5 ms·

I feel bad for those who have their lives ruined by student debt without compensating income, but I need some reform with any bailout.

bdcravens 2y ago
I tend to agree, and I'm not against student loan help (I paid my loans off years ago). Something along the lines of tuition caps in order to receive loans backed by the federal government (similar to how insurance companies cap what they pay regardless of what the medical provider bills)
- bachmeier 2y ago
  That's not how federal student loans work. You can't borrow unlimited amounts to cover any amount of tuition, and unlike insurance companies, it's not the government paying the bill. For instance, you can only get $5500 for the first year. Tuition caps would be an orthogonal policy.
  - bdcravens 2y ago
    I'm aware of the caps and the fact that the loans are backed, not paid, by the government. However, attaching conditions to eligibility is a tool the government can wield.
    - llamaimperative 2y ago
      Just make them dismissable in bankruptcy and the lenders will figure out how to lend responsibly
      - bachmeier 2y ago
        This comes up so much, but there's no need to fight that battle (and it would be a big one). Put a max on the percentage of your income that needs to go to student loan repayment, like 7%, and a time limit on repayment, like 10 or 20 years.
        llamaimperative 2y ago
        I like this concept! Though I worry how "creative" borrowers could be in suppressing their reportable income through the payback period...
- krger 2y ago
  The economics of higher education in the United States are definitely ripe for reform—especially for public institutions—but I think we have much better places to be looking for ideas than the health insurance industry.
  - bdcravens 2y ago
    That was just an analogy, not the source of the idea. Government has been playing the carrots and sticks game a lot longer than the insurance industry.
toomuchtodo 2y ago
Congress has no will to reform unfortunately, so you do what you can with what you have. Go forward improves due to pre-college cohorts substantially devaluing a college education and therefore avoiding it (and the loans attached) [1] [2]. To note, some employers are starting to drop the credential requirement [3] [4] [5]. If you can hire without it, why are you asking for it? [1] https://www.pewresearch.org/social-trends/2024/05/23/is-college-worth-it-2/ https://www.pewresearch.org/social-trends/2024/05/23/is-coll... [2] https://www.cnbc.com/2024/05/23/is-college-worth-the-cost.html https://www.cnbc.com/2024/05/23/is-college-worth-the-cost.ht... [3] https://www.npr.org/2024/08/26/nx-s1-5084214/why-states-are-dropping-the-4-year-college-requirement-for-some-government-jobs https://www.npr.org/2024/08/26/nx-s1-5084214/why-states-are-... [4] https://www.highereddive.com/news/nearly-half-of-companies-plan-to-eliminate-bachelors-degree-requirements/702277/ https://www.highereddive.com/news/nearly-half-of-companies-p... [5] https://www.cnbc.com/2024/03/22/1-in-3-companies-are-ditching-college-degree-requirements-for-salaried-jobs.html https://www.cnbc.com/2024/03/22/1-in-3-companies-are-ditchin...
Ancalagon 2y ago
Remove all charges on the debt associated with interest growth over 2-3% per year. Limit all new student debt to a maximum of 2-3% interest. Cap tuition everywhere - you could ease into this by the federal government steadily decreasing caps and simultaneously reducing loan amounts. Put everyone on an income-based payment plan with a guaranteed 10-year payoff timelimit if they make all their payments (reasonable forgiveness on timely payments but more than a month late or so and that gets added on to the end of the 10-year limit). Not easy for any party, but pretty fair IMHO.
- Ekaros 2y ago
  2-3% is currently too low. I say just cap it to FED rate + 1%. After all it is government backed so rate should be same as fed rate.

bdcravens 2y ago

I tend to agree, and I'm not against student loan help (I paid my loans off years ago). Something along the lines of tuition caps in order to receive loans backed by the federal government (similar to how insurance companies cap what they pay regardless of what the medical provider bills)

bachmeier 2y ago
That's not how federal student loans work. You can't borrow unlimited amounts to cover any amount of tuition, and unlike insurance companies, it's not the government paying the bill. For instance, you can only get $5500 for the first year. Tuition caps would be an orthogonal policy.
- bdcravens 2y ago
  I'm aware of the caps and the fact that the loans are backed, not paid, by the government. However, attaching conditions to eligibility is a tool the government can wield.
  - llamaimperative 2y ago
    Just make them dismissable in bankruptcy and the lenders will figure out how to lend responsibly
    - bachmeier 2y ago
      This comes up so much, but there's no need to fight that battle (and it would be a big one). Put a max on the percentage of your income that needs to go to student loan repayment, like 7%, and a time limit on repayment, like 10 or 20 years.
      - llamaimperative 2y ago
        I like this concept! Though I worry how "creative" borrowers could be in suppressing their reportable income through the payback period...
krger 2y ago
The economics of higher education in the United States are definitely ripe for reform—especially for public institutions—but I think we have much better places to be looking for ideas than the health insurance industry.
- bdcravens 2y ago
  That was just an analogy, not the source of the idea. Government has been playing the carrots and sticks game a lot longer than the insurance industry.

toomuchtodo 2y ago

Congress has no will to reform unfortunately, so you do what you can with what you have. Go forward improves due to pre-college cohorts substantially devaluing a college education and therefore avoiding it (and the loans attached) [1] [2]. To note, some employers are starting to drop the credential requirement [3] [4] [5]. If you can hire without it, why are you asking for it? [1] https://www.pewresearch.org/social-trends/2024/05/23/is-college-worth-it-2/ https://www.pewresearch.org/social-trends/2024/05/23/is-coll... [2] https://www.cnbc.com/2024/05/23/is-college-worth-the-cost.html https://www.cnbc.com/2024/05/23/is-college-worth-the-cost.ht... [3] https://www.npr.org/2024/08/26/nx-s1-5084214/why-states-are-dropping-the-4-year-college-requirement-for-some-government-jobs https://www.npr.org/2024/08/26/nx-s1-5084214/why-states-are-... [4] https://www.highereddive.com/news/nearly-half-of-companies-plan-to-eliminate-bachelors-degree-requirements/702277/ https://www.highereddive.com/news/nearly-half-of-companies-p... [5] https://www.cnbc.com/2024/03/22/1-in-3-companies-are-ditching-college-degree-requirements-for-salaried-jobs.html https://www.cnbc.com/2024/03/22/1-in-3-companies-are-ditchin...

Ancalagon 2y ago

Remove all charges on the debt associated with interest growth over 2-3% per year. Limit all new student debt to a maximum of 2-3% interest. Cap tuition everywhere - you could ease into this by the federal government steadily decreasing caps and simultaneously reducing loan amounts. Put everyone on an income-based payment plan with a guaranteed 10-year payoff timelimit if they make all their payments (reasonable forgiveness on timely payments but more than a month late or so and that gets added on to the end of the 10-year limit). Not easy for any party, but pretty fair IMHO.

Ekaros 2y ago
2-3% is currently too low. I say just cap it to FED rate + 1%. After all it is government backed so rate should be same as fed rate.