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I disagree. The US Government is the problem - by creating loans 18-year olds can't default on - when hardly any of them understand the consequences. If colle

I disagree. The US Government is the problem - by creating loans 18-year olds can't default on - when hardly any of them understand the consequences. If colleges don't offer ever juicier amenities, the students will take their debt elsewhere to get a better offering. Colleges are simply competing for students. The amount of debt they can get - and therefore the amount of school they can "afford" is the problem.

dudul 4y ago
It is, but proceeding with this free money giveaway without fixing the underlying problem is distasteful. It's literally trying to buy votes, it's not trying to make things better for the next generations.
sieabahlpark 4y ago
You know, they wouldn't have that problem if the loans could have the threat of default. You trim what you don't need and highly focus on what ensures the loan doesn't default. It is literally risk free money so they're going to inflate the price so that they get the most for least investment and least risk.
googlryas 4y ago
It's a good thing that student loans cannot be defaulted on. That makes lenders more likely to give out loans, which helps marginalized people many of whom might be the first to ever attend college in their family. Will a bank normally give a loan to an 18 year old with no credit score, with no cosigners, whose parents either have awful or no credit?
- Turing_Machine 4y ago
  There aren't any banks or other lenders involved (other than the government) and haven't been since way back in the Obama administration.
- cpursley 4y ago
  How are degrees without job prospects (which are actually capable of paying off the non-defaultable loans) helpful to marginalized people? It seems like just the opposite effect.
  - googlryas 4y ago
    Why would a college graduate have no job prospects? I think you'll find people coming from marginalized backgrounds are much more likely to enter a field of study with plentiful job prospects.
    - onlyrealcuzzo 4y ago
      Why do poor people disproportionately attend for-profit college and get non-STEM degrees then?
      - googlryas 4y ago
        They attend for profit colleges because they are commonly duped by promises of a certain salary or job placement. And commonly not sophisticated enough to understand that not all debts are created equal and accreditation matters in education.
- GenerocUsername 4y ago
  Should a bank give out a loan that cannot be escaped to someone incapable of returning it?
  - googlryas 4y ago
    The idea is that they will be able to return it after going to college.
    - kjeetgill 4y ago
      That's the principle, yea. But we wouldn't be having a student debt crisis if they was all there was to it. Enough people can't. We build bankruptcy into debt systems not just to give people relief, but also to take the risk off of people and put them on lenders with actuarial resources.
      - googlryas 4y ago
        Are we really having a student loan crisis? Interest rate has been zero and payment suspended for something like 2 years right?
- mr_cyborg 4y ago
  In this case, the government is who is giving out the loans, and it’s been that way since 2010. Then they pay someone else to service the loan after origination.
  - kgwgk 4y ago
    The one servicing the loan is the student.
    - zaroth 4y ago
      “Loan servicing” means the work of sending out statements, collecting payments, answering the help desk, tracking the accumulated interest, filing the tax forms, etc.
      - kgwgk 4y ago
        Interesting. The (edit: one) meaning of "loan servicing" used to be only (edit: not only) paying - not (edit: also) collecting payments. https://ahdictionary.com/word/search.html?q=service https://ahdictionary.com/word/search.html?q=service 3. To make interest payments on (a debt).
        onlyrealcuzzo 4y ago
        There's a difference between service payments and servicing / a debt servicer. IIUC, "service payment" comes from the fact that you are paying for a service - someone is providing you with debt as a service... The debt servicer.
        kgwgk 4y ago
        Definitely there is a difference between paying and collecting payments! I was aware of "servicing a loan" as "paying the interests". But I've found that the "administrative" meaning also goes back many decades.
- onlyrealcuzzo 4y ago
  And yet student loans were actually a driver of racial inequality - not an equalizer [1]. Without the ability to default - the loans made the situation worse. Some of that might be undone by forgiveness. [1] https://studentloanhero.com/featured/student-debt-demographics-study/ https://studentloanhero.com/featured/student-debt-demographi...
  - googlryas 4y ago
    I don't understand how that link shows student loans are a driver of inequality. Black people on average have a higher student loan debt because on average black people are poorer than white people in America. If black families are poorer than white families, it generally means they will need to take out a bigger loan to afford college.
    - onlyrealcuzzo 4y ago
      The problem is largely due to people of color disproportionately attending for-profit colleges to get expensive non-STEM degrees which largely prove to be worthless: https://www.aspeninstitute.org/blog-posts/worse-off-than-when-they-enrolled-the-consequence-of-for-profit-colleges-for-people-of-color/ https://www.aspeninstitute.org/blog-posts/worse-off-than-whe... It's almost as if you shouldn't be able to take on near unlimited non-default-able debt for something that is nearly worthless. These people were put into a debt trap at 18, not saved by the government. It's also interesting that finance is left out of most high school curriculum right before people are signing up for the second (and increasingly the first) most expensive purchase of their lives.
      - googlryas 4y ago
        I mean, they actually are saved by the government. The government has forgiven billions in student loan debt from shady for-profit institutions.
        onlyrealcuzzo 4y ago
        After 20 years of trapping them in debt...
LewisVerstappen 4y ago
Uhh I think we're making the same point here. > The amount of debt they can get - and therefore the amount of school they can "afford" is the problem. Yeah like, this is another form of a subsidy to colleges. Imagine if the US government would let you easily get a $200k loan to buy a car.
- onlyrealcuzzo 4y ago
  > Imagine if the US government would let you easily get a $200k loan to buy a car. Or have Fannie and Feddie artificially lower interest rates with a government bailout guarantee so you can get the same house... but pay 50% more for it (total, not monthly payment).
wdr1 4y ago
> by creating loans 18-year olds can't default on But you can default on them. https://www.consumerfinance.gov/about-us/blog/busting-myths-about-bankruptcy-and-private-student-loans/ https://www.consumerfinance.gov/about-us/blog/busting-myths-... "For too long, a myth has persisted that student loans are not dischargeable in bankruptcy. The myth is not true because, in fact, student loans can be discharged bankruptcy. We have seen the Department of Education take important steps to ensure that bankruptcy relief is available to federal student loan borrowers. "

dudul 4y ago

It is, but proceeding with this free money giveaway without fixing the underlying problem is distasteful. It's literally trying to buy votes, it's not trying to make things better for the next generations.

sieabahlpark 4y ago

You know, they wouldn't have that problem if the loans could have the threat of default. You trim what you don't need and highly focus on what ensures the loan doesn't default. It is literally risk free money so they're going to inflate the price so that they get the most for least investment and least risk.

googlryas 4y ago

It's a good thing that student loans cannot be defaulted on. That makes lenders more likely to give out loans, which helps marginalized people many of whom might be the first to ever attend college in their family. Will a bank normally give a loan to an 18 year old with no credit score, with no cosigners, whose parents either have awful or no credit?

Turing_Machine 4y ago
There aren't any banks or other lenders involved (other than the government) and haven't been since way back in the Obama administration.
cpursley 4y ago
How are degrees without job prospects (which are actually capable of paying off the non-defaultable loans) helpful to marginalized people? It seems like just the opposite effect.
- googlryas 4y ago
  Why would a college graduate have no job prospects? I think you'll find people coming from marginalized backgrounds are much more likely to enter a field of study with plentiful job prospects.
  - onlyrealcuzzo 4y ago
    Why do poor people disproportionately attend for-profit college and get non-STEM degrees then?
    - googlryas 4y ago
      They attend for profit colleges because they are commonly duped by promises of a certain salary or job placement. And commonly not sophisticated enough to understand that not all debts are created equal and accreditation matters in education.
GenerocUsername 4y ago
Should a bank give out a loan that cannot be escaped to someone incapable of returning it?
- googlryas 4y ago
  The idea is that they will be able to return it after going to college.
  - kjeetgill 4y ago
    That's the principle, yea. But we wouldn't be having a student debt crisis if they was all there was to it. Enough people can't. We build bankruptcy into debt systems not just to give people relief, but also to take the risk off of people and put them on lenders with actuarial resources.
    - googlryas 4y ago
      Are we really having a student loan crisis? Interest rate has been zero and payment suspended for something like 2 years right?
mr_cyborg 4y ago
In this case, the government is who is giving out the loans, and it’s been that way since 2010. Then they pay someone else to service the loan after origination.
- kgwgk 4y ago
  The one servicing the loan is the student.
  - zaroth 4y ago
    “Loan servicing” means the work of sending out statements, collecting payments, answering the help desk, tracking the accumulated interest, filing the tax forms, etc.
    - kgwgk 4y ago
      Interesting. The (edit: one) meaning of "loan servicing" used to be only (edit: not only) paying - not (edit: also) collecting payments. https://ahdictionary.com/word/search.html?q=service https://ahdictionary.com/word/search.html?q=service 3. To make interest payments on (a debt).
      - onlyrealcuzzo 4y ago
        There's a difference between service payments and servicing / a debt servicer. IIUC, "service payment" comes from the fact that you are paying for a service - someone is providing you with debt as a service... The debt servicer.
        kgwgk 4y ago
        Definitely there is a difference between paying and collecting payments! I was aware of "servicing a loan" as "paying the interests". But I've found that the "administrative" meaning also goes back many decades.
onlyrealcuzzo 4y ago
And yet student loans were actually a driver of racial inequality - not an equalizer [1]. Without the ability to default - the loans made the situation worse. Some of that might be undone by forgiveness. [1] https://studentloanhero.com/featured/student-debt-demographics-study/ https://studentloanhero.com/featured/student-debt-demographi...
- googlryas 4y ago
  I don't understand how that link shows student loans are a driver of inequality. Black people on average have a higher student loan debt because on average black people are poorer than white people in America. If black families are poorer than white families, it generally means they will need to take out a bigger loan to afford college.
  - onlyrealcuzzo 4y ago
    The problem is largely due to people of color disproportionately attending for-profit colleges to get expensive non-STEM degrees which largely prove to be worthless: https://www.aspeninstitute.org/blog-posts/worse-off-than-when-they-enrolled-the-consequence-of-for-profit-colleges-for-people-of-color/ https://www.aspeninstitute.org/blog-posts/worse-off-than-whe... It's almost as if you shouldn't be able to take on near unlimited non-default-able debt for something that is nearly worthless. These people were put into a debt trap at 18, not saved by the government. It's also interesting that finance is left out of most high school curriculum right before people are signing up for the second (and increasingly the first) most expensive purchase of their lives.
    - googlryas 4y ago
      I mean, they actually are saved by the government. The government has forgiven billions in student loan debt from shady for-profit institutions.
      - onlyrealcuzzo 4y ago
        After 20 years of trapping them in debt...

LewisVerstappen 4y ago

Uhh I think we're making the same point here. > The amount of debt they can get - and therefore the amount of school they can "afford" is the problem. Yeah like, this is another form of a subsidy to colleges. Imagine if the US government would let you easily get a $200k loan to buy a car.

onlyrealcuzzo 4y ago
> Imagine if the US government would let you easily get a $200k loan to buy a car. Or have Fannie and Feddie artificially lower interest rates with a government bailout guarantee so you can get the same house... but pay 50% more for it (total, not monthly payment).

wdr1 4y ago

> by creating loans 18-year olds can't default on But you can default on them. https://www.consumerfinance.gov/about-us/blog/busting-myths-about-bankruptcy-and-private-student-loans/ https://www.consumerfinance.gov/about-us/blog/busting-myths-... "For too long, a myth has persisted that student loans are not dischargeable in bankruptcy. The myth is not true because, in fact, student loans can be discharged bankruptcy. We have seen the Department of Education take important steps to ensure that bankruptcy relief is available to federal student loan borrowers. "