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Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy. Prices will collapse to what people are willing to

Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy. Prices will collapse to what people are willing to pay in real time, or save up for.

rayiner 3y ago
The government cannot and will not do that, because such a policy would have racially disparate impacts.
- DesiLurker 3y ago
  Govt can totally do that. but you are right in that only congress can do that via legislation. every policy that effects poor has racially disparate impact so that argument can rally be applied anywhere.
- philipkglass 3y ago
  There are many things that the government doesn't guarantee loans for. Why is not-guaranteeing for higher education more of a racially disparate action than not-guaranteeing for e.g. vehicle loans?
- dragonwriter 3y ago
  The government actually can do, and often does, policy with racially disparate impacts. Disparate impact is not a Constitutional limit on government discrimination, its a judicially-created rule in the application of certain statutory anti-discrimination laws. (And the disparate impact rule is politically and legally unpopular with the same faction that currently dominates the Supreme Court and whose members on the Court have shown an unusual willingness to discard precedent, so its quite likely it won’t be a limit on discriminatiom under those statutes much longer, either.)
  - rayiner 3y ago
    I didn’t say it’s a constitutional issue. It’s a political non-starter.
    - dragonwriter 3y ago
      > I didn’t say it’s a constitutional issue. It’s a political non-starter And I said your argument for that is nonsense, since the government does lots that has racially disparate impacts.
  - gottorf 3y ago
    The disparate impact rule is challenging to begin with because literally every policy has a disparate impact, because there is and always will be an uneven distribution of people of whatever cultural or ethnic subgroup they can be divided into in whatever social roles that exist. It should rightly be rid of. There are many other better ways to address discrimination.
    - dragonwriter 3y ago
      > The disparate impact rule is challenging to begin with because literally every policy has a disparate impact “Disparate impact” prohibited by the rule isn't just unequal impact, its unequal impact without sufficient justification (what qualifies for that differs between the employment and housing contexts where the rule is applied.)
DesiLurker 3y ago
Right, let the market decide interest rate charged for them based on risk of default. this will also quickly filter out pointless degrees without much carrier prospect because interest rate would be high. right now basically govt has created a fully protected predatory loan that can follow you to your grave. IDK why is this so hard to understand.
jedberg 3y ago
That's how things used to be. It means that only rich people can go to college, because they are the only ones who can afford it. Prices can only come down so far. The college still has to pay professors and maintain facilities. There needs to be a middle ground where we support poor but promising students in a way that doesn't inflate prices. I don't know what that solution is.
- gameman144 3y ago
  > It means that only rich people can go to college, because they are the only ones who can afford it. I hear this a lot, but I don't understand the argument to be honest. If someone is poor today, then they can take an exorbitant amount of debt that they can't discharge in order to attend university. In a world where loans are dischargeable in bankruptcy and the federal government limits subsidizes loans, we'd expect prices to fall somewhat and rates to rise somewhat. It seems like we would still expect the poor student to be able to take on a large amount of debt to attend university, though, no?
  - jedberg 3y ago
    The interest rates would be so high that it wouldn't make sense for a promising student to take that loan. If you're a loan company and someone comes to you asking for $100,000, and they have no credit and no family with assets, even with a 4.0 GPA and perfect SATs, they are still a huge risk.
    - gameman144 3y ago
      This seems fine to me. If someone has no assets and no reasonable prospects to pay back $100,000 of debt, then saddling them with $100,000 of debt is a bad idea. Additionally, discharging student loans in bankruptcy should absolutely not be a way to get off scot-free, it's meant as an escape valve. If your options are the terrible downsides of declaring bankruptcy and the terrible downsides of a life in extreme debt, neither option is great, but having the choice is useful.
      - 3y ago
dragonwriter 3y ago
> Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy. Proper thing is for the government to stop issuing the loans, and instead do need-based grants plus establish cost and quality controls for institutions that wish to be grant eligible, while prioritizing federal institutional funding other than direct student aid for institutions that, whether througj grant eligibility or their own pricing and in-house aid programs, or both, meet set financial accessibility standards.

Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy. Prices will collapse to what people are willing to pay in real time, or save up for.

rayiner 3y ago

The government cannot and will not do that, because such a policy would have racially disparate impacts.

DesiLurker 3y ago
Govt can totally do that. but you are right in that only congress can do that via legislation. every policy that effects poor has racially disparate impact so that argument can rally be applied anywhere.
philipkglass 3y ago
There are many things that the government doesn't guarantee loans for. Why is not-guaranteeing for higher education more of a racially disparate action than not-guaranteeing for e.g. vehicle loans?
dragonwriter 3y ago
The government actually can do, and often does, policy with racially disparate impacts. Disparate impact is not a Constitutional limit on government discrimination, its a judicially-created rule in the application of certain statutory anti-discrimination laws. (And the disparate impact rule is politically and legally unpopular with the same faction that currently dominates the Supreme Court and whose members on the Court have shown an unusual willingness to discard precedent, so its quite likely it won’t be a limit on discriminatiom under those statutes much longer, either.)
- rayiner 3y ago
  I didn’t say it’s a constitutional issue. It’s a political non-starter.
  - dragonwriter 3y ago
    > I didn’t say it’s a constitutional issue. It’s a political non-starter And I said your argument for that is nonsense, since the government does lots that has racially disparate impacts.
- gottorf 3y ago
  The disparate impact rule is challenging to begin with because literally every policy has a disparate impact, because there is and always will be an uneven distribution of people of whatever cultural or ethnic subgroup they can be divided into in whatever social roles that exist. It should rightly be rid of. There are many other better ways to address discrimination.
  - dragonwriter 3y ago
    > The disparate impact rule is challenging to begin with because literally every policy has a disparate impact “Disparate impact” prohibited by the rule isn't just unequal impact, its unequal impact without sufficient justification (what qualifies for that differs between the employment and housing contexts where the rule is applied.)

DesiLurker 3y ago

Right, let the market decide interest rate charged for them based on risk of default. this will also quickly filter out pointless degrees without much carrier prospect because interest rate would be high. right now basically govt has created a fully protected predatory loan that can follow you to your grave. IDK why is this so hard to understand.

jedberg 3y ago

That's how things used to be. It means that only rich people can go to college, because they are the only ones who can afford it. Prices can only come down so far. The college still has to pay professors and maintain facilities. There needs to be a middle ground where we support poor but promising students in a way that doesn't inflate prices. I don't know what that solution is.

gameman144 3y ago
> It means that only rich people can go to college, because they are the only ones who can afford it. I hear this a lot, but I don't understand the argument to be honest. If someone is poor today, then they can take an exorbitant amount of debt that they can't discharge in order to attend university. In a world where loans are dischargeable in bankruptcy and the federal government limits subsidizes loans, we'd expect prices to fall somewhat and rates to rise somewhat. It seems like we would still expect the poor student to be able to take on a large amount of debt to attend university, though, no?
- jedberg 3y ago
  The interest rates would be so high that it wouldn't make sense for a promising student to take that loan. If you're a loan company and someone comes to you asking for $100,000, and they have no credit and no family with assets, even with a 4.0 GPA and perfect SATs, they are still a huge risk.
  - gameman144 3y ago
    This seems fine to me. If someone has no assets and no reasonable prospects to pay back $100,000 of debt, then saddling them with $100,000 of debt is a bad idea. Additionally, discharging student loans in bankruptcy should absolutely not be a way to get off scot-free, it's meant as an escape valve. If your options are the terrible downsides of declaring bankruptcy and the terrible downsides of a life in extreme debt, neither option is great, but having the choice is useful.
    - 3y ago

dragonwriter 3y ago

> Proper solution is government to stop guaranteeing the loans and to allow people to put them in bankruptcy. Proper thing is for the government to stop issuing the loans, and instead do need-based grants plus establish cost and quality controls for institutions that wish to be grant eligible, while prioritizing federal institutional funding other than direct student aid for institutions that, whether througj grant eligibility or their own pricing and in-house aid programs, or both, meet set financial accessibility standards.