4 ms·
If we're going to be forgiving loans, we shouldn't be giving them out in the first place. Otherwise, we're going to be in the same spot in one generation's time
by theandrewbailey 5y ago
If we're going to be forgiving loans, we shouldn't be giving them out in the first place. Otherwise, we're going to be in the same spot in one generation's time.
- deleted 5y ago[deleted]
- oh_sigh 5y agoThey were cancelled because it turns out the schools were scams. So it was a situation where the students got into a lot of debt, and got nothing(like an education or a worthwhile diploma) in return.
- thatguy0900 5y agoAre the schools no longer scams? All this does is help the schools, if new students think they might not actually have to pay that debt at the end.
- oh_sigh 5y agoDo you think the schools aren't punished for being scams, and they're just free to keep scamming students? And debt relief helps the debtor, not the original receiver of the funds. Example: https://en.wikipedia.org/wiki/ITT_Technical_Institute#Legal_issues https://en.wikipedia.org/wiki/ITT_Technical_Institute#Legal_... > On August 25, 2016, the U.S. Department of Education banned ITT Tech from enrolling students who receive federal aid. The Department also doubled the surety funds that ITT Tech was required to have, and to produce those funds within 30 days. Stock markets reacted with a punishing 35% drop, which triggered a halt in trading, raising concerns about whether ITT Educational would be able to survive this latest decision.[73] On September 6, 2016, ITT Tech ceased operations and closed all of its locations, issuing a statement that attributed the closing to the Department of Education's actions.[28]
- bombcar 5y agoThe mistake ITT Tech did was being "for profit" - run it as a non-profit and be satisfied with enriching the management, and sail on.
- oh_sigh 5y agoNo, not really. The wikipedia page I linked lays out all of the illegal things they did, which are still illegal for non-profit institutions.
- mc32 5y agoJust stop guaranteeing them, let students default on them. All these guaranteed loans that can't be discharged allows academic institutions to ratchet up the price. Let them calculate risk and price them accordingly.
- rendall 5y agoThis is the correct answer
- dehrmann 5y agoThe guarantee is the only reason the loans are made. Otherwise, you're lending a lot of money to someone with no income and no assets, and no one will want to make that loan.
- mc32 5y agoIf the program turns out successful students, I don't see why not? If the program turns out unmarketable skills, sure, charge through the roof and steer kids away from a useless degree.
- bee_rider 5y agoAnd then the colleges will have to reduce prices or go out of business.
- rhexs 5y agoUniversity employees are, unfortunately or not, consistent one party voting blocs. Cuts to them are highly unlikely.
- bee_rider 5y agoWhy not? I'm a university employee. Grad student, so maybe skewed a bit (are we talking about more permanent administrative employees? They I guess have different interests, since they aren't transient like me). 1) I'm going to, absent some massive political shift, vote for Democrats for the rest of my life anyway. So, they don't really have to play for my vote. 2) Playing around with boring stuff like tweaking market forces around by changing how loans work is sufficiently indirect that blame can probably be dodged. 3) We're all aware that the current system is pretty bad, a new solution that at least purports to be an attempt at something better can be sold to me pretty easily. 3a) Keep in mind that, at least in the STEM departments, the instructors are there for essentially irrational reasons -- they could make much more money in industry. At least some of the motivation is to produce interesting science and help students, paycheck be damned. Changes that hurt the last while helping the first two will probably be accepted with only minimal grumbling as long as they aren't too painful.
- tintor 5y agoIs not giving out loans at all necessarily better? Stop giving out loans, and higher education becomes even more elitist and out of reach.
- DocTomoe 5y agoOr higher education institutions will consider if they really need the ever-growing bubble of useless administrators who empty their coffers.
- janejeon 5y agoPlus, colleges and universities will think twice about increasingly charging an egregious amount for tuition if people aren't willing to buy their product no matter the price.
- fortran77 5y agoNo. Tuitions will drop like a rock.
- mrep 5y agoMaybe for the bottom schools but there are enough rich parents to pay/cosign a loan for like the top 50 schools and I highly doubt they would reduce tuition/spending and risk hurting their rankings.
- bombcar 5y agoNo matter how many loans or funding you get, it'll always be impossible for everyone to go to the top 50 schools, unless you simply outlaw all schools outside of the top 50.
- mrep 5y agoThat is not the point. The point is that kids whose parents cannot pay/cosign a loan can currently get into the top 50 schools but without the government backing the loans, none of them would likely be able to get in at all leaving the top schools only for rich kids.
- true_religion 5y agoI agree in theory. If the U.S. were a company dedicated to profit for its shareholders, then it certainly shouldn't give out bad loans. However, since the U.S. is a country dedicated to the benefit of its citizens then it's absolutely okay to provide loans as a form of social welfare, and accept a higher than normal rate of default. After all, providing these loans instead of the market was the entire point of the exercise.
- aaaaaaaaata 5y agoWait until you hear about the upward wealth redistribution through COVID loans...
- AtlasBarfed 5y agoAre you complaining about the massive amount of not-really-loans given to small and not small during COVID? Right? You're vociferously complaining about that frequent game played by corporations with outsized lobbying abilities to get loans that aren't really ever expected to be paid? How much was that in the grand scheme of printing money by the fed, a billion? Or are you angry about little poor people getting a pittance of money in the grand scheme of things? It is so strange how much people shrug off corporate handouts, but get up in arms when poor folks get a pittance from the government. Edit: my tone was a bit harsh, probably because I get this knee jerk reaction. It's probably because corporations are like gods. You can't kill them. They are omnipresent. With data hoovering, they are some form of omniscient. They are tireless, sleepless, don't require air, water, or food. The modern way to kill a corporation is probably so serpentine that it puts the best D&D plot to kill a god to shame. They don't technically have a physical body. They have servants, followers, a clergy, and power. They can cast "summon army of retainer lawyers" and send you to hell. Who are we to question if the god of money hands the god of cars magic printed-but-never-actually-printed numbers that aren't based in something?
- manuelabeledo 5y agoThe cost of higher education in the US is a joke. Universities are tax exempt, and highly profitable. Many have endowments over $1 billion [1]. Yet, the average cost in state is $10,000 per year, and almost $30,000 if out of state. For comparison, the tuition at Oxford College, one of the most prestigious institutions in the world, is $12,000 per year. Student loans may be considered even predatory [2], adding to the injury. There should be a better mechanism to allow people to go to college in the US, without subjecting them to half a lifetime of debt. [1] https://en.m.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment https://en.m.wikipedia.org/wiki/List_of_colleges_and_univers... [2] https://abcnews.go.com/US/wireStory/navient-settles-predatory-student-loan-claims-185b-82245945 https://abcnews.go.com/US/wireStory/navient-settles-predator...
- uf00lme 5y agoI don’t know the Us system at all but it sounds like what they are doing are rewarding public service workers (eg teachers?) or charity workers which likely don’t get paid well by cancelling their debt after a set time period of otherwise good behaviour. Which sounds equitable to me, although I’ll never understand why high school is free but university isnt.
- Fomite 5y agoIt's a program to get people, primarily with advanced degrees (i.e. Law, Medicine, Dentistry, PhDs, etc.) who would otherwise go to industry. You have to work for a state, local, federal or tribal government, or a 501c3 (non-profit) for ten years in order to qualify.
- Consultant32452 5y agoDon't forgive the loans, force the universities to refund the money. I shouldn't be punished for their malfeasance.