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If student loan debt was treated like any other debt then few if any students would get loans, unless their parents had assets to put up as collateral. So long

If student loan debt was treated like any other debt then few if any students would get loans, unless their parents had assets to put up as collateral. So long as the financial burden of education falls on the student first then this is unlikely to change. From a financial perspective it’s a terrible product to sell... tons of money to someone with little to no financial assets, iffy prospects of sufficient future income and no underlying assets that the bank can put a lien against in case of default. The problem is not the loans, it’s the whole higher education system that needs a total overhaul including the utility and price of higher education. The current system is based on the idea that many people’s parents encountered where a good summer job and maybe a bit of savings was more than enough to pay for a decent college degree!

disgruntledphd2 6y ago
Student loan treatment only changed in the mid-noughties (under GW Bush), how do you account for the existence of student loans before that?
- pnutjam 6y ago
  exactly, he's assuming everyone will declare bankruptcy if they can, which is untrue. Most people declare bankruptcy way later then they should have and suffer accordingly. People don't want to walk away from debt, they just don't have the money. Student loans are stupid anyway. Why build this system that is basically a shadow tax. We should be able to figure out a way to pay for this and collect the funds with regular taxes.
- abakker 6y ago
  There were fewer loans, by $ amount - https://research.collegeboard.org/trends/student-aid/figures-tables/total-federal-and-nonfederal-loans-type-over-time https://research.collegeboard.org/trends/student-aid/figures...
- sethammons 6y ago
  Exactly. I started college in 2001 and while more pricey than it had been, I was able to secure loans at like 0% during school and then like 4% after. I’m not aware of the numbers for other years, but this seemed fair. Then the loans were sold and came out at like 16%. This was painful. Not sure how that happened.
hardwaresofton 6y ago
> If student loan debt was treated like any other debt then few if any students would get loans, unless their parents had assets to put up as collateral. So long as the financial burden of education falls on the student first then this is unlikely to change. Right, and an investment in the public school systems and community colleges would make them more affordable. If what the government wants is more lower income families in higher education there are many ways to achieve it. The current system encourages the astronomical increase in inflation adjusted cost of education. > From a financial perspective it’s a terrible product to sell... tons of money to someone with little to no financial assets, iffy prospects of sufficient future income and no underlying assets that the bank can put a lien against in case of default. The problem is not the loans, it’s the whole higher education system that needs a total overhaul including the utility and price of higher education. The current system is based on the idea that many people’s parents encountered where a good summer job and maybe a bit of savings was more than enough to pay for a decent college degree! This is literally what governments and regulation are for -- do things that are not profitable in the short term (ex. inventing GPS, the internet, etc) for strategic advantage. In 10/20/30 years, the countries that do the best will be the ones with more intelligent/flexible lower and middle classes -- we can already see rapid cannibalization of industries happening on a large scale.

disgruntledphd2 6y ago

Student loan treatment only changed in the mid-noughties (under GW Bush), how do you account for the existence of student loans before that?

pnutjam 6y ago
exactly, he's assuming everyone will declare bankruptcy if they can, which is untrue. Most people declare bankruptcy way later then they should have and suffer accordingly. People don't want to walk away from debt, they just don't have the money. Student loans are stupid anyway. Why build this system that is basically a shadow tax. We should be able to figure out a way to pay for this and collect the funds with regular taxes.
abakker 6y ago
There were fewer loans, by $ amount - https://research.collegeboard.org/trends/student-aid/figures-tables/total-federal-and-nonfederal-loans-type-over-time https://research.collegeboard.org/trends/student-aid/figures...
sethammons 6y ago
Exactly. I started college in 2001 and while more pricey than it had been, I was able to secure loans at like 0% during school and then like 4% after. I’m not aware of the numbers for other years, but this seemed fair. Then the loans were sold and came out at like 16%. This was painful. Not sure how that happened.

hardwaresofton 6y ago

> If student loan debt was treated like any other debt then few if any students would get loans, unless their parents had assets to put up as collateral. So long as the financial burden of education falls on the student first then this is unlikely to change. Right, and an investment in the public school systems and community colleges would make them more affordable. If what the government wants is more lower income families in higher education there are many ways to achieve it. The current system encourages the astronomical increase in inflation adjusted cost of education. > From a financial perspective it’s a terrible product to sell... tons of money to someone with little to no financial assets, iffy prospects of sufficient future income and no underlying assets that the bank can put a lien against in case of default. The problem is not the loans, it’s the whole higher education system that needs a total overhaul including the utility and price of higher education. The current system is based on the idea that many people’s parents encountered where a good summer job and maybe a bit of savings was more than enough to pay for a decent college degree! This is literally what governments and regulation are for -- do things that are not profitable in the short term (ex. inventing GPS, the internet, etc) for strategic advantage. In 10/20/30 years, the countries that do the best will be the ones with more intelligent/flexible lower and middle classes -- we can already see rapid cannibalization of industries happening on a large scale.