3 ms·

If it is quite profitable to get a certain education, why would it need the tax payer to provide the loan for it? Shouldn't that be easy to fund from the privat

If it is quite profitable to get a certain education, why would it need the tax payer to provide the loan for it? Shouldn't that be easy to fund from the private sector?

threetonesun 3mo ago
Assuming you’re not talking about a loan to do this (at which point you’ve reinvented indentured servitude), back when there was a smaller pool of college graduates it was easier to find a company that would pay for your education, some even offering bonuses if you completed it.
- RandomLensman 3mo ago
  Not sure I understand: why would a loan be indentured servitude if it funds an education (not binding employment etc.)?
  - delusional 3mo ago
    If there is no expectation of future income or employment, and no collateral since you don't have any. Then who would lend you the money? I don't think anyone is stopping the private sector from extending "student loans" if they were such a good business.
    - RandomLensman 3mo ago
      Of course, there would be an expectation for loan repayment (most likely from employment somewhere). Is any unsecured/uncollateralized loan indentured servitude for you then?
      - techpression 3mo ago
        So company A pays for your education to go work for company B (their competitor) and all they get is a lousy interest rate with no security? If they don’t get ten years (or whatever amount) of your output, why waste the time and energy when someone else will do it for them?
        RandomLensman 3mo ago
        Lending is a business in itself, no?
        threetonesun 3mo ago
        Sure. Maybe in the future we can just add a years tuition to the Apple Card when buying the Macbook for college.
        RandomLensman 3mo ago
        Why not make education free(ish) then?
      - delusional 3mo ago
        If what you're imagining is a zero equity zero income dischargable unsecured consumer loan to 18 year olds, then nobody is going to provide that loan.
HPsquared 3mo ago
Student loans aren't your standard private sector loan though. They are a special legal category, which is why they can't be discharged in bankruptcy. All the usual borrowing standards don't apply either. No commercial lender would give that size of loan to an 18 year old with no collateral. The collateral is effectively a claim on the person's future earnings. What a crazy contract to have young people routinely pressured into.
- ourmandave 3mo ago
  You can discharge them through bankruptcy but it's not automatic. You have to prove repayment would cause "undue hardship". https://studentaid.gov/manage-loans/forgiveness-cancellation/bankruptcy https://studentaid.gov/manage-loans/forgiveness-cancellation...
  - HPsquared 3mo ago
    Interesting, but that seems to be for exceptional circumstances ... A few hundred cases per year apparently. But maybe this route could grow substantially. Interesting reading- https://www.ablj.org/bridging-the-student-loan-bankruptcy-gap-vol-99-issue-3-html/ https://www.ablj.org/bridging-the-student-loan-bankruptcy-ga...
  - whatisthiseven 3mo ago
    What that page doesn't tell you is the precedence courts have set for those tests is so high that nearly no one qualifies for them, and thus it is the case that the loans are virtually impossible to discharge even if it means losing your home and all your possessions.
  - Spooky23 3mo ago
    lol no. They were designed initially so that law and medical students wouldn’t be able to skip out on loans as was common early on. There are the paths out: repayment, death and fleeing the country.
- ClumsyPilot 3mo ago
  > The collateral is effectively a claim on the person's future earnings Back in the Russian empire a person could buy themselves out of serfdom if they could come up with the money… which was difficult for obvious reasons. And this feels like a modern reincarnation of the system. It’s categorised as ‘ Unfree Labour’
tyleo 3mo ago
I think the point is that it’s so beneficial to society for people to get these degrees that we should lower the barrier even further. I think you are right that having the private sector fund it is a good base state, I suspect you’d find that you can improve on that base by funding it with some public money. We’ve probably gone a little too far in that direction though.
arenaninja 3mo ago
I'm not convinced it's necessary but it sure as hell is nice. I got through undergrad with subsidized loans and it was nice to not worry about interest while I wasn't working yet. The private sector does fund some loans but I think the current program just needs re-working. Forgiving all these loans is a no-go so this measure is a step in the right direction. I'd like them to lock down the interest rate to 2% + inflation next. The government does need to incentivize a certain degree of higher education for innovation.

If it is quite profitable to get a certain education, why would it need the tax payer to provide the loan for it? Shouldn't that be easy to fund from the private sector?

threetonesun 3mo ago

Assuming you’re not talking about a loan to do this (at which point you’ve reinvented indentured servitude), back when there was a smaller pool of college graduates it was easier to find a company that would pay for your education, some even offering bonuses if you completed it.

RandomLensman 3mo ago
Not sure I understand: why would a loan be indentured servitude if it funds an education (not binding employment etc.)?
- delusional 3mo ago
  If there is no expectation of future income or employment, and no collateral since you don't have any. Then who would lend you the money? I don't think anyone is stopping the private sector from extending "student loans" if they were such a good business.
  - RandomLensman 3mo ago
    Of course, there would be an expectation for loan repayment (most likely from employment somewhere). Is any unsecured/uncollateralized loan indentured servitude for you then?
    - techpression 3mo ago
      So company A pays for your education to go work for company B (their competitor) and all they get is a lousy interest rate with no security? If they don’t get ten years (or whatever amount) of your output, why waste the time and energy when someone else will do it for them?
      - RandomLensman 3mo ago
        Lending is a business in itself, no?
        threetonesun 3mo ago
        Sure. Maybe in the future we can just add a years tuition to the Apple Card when buying the Macbook for college.
        RandomLensman 3mo ago
        Why not make education free(ish) then?
    - delusional 3mo ago
      If what you're imagining is a zero equity zero income dischargable unsecured consumer loan to 18 year olds, then nobody is going to provide that loan.

HPsquared 3mo ago

Student loans aren't your standard private sector loan though. They are a special legal category, which is why they can't be discharged in bankruptcy. All the usual borrowing standards don't apply either. No commercial lender would give that size of loan to an 18 year old with no collateral. The collateral is effectively a claim on the person's future earnings. What a crazy contract to have young people routinely pressured into.

ourmandave 3mo ago
You can discharge them through bankruptcy but it's not automatic. You have to prove repayment would cause "undue hardship". https://studentaid.gov/manage-loans/forgiveness-cancellation/bankruptcy https://studentaid.gov/manage-loans/forgiveness-cancellation...
- HPsquared 3mo ago
  Interesting, but that seems to be for exceptional circumstances ... A few hundred cases per year apparently. But maybe this route could grow substantially. Interesting reading- https://www.ablj.org/bridging-the-student-loan-bankruptcy-gap-vol-99-issue-3-html/ https://www.ablj.org/bridging-the-student-loan-bankruptcy-ga...
- whatisthiseven 3mo ago
  What that page doesn't tell you is the precedence courts have set for those tests is so high that nearly no one qualifies for them, and thus it is the case that the loans are virtually impossible to discharge even if it means losing your home and all your possessions.
- Spooky23 3mo ago
  lol no. They were designed initially so that law and medical students wouldn’t be able to skip out on loans as was common early on. There are the paths out: repayment, death and fleeing the country.
ClumsyPilot 3mo ago
> The collateral is effectively a claim on the person's future earnings Back in the Russian empire a person could buy themselves out of serfdom if they could come up with the money… which was difficult for obvious reasons. And this feels like a modern reincarnation of the system. It’s categorised as ‘ Unfree Labour’

tyleo 3mo ago

I think the point is that it’s so beneficial to society for people to get these degrees that we should lower the barrier even further. I think you are right that having the private sector fund it is a good base state, I suspect you’d find that you can improve on that base by funding it with some public money. We’ve probably gone a little too far in that direction though.

arenaninja 3mo ago

I'm not convinced it's necessary but it sure as hell is nice. I got through undergrad with subsidized loans and it was nice to not worry about interest while I wasn't working yet. The private sector does fund some loans but I think the current program just needs re-working. Forgiving all these loans is a no-go so this measure is a step in the right direction. I'd like them to lock down the interest rate to 2% + inflation next. The government does need to incentivize a certain degree of higher education for innovation.