The Federal government should have never gotten involved in Student Loans. For years, the banks did this and it was structured like a regular loan. You took it out, you used it, you paid for it. When I was in college, Pell grants and Sallie Mae did the school loans and people paid them back.
When you start giving people money for free, they'll waste it.
there should be some plan that's a little more reasonable.
Part of what's going on is that the conservative chattering class is bereft of ideas and creativity. You are offering a potential solution. But back in the pre-Obamacare era, the conservative answer was similarly: 'dont get sick' and that's a total non-starter for people with chronic diseases. It's a policy answer that ultimately is lazy and reactionary.
The conservative answer here, "pay yer bills" is similarly stupid. It also avoids any details about how stupidly the whole system is currently structured.
The grad plus loans are artificially set at 8% for no good reason. Why not let the rate float? Because then uncle sam can't make $30-50 billion per year off of grad students.
Why are student loans not priced for risk of default, like every other loan issued? A doctor's risk of default is 1000% less than a general studies degree, and yet the profile risk is treated the same. Price the risk accurately within the student loan.
And as Eugine mentioned: keep the institution on the hook for defaults.
Let people discharge the debts in bankruptcy. That little change was a Democrat priority in 2006 or so. For some reason they never have to pay any price for that handout to the banks. Make the banks accept the actual risk of issuing debt to 18 year olds by losing their shirts when people default. That will change behavior as well.
Make people put a down payment of some amount on the issuance of each loan. Again, like every other financial obligation.
Allow institutions to 'repossess' the degrees by invalidating their academic credentials upon default. Prevent people from using the academic credentials if you default on the debt. That will cause people to adjust their behaviors.
Incentivize the issuance of cheaper degrees to create price competition.
And the biggest elephant in the room possible: fix employment discrimination law so that employers can screen people without using 'college degree required' as a way to evade the chronically litigious employment applicants who game the system to prey on white collar employers who can't afford to fend off lawfare.
This regime is propped up by a thousand little decisions meant to subsidize bullshit degrees from degree mills. Change the equation and it will change the outputs.
"It’s also bizarre to see conservatives on the side of big banks and the federal government. Why is the complaint always directed at the borrower: “you took out a loan, so pay it back” and never directed at the banks: “you loaned out money to an 18-year-old who wants a gender studies degree; you’re an idiot”?"
I get the spirit of what you're saying, and I don't think government should be in the student loan business at all, but isn't this really an issue of contractual obligation? The borrower has promised to return a debt, regardless of the stupidity of the lender.
Debt is a weapon used by the Elite against the People if anyone bothered to actually read history. A nation need to have young men well-invested in the future of the state in order to have the best soldiers and workers but they won’t invest if they have no future. If they won’t invest, then the security and function, which the smug old-timers depends on for their safety and health, will disappear, leaving behind chaos which will leave them broke, sick, and fearful. So, it’s in THEIR interest to not fall back on the oafish position but to look ahead 20-30 years down the road.
I think your youthful outlook is getting the better of you. The part about the government correcting the source of the problem on their end (ending college loans) is just plain wishful thinking. Thought experiment: write the bill you would propose that eliminates government funding of individual college education and puts whatever needed restrictions on private lending for the same purpose. How far do you expect that bill to get? Out of committee?
There is also the disdainful talk of paying back what you borrowed. I'm sure you are surrounded by fellow students complaining of the debt they are going into. Do you commiserate and tell them how badly they're being treated or do you suggest they do as you did? Would I be interested in hiring an engineer who couldn't figure out how he intended to pay off the debts he made while having a great time and living the college experience?
The Federal government should have never gotten involved in Student Loans. For years, the banks did this and it was structured like a regular loan. You took it out, you used it, you paid for it. When I was in college, Pell grants and Sallie Mae did the school loans and people paid them back.
When you start giving people money for free, they'll waste it.
Colleges are no different.
nationalizing endowments = yes
outright forgiveness = no
there should be some plan that's a little more reasonable.
Part of what's going on is that the conservative chattering class is bereft of ideas and creativity. You are offering a potential solution. But back in the pre-Obamacare era, the conservative answer was similarly: 'dont get sick' and that's a total non-starter for people with chronic diseases. It's a policy answer that ultimately is lazy and reactionary.
The conservative answer here, "pay yer bills" is similarly stupid. It also avoids any details about how stupidly the whole system is currently structured.
The grad plus loans are artificially set at 8% for no good reason. Why not let the rate float? Because then uncle sam can't make $30-50 billion per year off of grad students.
Why are student loans not priced for risk of default, like every other loan issued? A doctor's risk of default is 1000% less than a general studies degree, and yet the profile risk is treated the same. Price the risk accurately within the student loan.
And as Eugine mentioned: keep the institution on the hook for defaults.
Let people discharge the debts in bankruptcy. That little change was a Democrat priority in 2006 or so. For some reason they never have to pay any price for that handout to the banks. Make the banks accept the actual risk of issuing debt to 18 year olds by losing their shirts when people default. That will change behavior as well.
Make people put a down payment of some amount on the issuance of each loan. Again, like every other financial obligation.
Allow institutions to 'repossess' the degrees by invalidating their academic credentials upon default. Prevent people from using the academic credentials if you default on the debt. That will cause people to adjust their behaviors.
Incentivize the issuance of cheaper degrees to create price competition.
And the biggest elephant in the room possible: fix employment discrimination law so that employers can screen people without using 'college degree required' as a way to evade the chronically litigious employment applicants who game the system to prey on white collar employers who can't afford to fend off lawfare.
This regime is propped up by a thousand little decisions meant to subsidize bullshit degrees from degree mills. Change the equation and it will change the outputs.
I was hoping for a proposal that leaves the colleges on the hook for the loans, but yours is probably more politically feasible.
Although threatening the colleges with mine might make them more likely to agree to yours.
"It’s also bizarre to see conservatives on the side of big banks and the federal government. Why is the complaint always directed at the borrower: “you took out a loan, so pay it back” and never directed at the banks: “you loaned out money to an 18-year-old who wants a gender studies degree; you’re an idiot”?"
I get the spirit of what you're saying, and I don't think government should be in the student loan business at all, but isn't this really an issue of contractual obligation? The borrower has promised to return a debt, regardless of the stupidity of the lender.
Debt is a weapon used by the Elite against the People if anyone bothered to actually read history. A nation need to have young men well-invested in the future of the state in order to have the best soldiers and workers but they won’t invest if they have no future. If they won’t invest, then the security and function, which the smug old-timers depends on for their safety and health, will disappear, leaving behind chaos which will leave them broke, sick, and fearful. So, it’s in THEIR interest to not fall back on the oafish position but to look ahead 20-30 years down the road.
I think your youthful outlook is getting the better of you. The part about the government correcting the source of the problem on their end (ending college loans) is just plain wishful thinking. Thought experiment: write the bill you would propose that eliminates government funding of individual college education and puts whatever needed restrictions on private lending for the same purpose. How far do you expect that bill to get? Out of committee?
There is also the disdainful talk of paying back what you borrowed. I'm sure you are surrounded by fellow students complaining of the debt they are going into. Do you commiserate and tell them how badly they're being treated or do you suggest they do as you did? Would I be interested in hiring an engineer who couldn't figure out how he intended to pay off the debts he made while having a great time and living the college experience?
Forgiving loans will help "the left," just give ppl the offramp of debt peonage