The fact that you call this a “student loan plan” is part of the problem, though. The people who would put the money into this scheme would only do so if they thought they could earn a good return, this would be an “investment opportunity” for the creditors as much as a loan plan for the students.
It’s like a TV infomercial. “Take advantage of this amazing offer”; they say that to make you think about what you’re getting out of the deal. They want to sound generous. They don’t want you to think about what they’re getting or you’d realize that you have some bargaining power to bring to the table.
And people don’t offer house loans if they don’t think they’re going to make money. That doesn’t make taking out a mortgage in any way equivalent to indentured servitude.
Well, that all depends on who’s offering the loan. If their name is something like Lugnut Tony and they make it damn sure you’re not going to be able to pay back the principal, only the ever compounding interest… Not that I’d dare equate the practices of bankers or venture capitalists with those of the mob. The mob has much better fashion sense, for one thing.
I’d say it’s about as sinister as payday loans or appliances sold with a fifty thousand instalments plan. So, kind of a lot, and preying on a combination of immediate poverty and questionable financial insight/future planning on the part of the recipient of such “good deals”. Provided you amount to anything after college (e.g. you didn’t major in sociology or somesuch*) that scheme would have you paying back a whole lot more than the loan & its interests were ever worth, or what you’d pay in the current system.
Of course, you could always game the system and opt to flip burgers for the next 15 years ! That’ll learn 'em !
I kid on my fellow social sciences majors. I know we’ll rake in the big bucks when that thesis on sleep patterns and the disruption thereof in 15th century Piedmont gets published !
There are enough actual stupid Republican ideas. More than enough. There’s no need to take any proposal put forward by any Republican, no matter how vague, and then point out that if that proposal were being implemented by THE MAFIA it would be a bad idea.
Yes, clearly if you sign up for this plan (again with the caveat that we don’t actually know any details) and then graduate from college and immediately become super-rich, you’ll end up paying more than you would have via a normal student loan. And if you don’t, you will end up paying much less. In other words, under this plan, the burden for paying back student loans would be paid disproportionately by the wealthy. Isn’t that the kind of thing that we liberals are usually strongly in favor of?
We’re in favour of it when that which is paid disproportionately by the wealthy benefits the less-than-wealthy, or society at large. Not strictly the already-wealthy-enough to subsidize student tuitions on a large scale.
Purveyors of “high quality audio cables” at 500 bucks a pop for a length of copper also profit disproportionately from the wealthy and their mental issues, but I’m not about to call them efficient tools of social justice.
Yes, and as described, this plan would massively benefit the less than wealthy, in that you could go to college, and then go get some not particularly lucrative job, like being a high school teacher, and then end up paying much less money to pay off your student loans than would be currently required.
Obviously if there’s some rider in the contract that says “oh, and if you would end up paying less than the initial value, then your’e still on the hook” then no one would ever sign up for this plan in the first place, because you’d end up either the same as current student loans, or worse. In order for it to make sense, it must be the case that some people end up paying less than in the current system, and some end up paying more, but no one ends up trying to survive on a low-to-middle-income while still paying off crippling, fixed student debts.
And yes, of course, if every detail is designed by predatory lenders and asocial monsters, it will end up being a terrible and evil plan. But that’s true of everything.
I’ve heard liberals supporting this kind of plan. On the surface, it makes sense but I have to wonder about who could get these kinds of loans.
It strikes me that banks would be eager to invest in things like medical and law degrees. Those people could get generous loans at relatively lower rates. English majors, math majors, etc. could find it more difficult.
If it’s the government making the loans at a set rate for everyone, based solely on academic qualifications and not on the choice of major, then it might be a good idea. Politically of course, there’d be a lot of grousing about wasting tax dollars on basket weaving majors (not that there is such a thing), so it’d be difficult to pass.
Or, you know, the government could go back to significantly subsidizing the cost of public universities. An educated electorate (and work force) is a public good, and I have no problem with my tax dollars supporting it as such.