Quote:
Originally Posted by Ben E Lou
The difference to me is that we allow a 17/18/19-year-old kid to make that decision for that kind of money. No bank, car dealer, CC company, etc. is going to give them anywhere near that amount of credit, but the government does, and, yeah, it can't be discharged in bankruptcy. In principle, I've got no problem with *something* that allows these folks a second chance. The devil, of course, is in the details. As mentioned above, I'm extremely uncomfortable with just writing off 10 grand for young physicians who happen to make a little under the threshold, but clearly received great value for their loan and are easily able to pay it back. That's an entirely different situation to me, though, than a kid who grew up without great parental guidance and got talked into a huge student loan by an unscrupulous college recruiter.
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That's a big difference. In many businesses, there's a "satisfaction guaranteed" model for physical products, but it's less the case for services or other non-tangible goods.
We've stopped seeing the government as the sum of the people. When the government spends money, it's all of us spending money. I have a real problem with the image of people who worked hard, but didn't have the opportunity to go to college paying for these failed (or not failed, but difficult to pay off) loans.
How in the world did a college education become so expensive? My wife is a professor at a regional campus for a mid-major (just received tenure a couple of months ago) and one of the things she takes a lot of pride in is that it's affordable. Her students mostly don't need loans to finish. If they choose the right major for them, they're starting adult life in great shape.
What people often don't see when examining this issue is that the places with the highest percentage of students with crushing debt are generating debt in graduate school at major private universities. I think Columbia's non-science graduate programs top the list, if I remember the article I read about this not that long ago. They get that grad degree, owe six-figures, and the jobs they're qualified to take earn $30k. That's not a good decision. No bank would make that loan. And $10k isn't even going to make a big difference. The young adults who are screwed aren't $10k worth of screwed.
But those same universities have billion-dollar endowments. That's where the loan guarantees should come from. The universities, not the government. If you're selling your services as worth $50k per year to 21-year-old college grads, and you know the major they've chosen is going to lead them into a long, long debt... you're committing fraud. And the taxpayers shouldn't bail that out any more than they should have bailed out the banks that played games with risky home loans and caused that crisis not that long ago.
At some point, these universities started looking at their bottom line as an entertainment company does rather than as educational institutions. So you got administrative bloat, a focus on "academic" products and majors that have nothing to do with the world outside of the bubble. And that mindset metastasized. If we bail them out, it's only going to get worse.