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The interest rate would be very very high, as it should be. You can’t on the one hand encourage people to loan money to those who aren’t credit worthy and on th

The interest rate would be very very high, as it should be. You can’t on the one hand encourage people to loan money to those who aren’t credit worthy and on the other hand bemoan the fact that people end up with loans they can’t pay back. The former policy is guaranteed to produce the latter outcome. It also artificially inflates the price colleges can (and will) charge. Allowing people to discharge education debts in bankruptcy is one part of making college cheaper.

slg 6y ago
Reducing the supply for colleges isn't going to make overall college education cheaper while maintaining the same quality of education. There is certainly some waste in college budgets, but it will mostly force colleges to cut the least profitable programs. Education is a social good. We should invest in it like we do with other public services. It shouldn't need to be profited minded.
- dabbledash 6y ago
  I think we should invest in public colleges (increasing supply) and stop subsidizing loans with special bankruptcy protections and federal money (reducing demand at higher price points).
  - slg 6y ago
    Sorry, I phrased that last comment incredibly poorly. I was referring to the supply of financing which in turn impacts demand. When the demand curve shifts, they supply being provided by colleges decreases. The overall amount and quality of education is not something we want to be decreasing.
- jimbokun 6y ago
  > We should invest in it like we do with other public services. Yes. We should invest in public universities to have very low cost or free tuition, and stop pouring public money into private education institutions.
- JamesBarney 6y ago
  >Reducing the supply for colleges isn't going to make overall college education cheaper while maintaining the same quality of education. There is certainly some waste in college budgets, but it will mostly force colleges to cut the least profitable programs. Education is a social good. We should invest in it like we do with other public services. It shouldn't need to be profited minded. We subsidize the shit out of education, and yet it still manages to be such an awful investment people can't pay it off over 30 years with very low interest rates.
  - slg 6y ago
    A person's ability to pay off a loan is not the true value of the investment. There are positive externalities to getting an education that boost society as a whole. Real wage stagnation, rising income inequality, and compound interest on loans would all serve to make this investment less rewarding for individuals while not decreasing the overall societal value of education.
    - JamesBarney 6y ago
      There definitely are positive externalities to education. But I doubt they are even within an order of magnitude of the benefits of training and signalling which accrue to the individual.
labcomputer 6y ago
> The interest rate would be very very high, as it should be. The offered loan amount would be much lower, too. There would be nothing to distinguish a student loan from any other unsecured personal loan (like a credit card), so the credit line would be similar. For an 18 year-old, that means the total amount over 4 years would certainly be less than $10k at an APR in the 20's to 30's.
- CamperBob2 6y ago
  The offered loan amount would be much lower, too. Which is fine, because tuition, textbooks, and housing would be, too. This is a crystal-clear example of what happens when government subsidies distort a market.

slg 6y ago

Reducing the supply for colleges isn't going to make overall college education cheaper while maintaining the same quality of education. There is certainly some waste in college budgets, but it will mostly force colleges to cut the least profitable programs. Education is a social good. We should invest in it like we do with other public services. It shouldn't need to be profited minded.

dabbledash 6y ago
I think we should invest in public colleges (increasing supply) and stop subsidizing loans with special bankruptcy protections and federal money (reducing demand at higher price points).
- slg 6y ago
  Sorry, I phrased that last comment incredibly poorly. I was referring to the supply of financing which in turn impacts demand. When the demand curve shifts, they supply being provided by colleges decreases. The overall amount and quality of education is not something we want to be decreasing.
jimbokun 6y ago
> We should invest in it like we do with other public services. Yes. We should invest in public universities to have very low cost or free tuition, and stop pouring public money into private education institutions.
JamesBarney 6y ago
>Reducing the supply for colleges isn't going to make overall college education cheaper while maintaining the same quality of education. There is certainly some waste in college budgets, but it will mostly force colleges to cut the least profitable programs. Education is a social good. We should invest in it like we do with other public services. It shouldn't need to be profited minded. We subsidize the shit out of education, and yet it still manages to be such an awful investment people can't pay it off over 30 years with very low interest rates.
- slg 6y ago
  A person's ability to pay off a loan is not the true value of the investment. There are positive externalities to getting an education that boost society as a whole. Real wage stagnation, rising income inequality, and compound interest on loans would all serve to make this investment less rewarding for individuals while not decreasing the overall societal value of education.
  - JamesBarney 6y ago
    There definitely are positive externalities to education. But I doubt they are even within an order of magnitude of the benefits of training and signalling which accrue to the individual.

labcomputer 6y ago

> The interest rate would be very very high, as it should be. The offered loan amount would be much lower, too. There would be nothing to distinguish a student loan from any other unsecured personal loan (like a credit card), so the credit line would be similar. For an 18 year-old, that means the total amount over 4 years would certainly be less than $10k at an APR in the 20's to 30's.

CamperBob2 6y ago
The offered loan amount would be much lower, too. Which is fine, because tuition, textbooks, and housing would be, too. This is a crystal-clear example of what happens when government subsidies distort a market.