3 ms·

>The private sector will replace them for students who are good bets, probably with income-share agreements or something similar and MUCH less predatory than th

by rconti 6y ago

>The private sector will replace them for students who are good bets, probably with income-share agreements or something similar and MUCH less predatory than the current federal loan programs. [Citation needed] We already know who the "good bets" are. They're the rich kids. And if you think "income sharing" and the private sector will drive rates down from a federally-subsidized ("predatory") rate, well, I don't know what to say. I certainly don't think burying underprivileged students under a mountain of debt at graduation is a good thing. I'd very much like to see costs come way down, and I do agree that doing something about the loan system is a piece of the puzzle. But the reason the underprivileged are taking on this debt is that they're attempting to move up, in a way that avoiding debt by avoiding higher education will never achieve. Unfortunately, higher education has become the only way to hang on to an otherwise-falling standard of living; wage stagnation despite increasing education level.

ishjoh 6y ago
An alternative to the current system which would be very disruptive and allow for a lot of experimentation and alternatives would be to have state level or national level certification exams that would need to be passed to obtain a degree. The exams could then also show percentiles, so even if you were self taught you could be ranked against Ivy League students. Cons to this approach would be the same issues that exist with standardized testing today. Emphasis on only learning to the test, high stress make or break testing (although this already exists with the SATs and other exams). I'm sure there are also a number of other cons.
- deleted 6y ago
  [deleted]
bko 6y ago
> [Citation needed] Pretty much all private student loan borrowers pick off the "good bets". Because the government rate is the floor. This was Sofi business model. I remember looking at their securitizations and most were graduate school loans for top schools( Wharton, Harvard, Columbia, etc). It wouldn't be rare for an entire securitization of thousands of loans to have no loans even 30 days delinquent. And they paid back quickly too. > Investors received a financial return and borrowers received rates lower than the federal government offered. The company sought to minimize defaults by focusing on low-risk students and graduates https://en.wikipedia.org/wiki/SoFi https://en.wikipedia.org/wiki/SoFi
imtringued 6y ago
You can trivially add the inefficiency you so desire by letting the government only cover part of the loan up to a set amount. If the government only guarantees loans up to 30k you can still get an additional 30k loan at your own risk to pay for a 60k degree.

by rconti 6y ago

ishjoh 6y ago

An alternative to the current system which would be very disruptive and allow for a lot of experimentation and alternatives would be to have state level or national level certification exams that would need to be passed to obtain a degree. The exams could then also show percentiles, so even if you were self taught you could be ranked against Ivy League students. Cons to this approach would be the same issues that exist with standardized testing today. Emphasis on only learning to the test, high stress make or break testing (although this already exists with the SATs and other exams). I'm sure there are also a number of other cons.

deleted 6y ago
[deleted]

bko 6y ago

> [Citation needed] Pretty much all private student loan borrowers pick off the "good bets". Because the government rate is the floor. This was Sofi business model. I remember looking at their securitizations and most were graduate school loans for top schools( Wharton, Harvard, Columbia, etc). It wouldn't be rare for an entire securitization of thousands of loans to have no loans even 30 days delinquent. And they paid back quickly too. > Investors received a financial return and borrowers received rates lower than the federal government offered. The company sought to minimize defaults by focusing on low-risk students and graduates https://en.wikipedia.org/wiki/SoFi https://en.wikipedia.org/wiki/SoFi

imtringued 6y ago

You can trivially add the inefficiency you so desire by letting the government only cover part of the loan up to a set amount. If the government only guarantees loans up to 30k you can still get an additional 30k loan at your own risk to pay for a 60k degree.