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Why would you forgive student loans? That way you reward incompetence. Instead, you should give each young person $300k - some would repay their student loans,
by tomp 7y ago
Why would you forgive student loans? That way you reward incompetence. Instead, you should give each young person $300k - some would repay their student loans, others (who were more prudent with their choice of education) would have down-payment for a house or something... Forgiving just the student loans would create massive perverse incentives.
- sg47 7y agoJust like the bank bailout?
- bscphil 7y agoNot taking a stance here either way, but surely it's possible to oppose both the bank bailout and forgiving student loans on the grounds that they both create perverse incentives?
- imtringued 7y agoThe bank bailout was purely about liquidity. Over the long term the banks are going to repay the loans. Student loans are a long term problem. The only way you could fix it is by sending students back to college and force them to get a profitable STEM degree.
- munk-a 7y agoBecause those student loans were made in bad faith to people who were too young to realize how badly they were being exploited and how meaningless their education was - for clarification I've paid off all of mine, and I'm still happy to see zero benefit out of this expenditure because it'll be just and help the economy.
- imtringued 7y agoYou didn't meaningfully address the parent which was talking about rewarding this exploitation. Imagine you are a college and instead of investing into high quality education you try to get as many students to enroll through concessions even if it means that they cannot repay their loans because of bad job prospects. If students know that their loans will be forgiven then they might go for the "expensive vacation" college instead of the "boring nerd" college with those super strict professors.
- spopejoy 7y ago> Why would you forgive student loans? That way you reward incompetence It's the opposite: it's a step toward removing the moral hazard that allowed predatory loans to be offered to students in the first place. The logical end-point is to get back to free or affordable tuition. > Instead, you should give each young person $300k Admirable suggestion, but how does that _not_ create perverse incentives to e.g. blow it all speculating on Hearthstone cards?
- imtringued 7y agoThey could also decide to buy stocks and then the entire idea becomes meaningless.