[tejohnso]

I'm curious to know how these loans became such a political issue. It's unusual to take out a loan and then complain about having to repay it. That's how it is supposed to work. We don't typically reward people for digging themselves into a hole by bailing them out. Unless they're large corporations. We bail them out in certain cases. But I don't think that's a popular idea either.

[timssopomo]

We do, actually, at least in the US. It's called bankruptcy. We generally recognize that sometimes despite best intentions, debts become unpayable and in these cases, the debts get restructured and creditors are frequently wiped out (which is fair, since both borrower and lender take risks).

Student loans can't be discharged through bankruptcy unless the borrower is permanently disabled. It's entirely possible to end up in default on a loan for a degree you never obtained, paying a loan your entire life, without ever decreasing the principal. Unsurprisingly, this rubs people the wrong way.

[LadyCailin]

It should be on the university and college, if you must have private higher education, and not just make it free. State that the institution and/or potential employers must give out a loan that will cover the entire cost of education, which can be paid back with x% of income for 120 months of full time employment. If the student cannot find a job, or is not desirable for a given industry with the degree, and has to take a waiter job, they still owe x% of their wages, but the absolute value of that will be much lower.

Now, the university will stop offering loans for worthless degrees, and they will only give you a loan for things they think you can actually succeed in, ensuring that there is huge incentive for everyone to ensure the student succeeds if they end up needing a loan.

Private cash payments can still be made to take whatever underwater basket weaving major you like, but you can’t go into debt for a degree that will bind you for the rest of your life.

[everforward]

I think it would need to be more nuanced than that if we want to escape second order effects.

The first is that if the college bears risks for financed students, the first seats will always go to people who can afford to not use financing. It'd be like the legacy system, but out in the open and encouraged by regulation.

The second is that it will likely make it harder to climb the social ladder. I'm too sleep-deprived today to find sources, but I would imagine that students that can afford to not work while in school tend to do better. Likewise, I would bet that wealthier students tend to do better by nature of connections. If your dad/mom is an engineer, and you want to be an engineer, you've already got connections.

It also pushes people towards the military, if the GI Bill is the only way for normal people from poor families to afford college. It's a little dark that wealthy families can pay their children's way, but poor families have to risk them dying to do the same thing.

I like the basis of the idea, I just think it needs a bit more nuance to prevent wealth inequality getting worse than it already is.

[LadyCailin]

Yeah, these are all good points, and I agree. But the bottom line is that currently no one profiting from the situation has any skin in the game, so when they start doing more harm than good, they have no natural alignments that would make them self correct.

[rootusrootus]

> It's called bankruptcy.

Then why is the discussion around a debt jubilee rather than reforming the bankruptcy rules for student loans?

[timssopomo]

I'm pretty sure the folks who are for a debt jubilee are also for reforming bankruptcy rules, and there are folks who are in favor of reforming bankruptcy rules that aren't for a complete jubilee.

I was pointing out that we already have a legal and moral framework for discharging debts that can't be repaid.

[godelski]

So first off, remember that the people taking out the loans are typically between 17 and 20. I don't know about you, but when I was 18 I was a fucking idiot. I mean I still am, but more so back then. I would be surprised if you weren't (and you probably aren't even the median case!). Also consider that a lot can happen in 4 years, especially at that age. Your interests typically rapidly change, you learn more about who you are, and you may underestimate your future earnings (especially given that schools tell you that you'll earn so much because of your degree and their connections). But there's some other issues.

- Interest rates have gone up

- Cost of schools have risen

- The government holds most student debt

- It is still usually a good deal to get an education, but the deal is rapidly becoming less of one (the value of the deal is even changing for people in the middle of education or even graduated)

- The clauses on the debt are getting stronger, being almost impossible to cancel the debt and leading to people never being able to pay off their loans.

- The loans are predatory and becoming more so (when I took mine out a decade ago I had the option to pick "fixed rate" or "variable" but that wasn't actually fixed _interest_ rate)

- Schools are promising scholarships and then not giving them (my school would constantly schedule me for meeting with the financial aid office, a requirement, the week after the deadline and wouldn't schedule me before)

- We're better understanding the major impact on our economy when a generation that is in their prime earnings age is still not consuming and instead paying off debt.

- An educated population results in a happy and effective civilization (especially if one of your main exports is technology)

I think there's a lot of good reasons that people are pissed off. Our generations specifically was told "go to college and you'll get a good job and have a stress free life." But we quickly found that going to college doesn't lead to a good job and we can't get the same things our parents did. Jobs are harder to get, they don't pay as much, and housing is insanely priced. So basically people are pissed about a lot of stuff and a whole messed up system, and most young people are either: in college, avoided it because cost, or recently graduated. Considering that, it is unsurprising that it is a major focus.

Also I should add, some bailouts work. Pretty much what people are saying here is "this has gotten out of hand. You need to bail us out so we can effectively participate in society."

[rootusrootus]

The age argument is an interesting one. Should we be redefining what the age of majority is? Because if 18 year olds aren't competent enough to make borrowing choices for college, it follows that there are plenty of other consequences they shouldn't face.

[godelski]

The barrier is always complicated. There's also other issues, like financial literacy. I come from a upper middle class and still fell prey to the "fixed interest" claim. I'm pretty sure kids from families less well off are going to fall prone to even more egregious predatory tactics. It gets complicated really fast because one of the major goals we want from education is it to provide a means to climb the socioeconomical ladder. If we use predatory tactics in any form, then we're biasing towards targeting those people even more. Beyond that, with age, it is hard for an 18 year old to conceptually understand a 10 year loan. I'd argue that you don't start to understand that magnitude till 30 (You've lived 10 years as an adult). But that's way too late to take out a school loan.

The problem comes down to a simple one and I'll put it in the form of a question (this question generalizes to a lot of other areas too btw):

Is a deal/agreement fair when one side has an elite team of lawyers and psychologists and the other team has a high school degree?

I honestly think this is a question a lot of us, especially working for big tech companies, need to internalize and address. I'm not sure there are any easy answers either, because whichever side you fall on (I'm assuming people will say "{yes,no}, but..." instead of a strict black and white answer) there are nuances that are going to play major roles and tip the scales. I'll hint at my personal answer by saying I agree with Blackstone.

As to the question of "bail us out so we can participate in society" I think that is a little different. I think the problem is that the structure has rapidly changed and become out of hand. Incentives were misaligned. We tried to create a system where everyone could get the means to attend college but that incentivized an environment that creates predatory lending and increased financial obligations (upwards of 1k% increases). There's clearly something wrong with the system. I think many people claim to have the answers but I'm sure these are all far too naive. Something this complicated isn't going to have trivial solutions.

[jhpaul]

In the US, an 18 year old is too young to drink, old enough to vote, old enough to send to war, old enough to be tried as an adult in a court of law, and too young to rent a car.

It seems our age of majority is already an arbitrary measure.

Unless students are educated in financial literacy and professional life as part of the curriculum, I'm not sure we can expect them to be making competent, experience-based decisions on the cost benefit of education on a 20+ year timescale.

And that's not to mention that many loan providers use predatory tactics, including the companies that administer federal loans.

[imtringued]

No it just means that their environment is manipulative.

[peterangular]

100% in good faith:

> I'm curious to know how these loans became such a political issue. It's unusual to take out a loan and then complain about having to repay it.

Saddling _teenagers_ with such debt is problematic in many ways. For many of my peers they were not ready/cut out for college but still had the debt + schooling jammed down their throats because "it's what you're suppose to do."

Then, there's the cost to quality situation... I got nailed with this one - accredited private college with little oversight with a _horrible_ program for my area of study. We're talking two professors for the entire subject, and most of the courses they had advertised in their catalog hadn't been offered in over _seven_ years. Lots of people's time at school was just jumping through hoops for an "education" with very little value to their eventual career.

Cost has gone through the roof - administrative costs for colleges have skyrocketed. I've worked in marketing for schools - they're businesses before they're educational facilities. They're profit seeking through tuition, grants, donations, etc. Don't even get me started on sports...

> We don't typically reward people for digging themselves into a hole by bailing them out.

They were put through an incredibly profit-seeking system that operates in it's own self interest to get as much tuition as possible. Just like the healthcare industry, we've let administrative costs and middlemen drive the price of an education up while whittling the quality of it down.

100% they were not the only ones digging the hole that they find themselves in. Additionally, I have a hard time nailing 17-18 year olds to the cross for poor decisions in regards to their "digging" activities.

> Unless they're large corporations. We bail them out in certain cases. But I don't think that's a popular idea either.

And, just saying - yes this happens!! We consistently cut breaks to the interests of capital (large corporations, the rich w/taxes). Regardless of how any of us feel about it, this will continue to happen. So if our corporate benefactors are getting help, why can't a citizen with/seeking an education get some help too?

[rootusrootus]

> Saddling _teenagers_ with such debt is problematic in many ways.

So perhaps the solution involves some combination of 1) raising the age at which someone is considered an adult until it does not end with "teen", and 2) not giving loans to people with no plausible way to repay it, and/or 3) requiring a cosigner who is both older and better funded.

Maybe we take away blanket guarantees for student loans, make them dischargeable in bankruptcy, make the interest rate and borrowing limit based on plausible future income, things like that.

[peterangular]

I agree with these things in practice, but I feel they ignores the root of the problem:

Cost.

---

The joke of a school I went to now costs upward of $38k/yr base (not sure what room/food on top of that is). Hell state schools are upwards of $20k a year even with financial aid...

Maybe higher education shouldn't be this expensive across the board so people wouldn't be saddled with crippling high-risk debt while they're arguably still children.

I can tell you whatever the %#%$ I got was NOT worth anywhere near that in tuition... gen-eds were effectively highschool 2.0, and I was learning more in-industry than I was in the classroom at the time for my main area of study.

To think people are getting charged $38k+/yr for that just pisses me off. Even if it was an objectively good education + program - it's still too expensive.

---

Also one more thing I want to address in your response: what about economically disenfranchised peoples? If we implement the ideals you lay out I can easily see that being a huge barrier. I personally believe these folks should have access to higher education too - which is why I strongly support things like financial aid, grants, scholarships, etc.

If we make it into a more traditional loan I think it would potentially discriminate against students who come from less-than-ideal backgrounds.

[dudul]

It's just something that can be presented in a very divisive way for each party to easily capture sizable market shares of the electorate. It became a "valuable" problematic to put forward when the group of people who struggle to pay off their loan became big enough to make it worth it politically.

[dionidium]

The way this works is that you just have to define something to be a "necessity" in the public consciousness, because there's a prevailing intuition that it's illegitimate to be asked to pay for anything that fits that description. Medical bills are a necessity, so it's illegitimate to be asked to pay them. You have to go to college to get a good job, so it's illegitimate to be asked to pay for an education. You need a place to live, so high rents are also illegitimate. And so on.