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Poor people who choose degrees with good career prospects will get a loan. Poor people who want a degree with bad career prospects may not have the chance to wa

Poor people who choose degrees with good career prospects will get a loan. Poor people who want a degree with bad career prospects may not have the chance to waste a year or more of their life pursuing one.

LatteLazy 5y ago
Surely no one will get a loan because as soon as you pay your last fee, you can declare bankruptcy? That way you don't have to pay back that money and there is nothing to be repo'd. And if no one pays back loans, lends don't lend. Isn't this the broad logic behind student loans not be dischargable already? I don't think the current US system is correct. But I think there needs to be some balance rather than just never being dischargable. Some of the "equity" based models offered by a few places (where you pay a percentage of income for X years) seem better to me. Or at least suitable in some cases.
- dragonwriter 5y ago
  > Surely no one will get a loan because as soon as you pay your last fee, you can declare bankruptcy? Well, no because there are lots of incentives for the people who could pay to not declare bankruptcy, because bankruptcy has adverse impacts on employability, housing, etc. And with income contingent repayment available on federal loans, pretty much everyone can stay in good standing with them (people don't, but that's mostly servicers trying to get people not to take available income contingent plans.) Also, the main lender is the federal government (since other , who lends because that's what the law says they do. The already narrow space of private student loans might narrow a bit further with easier dischargeability, but that’s about it. > Isn't this the broad logic behind student loans not be dischargable already? IIRC, private, non-federally-guaranteed student lending was trending upward, with no graduate-and-declare-bankruptcy trend when limited dischargeability for such loans was adopted, so, to the extent it was the justification it wasn’t factually justified, just an excuse for a financial services industry subsidy. (IIRC, it was later displaced somewhat by expanded federally-guaranteed lensing then hit a sharp cliff around the 2009 financial crisis.) And for federally-guaranteed loans, private lenders have been excluded for many years, as private federally-guaranteed loans have been replaced with exclusively direct federal loans, and when therr was private lending they had federal guarantees, so encouraging lenders isn't a factor in that space, either. > Some of the "equity" based models offered by a few places (where you pay a percentage of income for X years) seem better to me. Those seem to a strictly-worse variation of the income-based plans already available for federal loans.
8note 5y ago
Waste seems like a strong word. The career isnt the only reason to learn things

LatteLazy 5y ago

Surely no one will get a loan because as soon as you pay your last fee, you can declare bankruptcy? That way you don't have to pay back that money and there is nothing to be repo'd. And if no one pays back loans, lends don't lend. Isn't this the broad logic behind student loans not be dischargable already? I don't think the current US system is correct. But I think there needs to be some balance rather than just never being dischargable. Some of the "equity" based models offered by a few places (where you pay a percentage of income for X years) seem better to me. Or at least suitable in some cases.

dragonwriter 5y ago
> Surely no one will get a loan because as soon as you pay your last fee, you can declare bankruptcy? Well, no because there are lots of incentives for the people who could pay to not declare bankruptcy, because bankruptcy has adverse impacts on employability, housing, etc. And with income contingent repayment available on federal loans, pretty much everyone can stay in good standing with them (people don't, but that's mostly servicers trying to get people not to take available income contingent plans.) Also, the main lender is the federal government (since other , who lends because that's what the law says they do. The already narrow space of private student loans might narrow a bit further with easier dischargeability, but that’s about it. > Isn't this the broad logic behind student loans not be dischargable already? IIRC, private, non-federally-guaranteed student lending was trending upward, with no graduate-and-declare-bankruptcy trend when limited dischargeability for such loans was adopted, so, to the extent it was the justification it wasn’t factually justified, just an excuse for a financial services industry subsidy. (IIRC, it was later displaced somewhat by expanded federally-guaranteed lensing then hit a sharp cliff around the 2009 financial crisis.) And for federally-guaranteed loans, private lenders have been excluded for many years, as private federally-guaranteed loans have been replaced with exclusively direct federal loans, and when therr was private lending they had federal guarantees, so encouraging lenders isn't a factor in that space, either. > Some of the "equity" based models offered by a few places (where you pay a percentage of income for X years) seem better to me. Those seem to a strictly-worse variation of the income-based plans already available for federal loans.

8note 5y ago

Waste seems like a strong word. The career isnt the only reason to learn things