College= the only way to success has to be one of the biggest almost successful predatory marketing campaigns. The government, colleges and banks all make money at the expense of truly misinformed kids who don’t have family money. Although I believe the court’s decision is the correct and only one, this predatory snow job has to be stopped and bankruptcy 100% absolutely has to be put back into the equation.
Why do “we” (those who didn’t go to college, those who didn’t take out student loans, and those who paid off their student loans) have to resolve others’ outstanding debt? How is that not a moral hazard?
Actions have consequences.
Maybe lower the interest rate. But do not place the burden of stupid decisions on those who didn’t make those..
66% of student loan borrowers are in arrears, and between 7% and 10% are in default.
These are debts owed directly to the government that are not being collected and may prove to be uncollectible. Conservatively, this is already a sum in the hundreds of billions of dollars.
The moral hazard arguments are substantive and absolutely deserve consideration, but, moral hazard or no, what should the government do when a debt is uncollectible?
If we don't want to just write the debt off (which is what debt forgiveness is), what do we do?
(The moral hazard arguments cut the other way as well, or would if these were debts to private lenders. With no due diligence and poor oversight of the loan programs, many if not most of these loans should never have been made. A reckless creditor should not be shielded from the consequences of their recklessness any more than a reckless borrower.)
I've actually suggested that in other discussion threads on this topic. That is one approach that reconciles all the moral hazard concerns and incents colleges to come down on their tuition (which skyrocketed after the government began making the loans directly).
Here is the thing, at this point, if you go to college and take this debt on without a plan to make a lot of money in a career (STEM), with the last five years of news and coverage, then you're a complete fool.
Socialize the losses while privatizing the profits.
And do not do anything until the problem is so huge it can't and won't be handled by anyone other than government, which refuses to admit their mistakes, CRT graduates have little future except in said government.
Good article. If anything is slashed, it should be egregious compounding interest first. And let student loans be dischargeable in bankruptcy. And perhaps must importantly, reduce direct fed government lending so that schools have less incentive to raise their prices.
Good piece. You might be interested in this analysis re: the Supreme Court decision: https://open.substack.com/pub/lononaut/p/department-of-education-vs-myra-brown?utm_campaign=post&utm_medium=web
College= the only way to success has to be one of the biggest almost successful predatory marketing campaigns. The government, colleges and banks all make money at the expense of truly misinformed kids who don’t have family money. Although I believe the court’s decision is the correct and only one, this predatory snow job has to be stopped and bankruptcy 100% absolutely has to be put back into the equation.
*most. Not almost.
From el gato malo:
here's an idea: let's get the government out of lending entirely.
1. it's unconstitutional
2. it's a massive and needless subsidy program that has zero pareto constraint.
3. it's the biggest cause of the tuition price spiral.
the whole program was a terrible idea.
No argument there.
We still have to resolve $1.77 Trillion out outstanding loans already made. Declaring them unconstitutionally made doesn't make them go away.
Why do “we” (those who didn’t go to college, those who didn’t take out student loans, and those who paid off their student loans) have to resolve others’ outstanding debt? How is that not a moral hazard?
Actions have consequences.
Maybe lower the interest rate. But do not place the burden of stupid decisions on those who didn’t make those..
66% of student loan borrowers are in arrears, and between 7% and 10% are in default.
These are debts owed directly to the government that are not being collected and may prove to be uncollectible. Conservatively, this is already a sum in the hundreds of billions of dollars.
The moral hazard arguments are substantive and absolutely deserve consideration, but, moral hazard or no, what should the government do when a debt is uncollectible?
If we don't want to just write the debt off (which is what debt forgiveness is), what do we do?
(The moral hazard arguments cut the other way as well, or would if these were debts to private lenders. With no due diligence and poor oversight of the loan programs, many if not most of these loans should never have been made. A reckless creditor should not be shielded from the consequences of their recklessness any more than a reckless borrower.)
Make the over priced universities pay a large portion.
Maybe have some thing like for every $10,000 you pay back, knock off 10% of the remaining balance .
I've actually suggested that in other discussion threads on this topic. That is one approach that reconciles all the moral hazard concerns and incents colleges to come down on their tuition (which skyrocketed after the government began making the loans directly).
Here is the thing, at this point, if you go to college and take this debt on without a plan to make a lot of money in a career (STEM), with the last five years of news and coverage, then you're a complete fool.
People do need to approach education as an investment and treat it accordingly.
Socialize the losses while privatizing the profits.
And do not do anything until the problem is so huge it can't and won't be handled by anyone other than government, which refuses to admit their mistakes, CRT graduates have little future except in said government.
Good article. If anything is slashed, it should be egregious compounding interest first. And let student loans be dischargeable in bankruptcy. And perhaps must importantly, reduce direct fed government lending so that schools have less incentive to raise their prices.
Certainly letting the debts be dischargeable in bankruptcy would go a long way towards allowing the debts to be resolved.