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I would assume any other kind of loan a 22 year old gets usually has an asset tied to it that can be repossessed. You can't really repossess knowledge

nemothekid 6y ago
The most common type of loan a 22 year old would have is likely a credit card. Credit cards are unsecured loans. It's not unheard of to hear of people with tens of thousands of credit card debt that then go to bankruptcy. Unsecured loans aren't new.
- sokoloff 6y ago
  Are 18 year olds with no income, no assets, and close to no credit history often the ones able to get tens of thousands in credit card limit such that four years later they can default? Maybe asked differently: how much of your personal retirement money would you lend to such an 18 year old for the prospects of a 7% or so yield?
  - nemothekid 6y ago
    I think you are missing my point. I'm sure you could lurk at /r/CreditCards to find young adults getting credit cards with limits of up to $1,500. My point is that you won't find credit card companies willing to loan those same people $50,000 and they shouldn't. The ability for young adults to easily strap on large amount of debt has inflated the price of college. Banks only do it because they are guaranteed to be paid back. If banks were more strict with their loan requirements, they wouldn't give so much money away and, in turn, there would be fewer students out capable of paying high tuition. Colleges would be forced to lower costs, ideally to the days where you could afford to pay tuition by working part time.
    - sokoloff 6y ago
      Harvard, MIT, and Stanford would continue to cost about what they cost now, which would price out a substantial portion of the population if loans were not available. (There are well more than enough people with the means to send their kids there out of pocket.) For me, it would virtually ensure my kids would have their pick of several top or top-middle private colleges paid from 529 accounts and by co-signing or remortgaging our house; nevertheless, I’m still adamantly opposed. I’m not convinced you can live for four years on part-time work alone, let alone buy tuition, lab fees, and books on top of just your housing, food, utilities, and minimal entertainment in many college towns.
      - nemothekid 6y ago
        Harvard, MIT and Stanford are schools with enormous endowments with generous aid packages that are already very inexpensive for students even if your parents make 6 figures. However most students are already priced out of those schools given how competitive they are. The top and even top middle school (probably every school outside HYPS) would either lower in cost or dramatically cut class sizes. There is a small number of students who’s parents can actually afford the 50k sticker price - either prices drop or these colleges end their undergrad programs. These institutions will not cost 50k/semester.
        MisterBastahrd 6y ago
        The idea that parents should be responsible for the education costs of their adult children is an idea that should have died about 20 years ago.
        sokoloff 6y ago
        My parents were both public school teachers (so our family income was definitely not high). The aid MIT offered was in the form of loans.

nemothekid 6y ago

The most common type of loan a 22 year old would have is likely a credit card. Credit cards are unsecured loans. It's not unheard of to hear of people with tens of thousands of credit card debt that then go to bankruptcy. Unsecured loans aren't new.

sokoloff 6y ago
Are 18 year olds with no income, no assets, and close to no credit history often the ones able to get tens of thousands in credit card limit such that four years later they can default? Maybe asked differently: how much of your personal retirement money would you lend to such an 18 year old for the prospects of a 7% or so yield?
- nemothekid 6y ago
  I think you are missing my point. I'm sure you could lurk at /r/CreditCards to find young adults getting credit cards with limits of up to $1,500. My point is that you won't find credit card companies willing to loan those same people $50,000 and they shouldn't. The ability for young adults to easily strap on large amount of debt has inflated the price of college. Banks only do it because they are guaranteed to be paid back. If banks were more strict with their loan requirements, they wouldn't give so much money away and, in turn, there would be fewer students out capable of paying high tuition. Colleges would be forced to lower costs, ideally to the days where you could afford to pay tuition by working part time.
  - sokoloff 6y ago
    Harvard, MIT, and Stanford would continue to cost about what they cost now, which would price out a substantial portion of the population if loans were not available. (There are well more than enough people with the means to send their kids there out of pocket.) For me, it would virtually ensure my kids would have their pick of several top or top-middle private colleges paid from 529 accounts and by co-signing or remortgaging our house; nevertheless, I’m still adamantly opposed. I’m not convinced you can live for four years on part-time work alone, let alone buy tuition, lab fees, and books on top of just your housing, food, utilities, and minimal entertainment in many college towns.
    - nemothekid 6y ago
      Harvard, MIT and Stanford are schools with enormous endowments with generous aid packages that are already very inexpensive for students even if your parents make 6 figures. However most students are already priced out of those schools given how competitive they are. The top and even top middle school (probably every school outside HYPS) would either lower in cost or dramatically cut class sizes. There is a small number of students who’s parents can actually afford the 50k sticker price - either prices drop or these colleges end their undergrad programs. These institutions will not cost 50k/semester.
      - MisterBastahrd 6y ago
        The idea that parents should be responsible for the education costs of their adult children is an idea that should have died about 20 years ago.
      - sokoloff 6y ago
        My parents were both public school teachers (so our family income was definitely not high). The aid MIT offered was in the form of loans.