[erikpukinskis]

At Texas A&M, the default rate for Liberal Arts majors is 5.9%, compared to the school average of 4.7%. Engineering majors default at a rate of 3.8%.*

http://www.tgslc.org/pdf/tamu_default_study.pdf

I don't think modulating loan rates based on whether you're a Liberal Arts major will really solve the problem, and I also think it's also unfair.

* These numbers are percentages of students who entered repayment of their loans between 1997 and 1999 and defaulted by 2003.

[xanados]

A default rate of 5.9 vs. 3.8 is significant. That means that if two groups of 1000 students take out loans, the group made up of liberal arts majors will have 55% more defaults than the engineering group. Given that loan interest rates are on the order of 5%, I fail to see how a 2.1% difference in default rate would ever not be significant.

[danielweber]

And it won't change course decisions at all.

If an engineer is allowed to borrow $30,000 and the liberal arts major is allowed to borrow $10,000, then the school will just charge the engineer $20,000 more. (They'll probably frame it in a much better way that looks like a discount to the liberal arts major, but it's important to not be fooled by that.)

[azakai]

If the school charges $20,000 more for an engineering degree, that will be a clear signal that that degree is more valuable. Which can definitely change things.

[JumpCrisscross]

Is it fairer to over-allocate to the major where the graduate has a 2.1 percentage point higher chance of defaulting on a loan they will never be able to escape? The cost of an artificially levelled playing field is the present malaise.