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Old 05-10-2020, 05:40 PM
UltraVires is offline
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Make student loans dischargeable in bankruptcy


In this divided political climate, we have the Bernie Sanders wing of the Dems wanting to forgive all student loans and make college free. On the other side, we have the Republicans who are vehemently opposed to any such thing.

But who would like to disagree with my modest proposal in the title of this thread? I think it is an eminently sensible thing, which should at least start to address the issue of rising college costs and government accountability for them.

Further, I don't know why student loans should be treated any differently than other forms of debt. It is fair that Citibank, for example, should have to eat $60k of credit card bills that a debtor runs up when that debtor files for bankruptcy, so why should the government not have to eat $60k worth of student loans?

Also, this would be a modest proposal because it allows those who are financially suffering to get the relief they need while those who benefited from the loans repay as they agreed. The discharge comes at the high cost of a damaged credit rating for many years.

What are the arguments against this and why should student loans be so special in bankruptcy?
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Old 05-10-2020, 06:06 PM
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The main argument against this is that a typical student graduating at age 22 who has student loans would typically have no assets having spent them to get through college. If you could discharge student loans through bankruptcy, it would be very tempting to get a lot of student loans and declare bankruptcy as soon as you graduate, and many students would likely do so. To break even, lenders would need to charge very high interest rates to have the profits on the few loans that did pay off offset the losses on the defaults. And remember the loss one default would be many times the interest profit on those that did not. And the profit is not the entire amount of interest paid. The lender could get that on any much safer loan. The profit relative to that is only the extra interest charge for the risk. Student loans would probably become one of the very riskiest types of loans.
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Old 05-10-2020, 07:27 PM
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The main argument against this is that a typical student graduating at age 22 who has student loans would typically have no assets having spent them to get through college. If you could discharge student loans through bankruptcy, it would be very tempting to get a lot of student loans and declare bankruptcy as soon as you graduate, and many students would likely do so. To break even, lenders would need to charge very high interest rates to have the profits on the few loans that did pay off offset the losses on the defaults. And remember the loss one default would be many times the interest profit on those that did not. And the profit is not the entire amount of interest paid. The lender could get that on any much safer loan. The profit relative to that is only the extra interest charge for the risk. Student loans would probably become one of the very riskiest types of loans.
I've heard that, but is that necessarily true? After you graduate, you are probably looking to get married, start my adult life, buy a house, buy a car. You can't buy those things if your credit is in the dumps.

Further, bankruptcy cases have trustees that oversee this stuff. If a person graduates, get a good job, and just wants to declare bankruptcy to shed the student loan debt, the trustee should look at the petition and say, "You are not bankrupt. You can easily make student loan payments with your salary. I'm recommending a dismissal of this case."
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Old 05-10-2020, 07:37 PM
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And at the risk of opening another line of debate, perhaps the trustee's role would provide information to the student loan industry. If he/she looks at the petition and says "Yes, you took out $120k in student loans, got a degree in basket weaving and now can only make a salary of $30k so you are bankrupt and cannot make these payments" then perhaps these court cases would inform the industry not to loan so much money to people getting shitty degrees.

It would protect the lender and the borrower. New standards. No we will not loan you $X per year to get a gender studies degree because we won't get paid back. If you want to pay out of pocket for a worthless degree, then fine. But if the taxpayers are on the hook, shouldn't we demand value for money?
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Old 05-11-2020, 07:02 AM
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Making student debt dischargeable is essentially ensuring that nobody will get a student loan without security. Your parents will have to take out a second mortgage or something. If they can't, or won't do that, well, sux to be you.

This would do more to put downward pressure on university costs than fiddling with bankruptcy. The university has already collected its fees - what do they care if the bank gets stiffed? Whereas if the average student can't pay $50K a year by working a job during college, then either the university can defer the tuition until after graduation, and take their chances on getting paid, or make tuition affordable.

Encouraging people to borrow money they couldn't pay back is how we got the last recession.

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Shodan
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Old 05-11-2020, 07:22 AM
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I've heard that, but is that necessarily true? After you graduate, you are probably looking to get married, start my adult life, buy a house, buy a car. You can't buy those things if your credit is in the dumps.

Further, bankruptcy cases have trustees that oversee this stuff. If a person graduates, get a good job, and just wants to declare bankruptcy to shed the student loan debt, the trustee should look at the petition and say, "You are not bankrupt. You can easily make student loan payments with your salary. I'm recommending a dismissal of this case."
If you're a student with $120k or more of student loan debt then graduating and immediately declaring bankruptcy is basically getting paid $120k (or more) for your first year out of school, not including interest payments. It would definitely make economic sense to put off that entry level job for a year or two while you go through the bankruptcy proceeding and have the debt discharged.

Taxpayers (I don't think private student loans are a big part of the market) just lent a huge amount of money to someone with no assets, possibly no job, possibly no job experience, just a promise to pay and a claim on their future income stream.

Think about it this way -- you're the ultimate shareholder in yourself. You currently have no assets to speak of, and the law says you can essentially earn $120k or more, plus interest, by declaring bankruptcy -- it would be wrong to your shareholder not to do the right economic thing.

"But employers look at your credit history" -- yeah, well a few years into this, most of those employers would have done the same thing. They would be crazy not to.

Credit card companies don't give you a $120k credit line when you're right out of school. Banks don't give you a $120k mortgage, unless you have collateral (the house) worth 1.25x that amount at least.

So, allowing student loan debt to be dischargeable would be tantamount to making that part of college free.

I could see making it dischargeable if you were making payments for at least 10 years or something -- I could imagine an economic disaster happening in your 30s and you have to declare bankruptcy then, when you presumably have more to lose. But, you have to have been making payments all along, of course.

Note, I'm not saying that college is or isn't too cheap or should or should not be free, because those things are for another thread. But, if you have a student loan system, I think making those loans immediately dischargeable through bankruptcy is a mistake.
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Old 05-11-2020, 07:58 AM
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The only reason that student loans are not dischargeable is because the lien holder is the federal government.

If it were dischargeable, there would be a lot less people going to college because a lot less people would be getting loans.
OR, College would be a lot less costly.

Take your pick.

Maybe these loans instead of no payments during them should be like interest only loans until graduation and then a balloon payment (or refinance). At least this gives agency to the person taking out the loans to begin paying it back and lets them know just how much they are borrowing...

Last edited by Kearsen1; 05-11-2020 at 08:00 AM.
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Old 05-11-2020, 09:25 AM
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This would do more to put downward pressure on university costs than fiddling with bankruptcy. The university has already collected its fees - what do they care if the bank gets stiffed? Whereas if the average student can't pay $50K a year by working a job during college, then either the university can defer the tuition until after graduation, and take their chances on getting paid, or make tuition affordable.
On first pass, some way to get colleges to have more skin in the game does seem desirable.
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Old 05-11-2020, 10:12 AM
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On first pass, some way to get colleges to have more skin in the game does seem desirable.
I tend to think that there needs to be more oversight in the granting of loans; on one hand, it's probably eminently desirable for a lender to loan a Harvard MBA student as much money as they need, but there's got to be considerably more risk to loaning half or even a quarter of that amount to someone studying some sort of fluff liberal arts at a state university.

But, AFAIK/AFAIR, there's no actual inquiry into what you're studying, where you plan to live, what your plan is, what the job market is like in that field, etc... I suppose since Uncle Sam is holding the lien, neither the banks nor the schools care.

Of course, we also don't want to slowly turn our college system into one where we use public funds to subsidize engineering/science/tech/business stuff, and leave liberal arts to the people wealthy enough to study it without student loans either.

I'm not sure how you handle this; I do think there are a lot of people going to college and studying stuff that's not actually going to result in any sort of career in that field, nor any sort of enhanced career prospects either. In other words, they might have been better off doing trade school, or enlisting in the military, or something else more career-focused.

But at the same time, there are people who might be bang-up guitar professors, or English lit. professors, or archaeologists, who can't otherwise go to college without financial aid/loans.

I'd think they'd need to apply some analysis to the loans w.r.t. major, part of the country, school/tuition amount, etc... and see what shakes out. Maybe there's some salient feature of people who would be good candidates for subsidies, versus those who just suck up loan money and then gripe about it on Reddit while working as a barista while having a BA in Gender Studies from Swarthmore or some such.
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Old 05-11-2020, 10:26 AM
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I tend to think that there needs to be more oversight in the granting of loans; on one hand, it's probably eminently desirable for a lender to loan a Harvard MBA student as much money as they need, but there's got to be considerably more risk to loaning half or even a quarter of that amount to someone studying some sort of fluff liberal arts at a state university.

But, AFAIK/AFAIR, there's no actual inquiry into what you're studying, where you plan to live, what your plan is, what the job market is like in that field, etc... I suppose since Uncle Sam is holding the lien, neither the banks nor the schools care.

Of course, we also don't want to slowly turn our college system into one where we use public funds to subsidize engineering/science/tech/business stuff, and leave liberal arts to the people wealthy enough to study it without student loans either.

I'm not sure how you handle this; I do think there are a lot of people going to college and studying stuff that's not actually going to result in any sort of career in that field, nor any sort of enhanced career prospects either. In other words, they might have been better off doing trade school, or enlisting in the military, or something else more career-focused.

But at the same time, there are people who might be bang-up guitar professors, or English lit. professors, or archaeologists, who can't otherwise go to college without financial aid/loans.

I'd think they'd need to apply some analysis to the loans w.r.t. major, part of the country, school/tuition amount, etc... and see what shakes out. Maybe there's some salient feature of people who would be good candidates for subsidies, versus those who just suck up loan money and then gripe about it on Reddit while working as a barista while having a BA in Gender Studies from Swarthmore or some such.
Another issue would be students changing majors after a year or two. If someone starts out as an engineer and switches to sociology their sophomore year do the terms of their loan change?
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Old 05-11-2020, 11:13 AM
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If a person graduates, get a good job, and just wants to declare bankruptcy to shed the student loan debt, the trustee should look at the petition and say, "You are not bankrupt. You can easily make student loan payments with your salary. I'm recommending a dismissal of this case."
If I want to game the system, I just work at McDonalds and say I've been unable to find suitable employment to meet my basic needs and pay off student loans. This would be a very convincing ruse in recessionary times.

I favor this because I favor free student education, and you're proposing a system that is easy to game. But really, if you want to put the government in the position of deciding who has means to pay for basic needs and who doesn't, why not just skip all those intermediate steps and use higher marginal taxation to take money from those who obviously benefitted a lot from their education, and directly fund people who need tuition money right now?

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Old 05-11-2020, 11:37 AM
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And at the risk of opening another line of debate, perhaps the trustee's role would provide information to the student loan industry. If he/she looks at the petition and says "Yes, you took out $120k in student loans, got a degree in basket weaving and now can only make a salary of $30k so you are bankrupt and cannot make these payments" then perhaps these court cases would inform the industry not to loan so much money to people getting shitty degrees.

It would protect the lender and the borrower. New standards. No we will not loan you $X per year to get a gender studies degree because we won't get paid back. If you want to pay out of pocket for a worthless degree, then fine. But if the taxpayers are on the hook, shouldn't we demand value for money?
I also think that the lenders should have some risk so they are more prudent when making the loans. This would also mean students would need do more to show that the loans would be paid back. However, I think that there should be a sliding scale as to what could be discharged. For example:

- First $20,000: Not dischargeable
- Next $20,000: Dischargeable after 15 years
- Next $20,000: Dischargeable after 13 years
- Next $20,000: Dischargeable after 11 years
...

The low-level loans are not dischargeable and the banks can be more certain to get those back. Those would be easier for students to get. But the more that is loaned out, the riskier that money becomes. The banks would put more thought into who they loaned money to. The higher loans would have a higher interest rate, so students would need to be more careful and thoughtful about taking out loans. And then if it doesn't work out, the student can declare bankruptcy and have some of the loans discharged. This would put some natural market pressure on students and bankers to rein in excessive student loans that are unlikely to be paid back.

Last edited by filmore; 05-11-2020 at 11:37 AM.
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Old 05-11-2020, 11:41 AM
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The collateral for a student loan is future earnings, not current assets.

I'm not lending you money because you have a really good job, or you have a valuable house, I'm lending you money because you will invest that money in an asset (yourself) that will provide long term income.

Allowing people to bankruptcy it away means they get to invest the borrowed money into the asset, falsely downgrade the asset to $0 value, eliminate the debt, then use the asset for long term income once the coast is clear. It creates a perverse incentive to game the system, with benefits well into the 6 figure range.

As much as I usually stand up for the little guy, this is a bad idea.
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Old 05-11-2020, 12:30 PM
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Of course, we also don't want to slowly turn our college system into one where we use public funds to subsidize engineering/science/tech/business stuff, and leave liberal arts to the people wealthy enough to study it without student loans either.
Why don't we want this? I do.
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Old 05-11-2020, 12:37 PM
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Have you seen the interest rates on other non-collateralized debt, like credit cards? So instead of students paying like 4% now, they would pay like 15%+. For the ones who get them. Many just never would be able to.
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Old 05-11-2020, 12:52 PM
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Why don't we want this? I do.
And more generally, that we subsidize education for those who, on average, will pay more in taxes to make up the difference, vs. those who, on average, don't.

What we don't want, or I don't want, is to offload the risk of lending money to people who won't pay it back.

I suppose one could make a case that an education in liberal arts/communications/gender studies/underwater basket weaving makes the student a better person in ways that can't be measured in money. I've never seen such a case made, but I suppose it could be done. Asserted, yes, made, no.

It has to be quite a strong case - "give this person $80K and take my word for it that everyone will be better off" doesn't cut it, IMO. You would actually have to show me how everyone is better off, and especially how everyone would be better off than if I got to keep the money and spend it on things that I know will make me better off.

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Shodan
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Old 05-11-2020, 12:54 PM
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Have you seen the interest rates on other non-collateralized debt, like credit cards? So instead of students paying like 4% now, they would pay like 15%+. For the ones who get them. Many just never would be able to.
Yes. Lenders have to charge higher interest on unsecured debt, because it is unsecured. So if the borrower defaults, there's nothing to go after to collect any part of the debt.

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Old 05-11-2020, 01:20 PM
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On first pass, some way to get colleges to have more skin in the game does seem desirable.
I found this Planet Money episode to be intriguing - the concept was that a college would cover tuition for a student in exchange for a % of their future earnings (up to a certain point) - it was similar to the student "selling stock" in themselves to the college. This definitely ensured that the college had a vested interest in making sure the student was successful in the future. I'd like to see more universities and colleges offer this type of financial aid, but not sure if it should go any further than something that schools voluntarily take on themselves.
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Old 05-11-2020, 01:54 PM
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Why don't we want this? I do.
For one obvious thing, there are certainly plenty of lower-income (i.e. not able to pay out-of-hand for a liberal arts education) people who might be terrific English literature professors, music professors, artists, archaeologists, psychologists, sociologists, etc...

Why should some half-assed student get a loan to go study computer science or some other tech field, and a good student gets told to pound sand because they want to study political science? It's entirely possible that the cs student may drop out and end up a cable monkey or help desk tech, and the political science student might end up a tenured professor.

I mean, it's fine and dandy for the wealthy to fund whatever they want for their children's educations, but it's not fair to expect non-wealthy people's children to only get help if they want to do what would amount to a sort of trade school.
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Old 05-11-2020, 02:11 PM
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The idea of giving a loan for a percentage of later income has been around for a long time, at least since I was in college -- as I said a long time. There were different plans. Most had caps. Some grouped a class together and each in the plan paid a percentage of their own income until the entire class was paid off or until a student paid 10% (or some number I don't recall) more than his or her own debt plus interest. I was pretty sure this was called the Princeton Plan. But there are too many different Princeton Plans it seems.

In any case it proved unpopular and those who planned to go into higher income careers opted for regular loans, as might have been expected.
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Old 05-11-2020, 02:14 PM
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What we don't want, or I don't want, is to offload the risk of lending money to people who won't pay it back.

I suppose one could make a case that an education in liberal arts/communications/gender studies/underwater basket weaving makes the student a better person in ways that can't be measured in money. I've never seen such a case made, but I suppose it could be done. Asserted, yes, made, no.
My team hires plenty of liberal arts majors. It's not as if the sole purpose or value in a degree in X is to have a career in X. Nobody majors in "consulting", yet my company somehow exists. Liberal arts majors do have a somewhat higher default risk than STEM majors, but it's smaller than the difference between any student at a selective school vs a less selective school. So I suspect a large component of that is selection bias.

And the spreads on compensation are huge. Yes, the median comms major makes less than the median chemE major, but there are still plenty of comms majors making more them chemE majors. And not everyone is good at engineering. And I'd make a shitty member of the communications team that we offer to clients.
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Old 05-11-2020, 02:16 PM
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Yeah, this is a tough one.

One the one hand, you dont want young people to run up $100K in student loans, graduate, not get a job first year, then discharge. Especially as often those student loans are for a bogus learning institution, like trump univ.

However, if defrauded, yes, dischargable- https://www.npr.org/2019/11/14/77946...rofit-colleges


OTOH- you dont want liberal arts students buried under debt that they cant repay.

First of all, let us make community college free- maybe a $25 registration fee, but basically free. So, not only can you knock off your bonehead english and other Frosh and Soph classes, you could instead take trade classes, such as nursing. In several states, such as CA it is free like that.

Subsidies for middle and lower income students for the next two years- only at not for profit colleges, like Cal State. You want to go to USC? Fine, pay for it. Otherwise, UCLA.

Then make student debt dischargeable after ten years.
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Old 05-11-2020, 02:20 PM
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The whole student loan crisis is somewhat overblown anyway, as it's skewed by people who took out big money for, say medical school. Although while yes, it's possible to borrow $100k for undergrad or for an MFA in puppetry, these aren't the norm. So I guess the question is, what role should schools, the government, or the banks play in telling people they can't borrow the money? I don't feel I have a thoroughly thought-out answer for that.

Everyone should keep in mind that a huge number of people enroll in college and are never finish. So it's not like everyone is even getting the value of a diploma out of it.
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Old 05-11-2020, 03:19 PM
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...

Everyone should keep in mind that a huge number of people enroll in college and are never finish. So it's not like everyone is even getting the value of a diploma out of it.
Yes, true, and that is another reason they should go to a 2 year college first. One freind of mine went to the same community college as i did, hated her liberal art classes, but hung out with the nursing students (90% women back then) who told her she could get a two year nursing cert and walk out with into a room full of job offers. She got her LVN, and indeed, got those offers. First year was tough, they made the new nurse do a lot of scut work, but she was making really good money, ( with shift differential ) , and later got nicer and nicer work, including RN.

In CA, starting salary for LVN can be $50K after only two years of college (can be less at a specialized nursing school).

You can get quite a few certs after only two years, leading to quite a number of high demand jobs. Criminal science for instance.
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Old 05-11-2020, 03:55 PM
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The government made one of the biggest mistakes by guaranteeing student loans. Their intention was to make financing of college debt easier and allow more people to go to college. They did not have the foresight to see the unintended consequences of their actions. If those in charge of the decision had gone to college and studied finance and economics they hopefully would have seen the consequences of their proposed actions and taken a difference course of action.

As the financing of student loans became easier, more and more people applied and enrolled in colleges and universities. These institutions saw huge increases in demand for their product, so what did they do? They raised tuition. It's what you do when you have limited capacity and growing demand, you raise the price, it's a matter of simple economics. Even non-profit universities like to add to their endowments with budget surpluses. And students accepted the higher prices because the Federal government was guaranteeing their loans.

You can't fix the past, but you can fix the future. The government should STOP guaranteeing student loans. Those that already have loans that cannot pay according to current payment schedules, should have their loans adjusted, re-worked, etc. etc., so they can pay under longer terms, etc.

If the Federal government wants to see tuition decline, making the cost of getting a college degree more affordable, then they should begin making grants to state universities across the country to expand their campuses, allowing them to hire more professors, etc. As the supply increases, then tuition rates will decline, to draw more students to fill up the classrooms, dorms, etc. Again, a simple economic principal at work.
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Old 05-11-2020, 03:59 PM
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I think the best way to make college more affordable is to make college less expensive, not hiding the true cost of college behind student loans. Any time you shield the end-customer from the true cost of something and insert someone in the middle you can expect the amounts being charged to soar (car loans, home loans, health insurance, college loans). As said, colleges get their tuition and don't care what happens between the student and the middleman - a good recipe for escalating costs and letting someone else take the risk. If colleges were pricing directly to their customers I would think they would be offering more competitive costs.

I agree with others here that using bankruptcy to get rid of student loans would result in a lot of young people finishing school and then just declaring bankruptcy.
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Old 05-11-2020, 03:59 PM
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So I guess the question is, what role should schools, the government, or the banks play in telling people they can't borrow the money? I don't feel I have a thoroughly thought-out answer for that.
The government doesn't have a role in telling people that can't take out loans, but the reason those loans are so available is because the lender/underwriter, is looking to the federal government guarantee if that borrower defaults. So the government can stop providing guarantees, and the loan availability will significantly decline.
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Old 05-11-2020, 05:41 PM
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All responses have been very good and I guess I would have to think about it. What about a modified proposal that you have to wait 10 years before a bankruptcy discharge of these loans? Would we have the same problem? Just people waiting until they are 32 and discharging the loans?

But the more I think about it, the colleges and the lenders need to be held somewhat to account. The bankruptcy laws are there to give debtors a fresh start. No need for a mistake that you made at 18 (and I mean a simple financial one, not where you murdered someone) to haunt you the rest of your adult life.

And even short of outright fraud, those college recruiters do misstate the evidence. They will tell an 18 year old that just barely qualified to get into college in the first place that getting a communications degree will lead to good job opportunities and they will cite their cherry picked statistics to "prove" it. Further, many posters have made great points. The reason college is so expensive and continues to become more expensive is because of the availability of these loans.

I guess I would like a more focused system. With lenders and colleges responsible you would see fewer loans. Sure, you have a bright kid from the inner city that studies show will make a great doctor, engineer, or lawyer, but he just can't afford tuition? Then we help him out. We see that investing in this kid will make him a productive member of society. I'm all for that. The kid gets a good career, the college gets tuition money, and the lender makes money on the loan. Win, win, win.

But some kid jerking around just going to college to see how much beer he can drink? No, as a lender I'm not investing in that. You have to show me a plan where this degree will allow you to pay me back. If not, then I'm not paying for USC, I'm paying for trade school, or something else. And as harsh as it may sound, if I'm a lender and I see that this kid barely qualified for law school, will likely graduate near the bottom of his class, and have a hard time getting any legal job at all, why should we invest in that? Don't fall for the Peter Principle. Tell the kid that as far as your money is concerned, he needs to pick something else.
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Old 05-11-2020, 05:43 PM
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Old 05-11-2020, 05:55 PM
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Why not let the college loan the money directly to the student, and have the student pay back the college directly? Leave out the middle man lender. Right now, the college will always get their money, but the risk lies with the bank and ultimately with the student.

If the college shared more in the risk, they would ensure they are loaning money to students with decent prospects and ensure resources are in place to enhance that student's every ability to succeed, in whatever major. If the student was unable to get a job to pay-off the college, well, they could take a job with the school and pay them off that way. Shared risk without the profit motive provided by the banks (and the colleges).
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Old 05-11-2020, 06:08 PM
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It's going to be difficult to go back. Loans have made more people able to go to college. Colleges compete for students by having nicer dorm rooms, nicer student unions, etc. All that costs money. If you eliminate student loans or make colleges finance them, tuition will have to go up more to cover that cost, plus the cost of the "bankers" hired to assess students ability to pay.
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Old 05-11-2020, 06:21 PM
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I guess I would like a more focused system. With lenders and colleges responsible you would see fewer loans.
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Why not let the college loan the money directly to the student, and have the student pay back the college directly? Leave out the middle man lender. Right now, the college will always get their money, but the risk lies with the bank and ultimately with the student.

If the college shared more in the risk, they would ensure they are loaning money to students with decent prospects and ensure resources are in place to enhance that student's every ability to succeed, in whatever major. If the student was unable to get a job to pay-off the college, well, they could take a job with the school and pay them off that way. Shared risk without the profit motive provided by the banks (and the colleges).
Right now with the majority of the loans guaranteed by the government, there is no need to underwrite the debt by the college or the lender. It is the government guarantee that the lender is looking towards. The government guarantee is what got us in this situation.

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If you eliminate student loans or make colleges finance them, tuition will have to go up more to cover that cost, plus the cost of the "bankers" hired to assess students ability to pay.
If you get rid of the guarantee, then lenders will be more discriminating on who they make loans to. And the number of applicants will go down, as many people will not be able to qualify for such loans or they will carry such high interest rates, that no one will want to borrow.

Tuition will not go up, it will come down.
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Old 05-11-2020, 06:46 PM
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I guess the main issue is that everyone agrees that the system is broken, but every solution touches a live electrical wire that makes it a non-starter. Suppose, for example, that I proposed that a gender studies major not be eligible for federal loans. Well, the left would come out of the woods with pitchforks saying that I just wanted to impose my conservative agenda on students and there would be studies showing how a better appreciation for gender has untold economic benefits, etc. so I just say fuck it and live to fight on a different hill.

I think I have posted this before, but the tuition increases are frankly massive and completely outpace inflation. I live in WV and the tuition at state schools are all the same and set by the state. My father started college in 1968. His tuition was $154 per semester. I started in 1994 and my tuition was $903.40 per semester. My daughter starts in 2021 and tuition this year (2020) is $4,423 per semester.

If you plug that into an inflation calculator, basing it from 1968 dollars, my tuition in 1994 should have been $657.25 and in 2019 it should be $1147.51.

If you take my tuition from 1994 and inflate it to 2019 dollars, it should be $1577.54.

What in the hell are they spending that increased tuition on? You could plate the classrooms in gold leaf and still not justify the extra money.
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Old 05-11-2020, 07:02 PM
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Not everything aligns with inflation.

Maybe they should teach that in school.
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Old 05-11-2020, 07:09 PM
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What in the hell are they spending that increased tuition on?
We've had threads on this in the past. See, for example, Why does College Tuition out-pace inflation ?, especially Fretful Porpentine's excellent Post #4 in that thread.

Note that colleges and universities come in many different types, sizes, missions, levels of solvency, and tuition rates, so that what is true of some is not necessarily true of others.

Last edited by Thudlow Boink; 05-11-2020 at 07:11 PM.
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Old 05-11-2020, 07:10 PM
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Not everything aligns with inflation.

Maybe they should teach that in school.
Of course not. But it shouldn't be so wildly out of pace with it when their basic mission is the same. Have students come into a classroom and teach them things.

I could see your point if her tuition was $1,900 and I'm here complaining about why it should be $1,500 or $1,100. But this is orders of magnitude different, and I really don't see any possible reason.
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Old 05-11-2020, 07:41 PM
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I guess the main issue is that everyone agrees that the system is broken, but every solution touches a live electrical wire that makes it a non-starter. Suppose, for example, that I proposed that a gender studies major not be eligible for federal loans. Well, the left would come out of the woods with pitchforks saying that I just wanted to impose my conservative agenda on students and there would be studies showing how a better appreciation for gender has untold economic benefits, etc. so I just say fuck it and live to fight on a different hill.
....
I don't know why you have to drop this partisan bomb into your own thread, but just picking the first two cites for gender studies salary and mechanical engineer salary, I get this:

$75k/year for gender studies: https://datausa.io/profile/cip/050207/

$70k/year for mechanical engineering: https://www.payscale.com/research/US...ngineer/Salary

Since I had an approved major of electrical engineering I can do math, and I find that MEs seem to make less, on average, than gender studies majors according to those cites. I can't vouch for either one, I just picked the first one that showed up in a search for gender studies salary and mechanical engineering salary.

On the gender studies site, it says:

Quote:
... the most common occupations are Elementary & middle school teachers, Postsecondary teachers, and Lawyers, & judges, magistrates, & other judicial workers.
I know, I know, those who can, do, and those who can't, teach, and screw the next generation, but whoa, what's that? They become lawyers and judges, etc., too!! Why, I think you might be a lawyer.
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Old 05-11-2020, 08:51 PM
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All responses have been very good and I guess I would have to think about it. What about a modified proposal that you have to wait 10 years before a bankruptcy discharge of these loans? Would we have the same problem? Just people waiting until they are 32 and discharging the loans?

But the more I think about it, the colleges and the lenders need to be held somewhat to account. ....
Yes, I concur, 10 years should work.


No more Federally insured student loans for at profit colleges will fix that.
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Old 05-11-2020, 09:42 PM
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Yes, I concur, 10 years should work.


No more Federally insured student loans for at profit colleges will fix that.
Exactly so. In a nutshell, the current system socializes the risk (the government = all of us backing those loans), and privatizes the benefits (colleges get to keep tuition, banks get to keep the interest on the loans).
  #40  
Old 05-12-2020, 08:59 AM
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Yeah, this is a tough one.

One the one hand, you dont want young people to run up $100K in student loans, graduate, not get a job first year, then discharge. Especially as often those student loans are for a bogus learning institution, like trump univ.

However, if defrauded, yes, dischargable- https://www.npr.org/2019/11/14/77946...rofit-colleges


OTOH- you dont want liberal arts students buried under debt that they cant repay.

First of all, let us make community college free- maybe a $25 registration fee, but basically free. So, not only can you knock off your bonehead english and other Frosh and Soph classes, you could instead take trade classes, such as nursing. In several states, such as CA it is free like that.

Subsidies for middle and lower income students for the next two years- only at not for profit colleges, like Cal State. You want to go to USC? Fine, pay for it. Otherwise, UCLA.

Then make student debt dischargeable after ten years.
Why wouldn't we just get rid of those bonehead studies?
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Old 05-12-2020, 10:05 AM
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What in the hell are they spending that increased tuition on? You could plate the classrooms in gold leaf and still not justify the extra money.
Tour some campuses and you'll see that they have been massively upgraded from what they were in the past. College campuses in the 80's were more basic and functional. But when colleges started competing for student tuition dollars, they had to upgrade their campus to stay competitive. Now campuses have extensive recreation facilities with things like rock walls and spas. The food at the dining hall is much better than the typical cafeteria mystery casseroles. The classrooms are upgraded with modern technology instead of a room with a bunch of cheap desks. Dorms are upgraded. All those kinds of upgrades cost money. When students are looking for the best college experience, those superficial upgrades are often a major part of their decision.

But that is something that students need to be more thoughtful about from a cost perspective. The actual education is not necessarily going to better at a campus which is like a country club. If a student is taking out massive loans to go to an expensive school with a high-cost campus, that's not necessarily a good use of the money.
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Old 05-12-2020, 10:26 AM
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I know, I know, those who can, do, and those who can't, teach, and screw the next generation, but whoa, what's that? They become lawyers and judges, etc., too!! Why, I think you might be a lawyer.
Note that per your first link, the most common jobs (in order) for Women's studies majors are elementary school teachers, college teachers, lawyers, managers, and educational administrators, almost all of which require additional education/degrees or significant job experience.

The average wage of an entry level elementary school teacher (again, requires additional training/education beyond just a bachelors in women's studies) per your second link is $39k.

The average wage of a entry level mech engineer (typically with just a BS in Mech Eng, straight out of college) is $62k.
  #43  
Old 05-12-2020, 11:08 AM
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As an employee of an online university that charges far less for tuition than these gold-plated state universities and Ivy Leagues (thus making me a biased source,) I'm hoping this pandemic inflicts major damage on the $50,000-a-year Harvard Model and forces America to finally confront the overpriced higher education issue once and for all.

Almost anything you can learn about history, literature, social sciences, accounting, economics, business, etc. in a traditional classroom, you can learn online. Sure, something like biochemistry, medicine or things that require hands-on work in a lab would be difficult or impossible. But there is no reason people must spend $120,000 on an economics degree from Stanford when they could get it for one-fourth of that at a fully-accredited online university.

Not all online schools are good, of course. But it's time that all of America gave it a hard serious look.
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Old 05-12-2020, 11:14 AM
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As an employee of an online university that charges far less for tuition than these gold-plated state universities and Ivy Leagues (thus making me a biased source,) I'm hoping this pandemic inflicts major damage on the $50,000-a-year Harvard Model and forces America to finally confront the overpriced higher education issue once and for all.

Almost anything you can learn about history, literature, social sciences, accounting, economics, business, etc. in a traditional classroom, you can learn online. Sure, something like biochemistry, medicine or things that require hands-on work in a lab would be difficult or impossible. But there is no reason people must spend $120,000 on an economics degree from Stanford when they could get it for one-fourth of that at a fully-accredited online university.

Not all online schools are good, of course. But it's time that all of America gave it a hard serious look.
Yes, but the cachet of a degree from Stanford will open more doors for you, than a degree from Southern New Hampshire University.
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Old 05-12-2020, 11:22 AM
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It's called networking and developing relationships with other human beings.
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Old 05-12-2020, 11:23 AM
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No more Federally insured student loans for at profit colleges will fix that.
For profit colleges are on the decline. Enrollment at for profit colleges in the US peaked in 2010 at about 2 million students, that has dropped to just over a million in 10 years. Yes, the graduation rate at for profit colleges is significantly lower compared to public and private non-profit colleges and universities. And the default rate on student loans for students at for profit universities is higher also.

But, for profit enrollment only represented about 10% in 2010 and about 5% now.

The bigger issue is that federal government guarantees about 92% of all student loans.
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Old 05-12-2020, 11:24 AM
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Note that per your first link, the most common jobs (in order) for Women's studies majors are elementary school teachers, college teachers, lawyers, managers, and educational administrators, almost all of which require additional education/degrees or significant job experience.

The average wage of an entry level elementary school teacher (again, requires additional training/education beyond just a bachelors in women's studies) per your second link is $39k.

The average wage of a entry level mech engineer (typically with just a BS in Mech Eng, straight out of college) is $62k.
Yes, Women's Studies majors actually go on to become productive members of society, teach our children, become lawyers, and so on, and are not the useless pieces of crap that people seem to imply they are in these types of discussions. Do I have that right?
  #48  
Old 05-12-2020, 12:51 PM
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Yes, Women's Studies majors actually go on to become productive members of society, teach our children, become lawyers, and so on, and are not the useless pieces of crap that people seem to imply they are in these types of discussions. Do I have that right?
Nobody is saying that women's studies majors are "useless pieces of crap." What I did say (and you sort of proved my point) is that any discussion on how to improve this is riddled with land mines.

But your cites do illustrate my point. Why would a person invest $30k to $40k for a degree which gets you an average salary of $39k per year? Would you advise your kid or your niece or nephew to take that deal? I wouldn't. And it has nothing to do with the political aspect of it, so just imagine that the degree is something else.

If it was anything else in society, people would be outraged at the return on such an investment and would likely want to prevent the university from taking peoples' money for such a thing, let alone subsidizing it themselves. But for some reason, we can't even start there or start anywhere, even though there is universal agreement that the system is broken and has been that way for a long time.

Another issue is the "degree bloat." A hundred years ago a high school degree was a nice accomplishment. Fifty years ago the same with a bachelor's degree. Anymore a bachelor's is just a stepping stone to a graduate degree. Is there any real need for a middle class office worker to have a total of 16 to 18 years of schooling? Why not condense it in a sort of job training?

I know the whole thing about having a "well rounded education" and being able to talk about history or literature or statistics when the topic comes up, but is it really worth it to a person when everything is taken into account? Would you rather not be $50k in debt yet not be able to talk about Shakespeare? Further, it seems that if a topic interests you, you learn on your own. I've learned far more about history, for example, because of my own interest in it and not from classroom learning.

It just seems to me that there is way too much inertia in this. Someone decided that if we loan everyone money for college that everyone would go to college and everyone would have good jobs and make a lot of money. Of course that is silly and its time for a massive change I think.
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Old 05-12-2020, 12:54 PM
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You listed it in the same breath as basket weaving, so you clearly meant to make it insulting.
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Old 05-12-2020, 12:56 PM
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Oops that was Shodan not you
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