If it is quite profitable to get a certain education, why would it need the tax payer to provide the loan for it? Shouldn't that be easy to fund from the private sector?
Student loans aren't your standard private sector loan though. They are a special legal category, which is why they can't be discharged in bankruptcy. All the usual borrowing standards don't apply either. No commercial lender would give that size of loan to an 18 year old with no collateral. The collateral is effectively a claim on the person's future earnings. What a crazy contract to have young people routinely pressured into.
What that page doesn't tell you is the precedence courts have set for those tests is so high that nearly no one qualifies for them, and thus it is the case that the loans are virtually impossible to discharge even if it means losing your home and all your possessions.
Interesting, but that seems to be for exceptional circumstances ... A few hundred cases per year apparently. But maybe this route could grow substantially. Interesting reading-
I'm not convinced it's necessary but it sure as hell is nice. I got through undergrad with subsidized loans and it was nice to not worry about interest while I wasn't working yet.
The private sector does fund some loans but I think the current program just needs re-working. Forgiving all these loans is a no-go so this measure is a step in the right direction. I'd like them to lock down the interest rate to 2% + inflation next. The government does need to incentivize a certain degree of higher education for innovation.
Assuming you’re not talking about a loan to do this (at which point you’ve reinvented indentured servitude), back when there was a smaller pool of college graduates it was easier to find a company that would pay for your education, some even offering bonuses if you completed it.
Of course, there would be an expectation for loan repayment (most likely from employment somewhere). Is any unsecured/uncollateralized loan indentured servitude for you then?
So company A pays for your education to go work for company B (their competitor) and all they get is a lousy interest rate with no security?
If they don’t get ten years (or whatever amount) of your output, why waste the time and energy when someone else will do it for them?
I think the point is that it’s so beneficial to society for people to get these degrees that we should lower the barrier even further. I think you are right that having the private sector fund it is a good base state, I suspect you’d find that you can improve on that base by funding it with some public money. We’ve probably gone a little too far in that direction though.