3 ms·

> SoFi exists because of a quirk in the federal student loan program. While the government charges different interest rates depending on the loan type, within t

by breck 4y ago

> SoFi exists because of a quirk in the federal student loan program. While the government charges different interest rates depending on the loan type, within those loan types there is no differentiation. So many businesses in this country arise because of these "quirks", which are really big f*cking mistakes, and then entrench themselves and the problems fester. The U.S. government treating a $100,000 loan for an English lit degree and a civil engineering degree the same is silly. Student loans should be dischargeable in bankruptcy so market forces can act to keep things sane.

wolverine876 4y ago
> The U.S. government treating a $100,000 loan for an English lit degree and a civil engineering degree the same is silly. Personally, I believe that, generally, the former is more valuable - the problems in our society are not from a lack of engineering, but a lack of understanding the world and basic humanities. But regardless, should your or my opinions be imposed on the free choice of the students? I believe in freedom, in free choice, and that they should decide.
- yanderekko 4y ago
  I believe in freedom, free choice, and actuarially-fair risk assessments. If an English lit major is more likely to fall behind on their loan payments, then that should be taken into account when determining the interest rates on those loans.
  - wolverine876 4y ago
    > the interest rates on those loans Why are these important? > actuarially-fair risk assessments This seems to show that it's not about freedom, but greed. Utter selfishness is not freedom, though people are free to be utterly selfish (to a point). Any freedom that's meaningful is freedom for others; everyone wants 'freedom' for themselves. Hospitals, feeding the unfed, housing the unhoused, freedom for the oppressed - all probably have poor actuarial risk assessments relative to other investments, on purely financial terms used by Wall Street. Yet they offer tremendous return on investment in welfare of individuals, which is the purpose of an economy and society. Money itself is not value, and it's a poor metric of value to the world. English literature (and other humanities) study provides the most value to our society, IMHO, however they are paid. I don't want the arbiters of money to be the arbiters of education and free choice of people. Not only does it stagnate our society and economy, it's not a free society if we can only do what wealthy entities allow.
    - yanderekko 4y ago
      I think taxpayers have an interest in whether their tax dollars are getting thrown into a hole, and that the government should avoid loans that will predictably lead to losses with no offsetting social benefits. If you want to counter by calling them selfish for doing so, you're free to see how that works out for your side at the ballet box, I guess. I would guess that most people do not see English literature majors as holding together the fabric of society in the same way as access to housing or food does.
      - lokar 4y ago
        Many people would agree that students getting a quality education in literature, art, history, etc lead to many important social benefits.
      - wolverine876 4y ago
        You keep asserting that it's a waste, but offer no argument or evidence for why that is so. I've demonstrated (here or in another subthread) much evidence and reason why they are valuable. All you have, I suspect, is repetition and an Internet echo chamber.
- mannerheim 4y ago
  Then they can pay for it with their own money.
  - wolverine876 4y ago
    I don't follow this argument, unless you mean everyone should pay for college with their own money (which they obviously can't), in which case it has nothing to do with their field of study.
    - mannerheim 4y ago
      Freedom is for how you spend your money, not others'.
      - wolverine876 4y ago
        Spending money collectively is necessary for freedom. No taxes, no common good, no freedom.
        mannerheim 4y ago
        You are shifting the topic. It is not taking away someone's freedom to charge them different amounts of interest depending on how likely they are to repay a loan, or to not issue loans if they are unlikely to repay. They still possess the freedom to pay for it themselves.
        wolverine876 4y ago
        > It is not taking away someone's freedom to charge them different amounts of interest depending on how likely they are to repay a loan, or to not issue loans if they are unlikely to repay. It is if the person therefore lacks the ability to borrow, and lacks the freedom to study and make the most of their life. Trapping people in ignorance and poverty is quite a blow to their freedom.
        4y ago
yanderekko 4y ago
Yep. The government choosing to not price-differentiate based on obvious risk factors is not a "quirk", it's a willful blindness that has created an arbitrage opportunity. I'm a bit surprised that there isn't hand-wringing about these private companies causing adverse selection in the public student loan risk pool, but I imagine that this is a bit too complicated to explain to the article's intended audience.

by breck 4y ago

wolverine876 4y ago

> The U.S. government treating a $100,000 loan for an English lit degree and a civil engineering degree the same is silly. Personally, I believe that, generally, the former is more valuable - the problems in our society are not from a lack of engineering, but a lack of understanding the world and basic humanities. But regardless, should your or my opinions be imposed on the free choice of the students? I believe in freedom, in free choice, and that they should decide.

yanderekko 4y ago
I believe in freedom, free choice, and actuarially-fair risk assessments. If an English lit major is more likely to fall behind on their loan payments, then that should be taken into account when determining the interest rates on those loans.
- wolverine876 4y ago
  > the interest rates on those loans Why are these important? > actuarially-fair risk assessments This seems to show that it's not about freedom, but greed. Utter selfishness is not freedom, though people are free to be utterly selfish (to a point). Any freedom that's meaningful is freedom for others; everyone wants 'freedom' for themselves. Hospitals, feeding the unfed, housing the unhoused, freedom for the oppressed - all probably have poor actuarial risk assessments relative to other investments, on purely financial terms used by Wall Street. Yet they offer tremendous return on investment in welfare of individuals, which is the purpose of an economy and society. Money itself is not value, and it's a poor metric of value to the world. English literature (and other humanities) study provides the most value to our society, IMHO, however they are paid. I don't want the arbiters of money to be the arbiters of education and free choice of people. Not only does it stagnate our society and economy, it's not a free society if we can only do what wealthy entities allow.
  - yanderekko 4y ago
    I think taxpayers have an interest in whether their tax dollars are getting thrown into a hole, and that the government should avoid loans that will predictably lead to losses with no offsetting social benefits. If you want to counter by calling them selfish for doing so, you're free to see how that works out for your side at the ballet box, I guess. I would guess that most people do not see English literature majors as holding together the fabric of society in the same way as access to housing or food does.
    - lokar 4y ago
      Many people would agree that students getting a quality education in literature, art, history, etc lead to many important social benefits.
    - wolverine876 4y ago
      You keep asserting that it's a waste, but offer no argument or evidence for why that is so. I've demonstrated (here or in another subthread) much evidence and reason why they are valuable. All you have, I suspect, is repetition and an Internet echo chamber.
mannerheim 4y ago
Then they can pay for it with their own money.
- wolverine876 4y ago
  I don't follow this argument, unless you mean everyone should pay for college with their own money (which they obviously can't), in which case it has nothing to do with their field of study.
  - mannerheim 4y ago
    Freedom is for how you spend your money, not others'.
    - wolverine876 4y ago
      Spending money collectively is necessary for freedom. No taxes, no common good, no freedom.
      - mannerheim 4y ago
        You are shifting the topic. It is not taking away someone's freedom to charge them different amounts of interest depending on how likely they are to repay a loan, or to not issue loans if they are unlikely to repay. They still possess the freedom to pay for it themselves.
        wolverine876 4y ago
        > It is not taking away someone's freedom to charge them different amounts of interest depending on how likely they are to repay a loan, or to not issue loans if they are unlikely to repay. It is if the person therefore lacks the ability to borrow, and lacks the freedom to study and make the most of their life. Trapping people in ignorance and poverty is quite a blow to their freedom.
        4y ago

yanderekko 4y ago

Yep. The government choosing to not price-differentiate based on obvious risk factors is not a "quirk", it's a willful blindness that has created an arbitrage opportunity. I'm a bit surprised that there isn't hand-wringing about these private companies causing adverse selection in the public student loan risk pool, but I imagine that this is a bit too complicated to explain to the article's intended audience.