
White House Might Put Colleges on the Hook for Student Loans - terryauerbach
https://www.wsj.com/articles/white-house-might-put-colleges-on-the-hook-for-student-loans-11552406110
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berbec
The system of government-backed loans, that cannot be forgiven through
bankruptcy, given to anyone under the sun, has fallen victim to the Law of
Unintended Consequences.

Vastly increasing the supply of money that can be paid to the Higher Education
System has, surprise surprise, greatly increased the cost of a degree. Entire
swaths of for-profit education institutions have popped up, ready to drink
from the ever-full FAFSA/Pell/etc trough.

The possibility of putting yourself through a great college is lunacy now a
days. You need to start saving as soon as you graduate to be able to pay for
your child's education.

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lgleason
This is long overdue. Many college programs have gotten really bloated and
over-priced. Students are often saddled with debt they can never pay off
because the degrees are not providing skills that employers are looking for.
This is not perfect, but a step in the right direction.

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xacaxulu
Please stop subsidizing these institutions. The US backed loan system for
ever-climbing tuitions are an obvious cartel. Never mind the uselessness and
lack of ROI of most degrees in the broader job market.

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gruez
>Never mind the uselessness and lack of ROI of most degrees in the broader job
market.

AFAIK the reason why this is even an issue is because the government
guarantees all loans equally (probably "study what you love" is politically
popular). If there were no government guarantees, lenders wouldn't lend to
students studying for useless degrees (presumably because they have a higher
default risk).

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Judgmentality
> lenders wouldn't lend to students studying for useless degrees

And why is that a bad thing?

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bko
> Colleges and universities argue that, should such a measure be implemented,
> it would harm schools that take on disproportionate numbers of low-income
> students, like historically black colleges and universities and for-profit
> schools.

This strikes me as bizarre. This is supposed to be a protection for the
student, not the school. If schools are failing their students, they should be
held accountable, especially for low income students. If someone gets into a
school, takes on loans and drops out, the college didn't do the student any
favors

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AimForTheBushes
It's almost like their admitting they wouldn't give out loans to low-income
students.

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SteveNuts
Serious question: Why not just remove the government guaranteed part of the
loans? This seems backwards to me.

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twblalock
Students would not qualify for loans if they were not guaranteed by the
government. They are young people with little or no income or collateral --
who would be willing to lend them tens of thousands of dollars?

If you remove the government backing you might as well just not bother having
student loans at all.

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ams6110
There are young people who should not be in college. They either don't have
the aptitude, or they weren't serious in high school and aren't prepared. We
should not be guaranteeing loans for these kids, nor making them at all in
most cases.

A young person with no income but good academics and a plan to study something
with good employment prospects would still be a good candidate for at least
some amount of credit.

Another side effect would be that with a drop in people going to college,
employers would be forced to drop the "college degree required" from the vast
number of jobs that really do not require a college education of any kind.

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twblalock
> A young person with no income but good academics and a plan to study
> something with good employment prospects would still be a good candidate for
> at least some amount of credit.

That's not what would happen. What would happen is that rich kids would get to
go to college no matter how prepared they were or what major they chose, and
poor kids who prepared well and chose useful majors would not be able to
afford it.

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ams6110
Poor kids used to be able to work in the summer and maybe part-time during the
school year to pay for college, until easy loans inflated the cost so much
that became impossible

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twblalock
Loans did not create the affordability crisis. Decreased government funding
for higher education did that.

Look at any first-world country that has kept college education affordable and
you will see that they are essentially propping it up as a social welfare
program, capping tuition, and giving universities tons of money. No country
has kept college education affordable through any other method.

That's also the way it used to work at state universities in the United
States, and that's why kids were able to work summer jobs to cover tuition.

If you take away the loans without also significantly increasing funding for
higher education, college will not become affordable again.

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RickJWagner
When I went to college, I thought the textbooks racket was the biggest ripoff
I'd ever seen. (New books every year, all at eye-popping prices.)

But loans have far surpassed that. It's like the colleges are shopping malls,
and the government gives every shopper a new Visa card when they walk up to
the door. The store owners are overjoyed. The people who pay for the card
later, not so much.

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neonate
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