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Earnings potential is a broad signal; individual borrowers still have quite a bit of risk even when pursuing a degree with a "high earning potential". Those ris

Earnings potential is a broad signal; individual borrowers still have quite a bit of risk even when pursuing a degree with a "high earning potential". Those risks can include things like the borrower drops out or gets kicked out of the degree program (or is otherwise unable to finish), the borrower being unwilling or unable to get a job that uses their degree, the market changing in a way that devalues the degree, the school or program losing its accreditation, etc. etc. etc. Student loans being generally dischargeable in bankruptcy would change lending practices, but what would change is that lenders would require the loan to be either cosigned by someone with an acceptable risk profile, or the loan would need to be backed by some type of collateral that could be collected in the event of a default. Given that private student loans often tend to be in the five or six digit range, the practical result of this type of change would be a significant portion of the population simply being unable to obtain them and being priced out of an education. This could arguably be a positive development if it forces educational institutions to keep their prices in check or risk pricing out most of their students. However, the idea that lenders would keep funding students attending engineering programs but not art programs (or whatever your vision was) is pure fantasy.

pingpongchef 5y ago
Those are still moves in the right direction. Requiring a cosigner for example brings in another party who can evaluate the situation and contribute to the decision to take out the loan vs. pursuing an alternative. Your point about putting pressure on prices is what I would call ideal: anything that could help rein in spending and deliver value is better than what we have now.
dmitrygr 5y ago
You WANT that. If significant part of population is priced out, education cost must drop. Supply and demand....
- prunetree 5y ago
  There are unintended consequences in what you are saying… If the amount earned falls below the cost of teaching, a quality professor will forgo the teaching opportunity in favour of industry or research.
  - dmitrygr 5y ago
    That's always been the case...
betwixthewires 5y ago
> being priced out of an education. Being priced out of a credential you mean. If you could not afford to pay your student loans back but were stuck in indentured servitude as a result of signing the paperwork, you were priced out anyway, you just didn't know it and you had no way out. Now you do. Also you can learn basically anything online for free now. You don't pay for an education, you pay for a degree. This will absolutely prevent the ridiculous cost of college from going up and it might go down. I expected several universities to downsize significantly as a result of this, and lots of reform in tenure, and less jobs will be able to demand credentials that their applicants don't actually need and degrees will be more fairly compensated. All in all this will be an amazing normalizing force for the job market, higher education and people in general.

pingpongchef 5y ago

Those are still moves in the right direction. Requiring a cosigner for example brings in another party who can evaluate the situation and contribute to the decision to take out the loan vs. pursuing an alternative. Your point about putting pressure on prices is what I would call ideal: anything that could help rein in spending and deliver value is better than what we have now.

dmitrygr 5y ago

You WANT that. If significant part of population is priced out, education cost must drop. Supply and demand....

prunetree 5y ago
There are unintended consequences in what you are saying… If the amount earned falls below the cost of teaching, a quality professor will forgo the teaching opportunity in favour of industry or research.
- dmitrygr 5y ago
  That's always been the case...

betwixthewires 5y ago

> being priced out of an education. Being priced out of a credential you mean. If you could not afford to pay your student loans back but were stuck in indentured servitude as a result of signing the paperwork, you were priced out anyway, you just didn't know it and you had no way out. Now you do. Also you can learn basically anything online for free now. You don't pay for an education, you pay for a degree. This will absolutely prevent the ridiculous cost of college from going up and it might go down. I expected several universities to downsize significantly as a result of this, and lots of reform in tenure, and less jobs will be able to demand credentials that their applicants don't actually need and degrees will be more fairly compensated. All in all this will be an amazing normalizing force for the job market, higher education and people in general.