
Why America’s $1.5T student-loan crisis spiralled out of control - paulpauper
https://www.marketwatch.com/story/why-financial-education-wont-solve-the-15-trillion-student-loan-crisis-2019-06-27
======
howard941
> Financial literacy courses should be required

That's rich. I suppose the cost of the course will be included in the student
loan?

Better to do away with the cruel 3 prong Brunner test and just make the debts
dischargeable in bankruptcy. Two useless financial literacy courses are
already prerequisites for predominately-consumer-debt bankruptcy case
discharges.

~~~
dahdum
What stops the student from declaring bankruptcy at age 22 with no assets and
a completed education? Their respect for banks? The 7 years of credit score
pain?

~~~
AlchemistCamp
The Bush 43 bankruptcy reform act made student loans impossible to escape via
bankruptcy. As Peter Thiel said in his recent speech:

> _" There is the fraud of university education. Student loan debt is not
> dischargable in bankruptcy. The government can garnish your Social Security
> payments when you’re 65 to pay off your student loans."_

source: [https://medium.com/@bonniekavoussi/notes-from-peter-
thiels-s...](https://medium.com/@bonniekavoussi/notes-from-peter-thiels-
speech-at-the-national-conservatism-conference-on-july-14-2019-6a51b26b202)

~~~
howard941
I've counseled many parents who'd guaranteed their kid's loans only to have
their own SS garnished when the kid couldn't pay. It's a shitty system.

------
AlchemistCamp
The problem is that schools are _mostly_ a signaling mechanism rather than
focused on increasing human capital through actual education. As more people
attend, societal expectations adjust and even food service jobs start
requiring 4-year degrees.

The problem with everyone investing in signalling is that it's a zero-sum
game. If everyone in your neighborhood buys a fancy car, it's no longer fancy.

Bryan Caplan, an Economist at George Mason, wrote an excellent book about this
phenomenon and has recently done quite a few interviews about it:
[https://press.princeton.edu/titles/11225.html](https://press.princeton.edu/titles/11225.html)

