[brudgers]

Repaying the loans is only one way the system might be corrected. Allowing student loans to be discharged via bankruptcy would be another, which has recently been outlawed. Thus prices for education are set in a marketplace which rewards bad loans by shifting all of the risk to the borrower.

[matwood]

Why shouldn't the borrower shoulder most of the risk? If we shift risk to the lender then they will simply stop lending. Then people will complain how they can't get a loan to go to college.

[fnordfnordfnord]

The borrower, the taxpayer, and anyone who holds dollars shoulder the risk to one degree or another. The "lender" has only to move paperwork in order to reap a profit. Can you not see that if the lender had to assume some risk, then the lender would probably lend more to high paying, high demand job skills, and less to skills in saturated market segments and unproductive skills.

[sokoloff]

I can also see that lenders might exert their influence in ways you'd find objectionable, making lending predicated on family assets/income, requiring co-signing from a parent with a 650+ credit score, not lending to liberal arts majors at all, refusing to lend at "black colleges", or preferentially lending at Ivys, etc.

Of course, they'd do it in the name of lending to high paying, high demand job skills and high likelihood of repayment. Under such a system, I'd have still gotten loans, but I'd rather see a system where some percent of people who make bad choices suffer from their choices, but where educational loans are widely available than a system where few are "allowed" to make bad choices, but loans are more narrowly available.

I don't want a world that's even more "rich get educated, poor don't" than today. If I look back at my family, my generation is much, much better off, primarily via education, than my grandparents who very literally mined coal and worked in a steel mill. They scrimped and saved so my parents could go to college to become teachers, who in turn ensured we did as well. That's no college to no-name college to top-name college in the span of two generations.

Of course that's only one data point, and if I read it in a paper, blog or on news.YC, I'd roll my eyes at the cherry-picking, too, because it'd be 1 story hand-selected from 100s of millions. In my case, it's 1 of 1, so I want to ensure we preserve the conditions that let my parents work hard to forge a better life for themselves and my siblings. Maybe in a world where college loans are hard to get (such as the world they lived in), this would all work out similarly, and easy college loans are in fact part of the problem, but I think there's been heaps of hidden benefits to having education being more widely available and more common that people overlook when they see Mr or Ms Bad Choices as an adult with untenable student loan debt.

[fnordfnordfnord]

I was responding specifically to the parent comment who appears to like the fact that the borrower assumes a high degree of risk, and the paper lending company assumes essentially none. I hadn't really meant to offer it as a final solution to all our problems.

>I can also see that lenders might exert their influence in ways you'd find objectionable,

If the gov't decides to use economic forces to manage the supply of college grads, I would hope that a large portion of funding would go into very productive areas. It should/would likely change over time to correct oversupply, changing demographics of society, etc.

>making lending predicated on family assets/income, requiring co-signing from a parent with a 650+ credit score,

An unfortunate but predictable outcome. Ideally, a parent with a 650+ credit score would be able to afford to support a child in college w/o much support. I have such a credit score, but probably won't be able to educate my kids based on my college instructor salary alone. Ironic, eh?

>not lending to liberal arts majors at all,

Funding the arts via loans is right out, obviously. Funding the arts is a problem that has spanned pretty much all of recorded history. No simple scheme such as mine can pretend to solve it today. Attempting to use economic/market forces in the normal manner to produce good art will only ever have comical results at best, and the nominal result will be crap. (I have an amusing idea. I'll tell it further down.)

> refusing to lend at "black colleges",

Grants? Be prepared to write off a lot of the "loans" to minority and impoverished areas. Since they are minorities, it will be cheap anyway. We could probably do away with race-based affirmative action, and simply make grants to students and institutions in impoverished places, and from impoverished families.

> or preferentially lending at Ivys, etc.

I'm also not sure how to effectively stop the well-connected wealthy from sponging off of everyone else. I could say "means testing" but we both know that these types of parasites are clever and quickly adapt to their environment. Hopefully if the rich use loans, the majority will repay them, and thus be a source of income rather than a drain. More likely, their parents will hire expensive accountants to help rid their heirs of this debt, justifying this thievery because it is "so unfair" to "tax success."

>Of course, they'd do it in the name of lending to high paying, high demand job skills and high likelihood of repayment.

Yeah, so, at least we agree that there may be a possibility for a pseudo-private-ish loan outfit to be somewhat profitable for some higher-ed funding.

> Under such a system, I'd have still gotten loans,

I could have gotten loans too, but I refused (for better or worse, I'm not sure). I had negative/neutral financial support from family, and eventually dropped out of Uni before completing my BS. meh.

but I'd rather see a system where some percent of people who make bad choices suffer from their choices, but where educational loans are widely available than a system where few are "allowed" to make bad choices, but loans are more narrowly available.

I don't want to see people suffer, but I don't think that's what you really meant. I think it would improve our economy, and the lives of many people if some of us were economically herded into productive industry. I know, it almost sounds like communist central planning, and it probably is. But letting high school seniors choose the economic direction of our country at their whim seems like a poor alternative.

I don't want a world that's even more "rich get educated, poor don't" than today.

Me neither.

If I look back at my family, my generation is much, much better off, primarily via education, than my grandparents who very literally mined coal and worked in a steel mill. They scrimped and saved so my parents could go to college to become teachers, who in turn ensured we did as well. That's no college to no-name college to top-name college in the span of two generations.

Yes, it's so obvious that it shouldn't need to be said. Education will improve everyone's life to a greater degree than pretty much anything else.

Of course that's only one data point, and if I read it in a paper, blog or on news.YC, I'd roll my eyes at the cherry-picking, too, because it'd be 1 story hand-selected from 100s of millions. In my case, it's 1 of 1, so I want to ensure we preserve the conditions that let my parents work hard to forge a better life for themselves and my siblings.

Let's call this a friendly chat over coffee, and overlook these misdemeanors.

* Maybe in a world where college loans are hard to get (such as the world they lived in), this would all work out similarly, *

I think it needs a systematic approach. The colleges themselves have to adopt ethics. It will be tough, you can't really outlaw meanness, wanton greed, stupidity.

and easy college loans are in fact part of the problem,

Greedy businessmen are sucking this money out of kids' pockets as fast as the kids can borrow it. I see it every semester. Students pay 2X, 3X, 10X, prices for books, computers, supplies, etc. because the campus store is integrated with the school and makes spending that money much easier than buying used texts from individuals, the internet, etc. The bookstore stocks lab items for my courses, but at a huge markup over retail. Next to every nasty decrepit warm-water fountain is a vending machine full of cold Dasani(TM), or better yet Coke!### Prices at the "food court" are another outrageous example. Privately financed campus housing? The same.

* but I think there's been heaps of hidden benefits to having education being more widely available and more common that people overlook when they see Mr or Ms Bad Choices as an adult with untenable student loan debt.*

Absolutely, but, I think that was probably true to a greater degree in the past, and that the [education funding] system for people in our cohort (middle-class-ish?) is tending more toward a sort of Hobson's choice of debt-slavery / indentured servitude vs. forgoing formal education.

## Arts funding should be fragmented from education funding. It should be as independent as possible from political influence. There could be divisions administered by appointees (appointed for life) who would primarily give block grants to institutions of their choosing. Funding divisions could be run in a variety of ways, but at least one should be required to only make funding decisions while under the influence of mind-altering drugs. Now that I think of it, the same arrangement might do well for science funding (especially Physics).

### Unless Pepsi has the vending "contract"

[sokoloff]

That was one of the most well reasoned wall of text, point-by-point replies that I've ever read. Well written and I suspect we agree far more than not. Thanks also for teaching me "Hobson's choice". Cheers!