all the time, so it may be rational to have insurance cos bear part of the responsibility for measuring risk of a given student trying for a given degree. But 1) Given the extremely asymmetric information, this is an extremely blunt instrument, which will lead to countless hot takes about seemingly-ludicrous-but-inevitable false positives and negatives where a student is charged an absurd rate for something that makes sense in his case 2) It's simply not accurate to claim, as GP comment did, that the market influence is being removed: it's just being shifted from insurance co to student+advisors (who again, is much more equipped from an informational perspective to make this call)

toasterlovin 7y ago

The market influence referred to is lenders being more choosy about how much they lend to whom, specifically because 18 year old don’t make good decisions.

wutbrodo 7y ago
Yea, but I don't think it's accurate to describe it as "market influence being removed": the responsibility just shifts from the lender to the borrower (who is better-positioned to make the call, from an informational standpoint). > specifically because 18 year old don’t make good decisions. I'm sympathetic to this argument because there are _some_ 18 year olds making these huge decisions without any reasonable guidance, but for a big chunk of the population, we're talking about 18 y/os + their parents + their college counselors. And I'm also not claiming it's black-and-white: people (even adults) do very stupid things all the time, so it may be rational to have insurance cos bear part of the responsibility for measuring risk of a given student trying for a given degree. But 1) Given the extremely asymmetric information, this is an extremely blunt instrument, which will lead to countless hot takes about seemingly-ludicrous-but-inevitable false positives and negatives where a student is charged an absurd rate for something that makes sense in his case 2) It's simply not accurate to claim, as GP comment did, that the market influence is being removed: it's just being shifted from insurance co to student+advisors (who again, is much more equipped from an informational perspective to make this call)