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Under federal rule, colleges must leave grads better off or lose financial aid

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Re: Under federal rule, colleges must leave grads better off or lose financial aid

#81

Post by CamouflagedKiwi »

dataflow wrote: post #11
hankbond wrote: post #7

I feel like I have not really heard a compelling reason why student debt should not be dischargeable thru bankruptcy like (afaik) all other forms of debt. I am curious what the ramifications would be if higher education institutions had to (in some form) co-sign the debt being issued. I do get that not all education should be purely for economic reasons, but as an autodidact I feel that "learning for the sake of lear…

> I feel like I have not really heard a compelling reason why student debt should not be dischargeable thru bankruptcy like (afaik) all other forms of debt. According to Reddit [1] it was to discourage students from immediately declaring bankruptcy upon graduation. I don't see why they couldn't have put a time limit on it though, if that was the reason. Say you can't declare bankruptcy for 7 years after you leave sch…

You can't really tell people that they just can't be bankrupt though. What are they supposed to do if they have debts they can't pay but they're not allowed to declare bankruptcy because they pinky swore they wouldn't do it seven years ago?

Re: Under federal rule, colleges must leave grads better off or lose financial aid

#82

Post by andai »

tadfisher wrote: post #80
janalsncm wrote: post #41

> But this new test, known as "do no harm," raises some thorny questions about the purpose of college. Like: Is it just about making more money? If this is a fair question to ask students, then it is a fair question to ask the schools as well. They are the ones charging enormous amounts of money to students for this. This doesn’t prevent people from learning to paint or play the clarinet. It prevents students from ta…

If I want a philosophy degree then it's my God-given right to pay $240,000 plus interest for it. Maybe it shouldn't be subsidized, though.

Well, the way things are going, maybe it should be way more subsidized...

https://news.ycombinator.com/item?id=48818544

https://archive.ph/94e7p

Re: Under federal rule, colleges must leave grads better off or lose financial aid

#83

Post by left-struck »

LoveMortuus wrote: post #60

Isn’t this already a solved problem with models that are used in various countries in the EU? Where the education is financed through taxes, thus you don’t pay anything up front, but keep paying for it for the rest of your life.

In Australia we have interest free loans, I believe they are issued by the government. You are only required to pay it back if you earn over a certain amount per year, in which case it’s like an extra tax that lasts until the loan is paid back or you earn less than the threshold again.

It’s not perfect but it’s a good starting point.

Re: Under federal rule, colleges must leave grads better off or lose financial aid

#85

Post by chihuahua »

tadfisher wrote: post #80
janalsncm wrote: post #41

> But this new test, known as "do no harm," raises some thorny questions about the purpose of college. Like: Is it just about making more money? If this is a fair question to ask students, then it is a fair question to ask the schools as well. They are the ones charging enormous amounts of money to students for this. This doesn’t prevent people from learning to paint or play the clarinet. It prevents students from ta…

If I want a philosophy degree then it's my God-given right to pay $240,000 plus interest for it. Maybe it shouldn't be subsidized, though.

Right. And also, when you have paid $240k for that degree, don't write endless screeds complaining that the degree was a "scam" and that it's someone else's fault that you're not earning much with that degree.

Even in the 00s and 10s, there used to be people complaining bitterly that they have a lot of student loans after getting a degree in puppetry (seriously.) And the same people would have lit themselves on fire in a public square if they had been denied student loans for getting a puppetry degree.

I feel that you can't have it both ways: guaranteed student loans for any degree, no matter how impractical, and also complaining that some degrees funded with student loans don't lead to a lucrative career. Choose one or the other.

Re: Under federal rule, colleges must leave grads better off or lose financial aid

#86

Post by dansquizsoft »

CamouflagedKiwi wrote: post #81
dataflow wrote: post #11

Earlier quoted context omitted.

> I feel like I have not really heard a compelling reason why student debt should not be dischargeable thru bankruptcy like (afaik) all other forms of debt. According to Reddit [1] it was to discourage students from immediately declaring bankruptcy upon graduation. I don't see why they couldn't have put a time limit on it though, if that was the reason. Say you can't declare bankruptcy for 7 years after you leave sch…

You can't really tell people that they just can't be bankrupt though. What are they supposed to do if they have debts they can't pay but they're not allowed to declare bankruptcy because they pinky swore they wouldn't do it seven years ago?

Yeah I had a big lol when I read “just don’t let people declare bankruptcy for 7 years after graduation” - how in the world could this be good public policy?

Re: Under federal rule, colleges must leave grads better off or lose financial aid

#87

Post by Aurornis »

dataflow wrote: post #11
hankbond wrote: post #7

I feel like I have not really heard a compelling reason why student debt should not be dischargeable thru bankruptcy like (afaik) all other forms of debt. I am curious what the ramifications would be if higher education institutions had to (in some form) co-sign the debt being issued. I do get that not all education should be purely for economic reasons, but as an autodidact I feel that "learning for the sake of lear…

> I feel like I have not really heard a compelling reason why student debt should not be dischargeable thru bankruptcy like (afaik) all other forms of debt. According to Reddit [1] it was to discourage students from immediately declaring bankruptcy upon graduation. I don't see why they couldn't have put a time limit on it though, if that was the reason. Say you can't declare bankruptcy for 7 years after you leave sch…

The full reason is that preventing bankruptcy is the only way to keep interest rates low and make the loans widely available.

If bankruptcy was allowed then the obvious play would be to take the loan, max out credit cards right before graduation, then declare bankruptcy before you get your first job.

Lenders would respond by increasing interest rates dramatically and restricting loans to those who had assets. This would basically turn into loans being for people with wealthy parents or having eye-watering interest rates.

Re: Under federal rule, colleges must leave grads better off or lose financial aid

#88

Post by chihuahua »

dyauspitr wrote: post #26
hankbond wrote: post #7

I feel like I have not really heard a compelling reason why student debt should not be dischargeable thru bankruptcy like (afaik) all other forms of debt. I am curious what the ramifications would be if higher education institutions had to (in some form) co-sign the debt being issued. I do get that not all education should be purely for economic reasons, but as an autodidact I feel that "learning for the sake of lear…

Because then the normal thing to do would be to graduate, declare bankruptcy when you have nothing to lose in life because you are just starting out, work for 7 years and you’re in the clear by your late 20s. Everyone would do it.

Maybe not everyone, but certainly lots of unethical people would do it, and there are lots of those. They'd post unbearably smug posts on LinkedIn about it too, calling everyone a sucker who didn't walk away from their $200k in student loans via bankrupcty.

The justification for student loans being exempt from bankruptcy is simply that there is no asset to be repossessed. Car loans, mortgages, and HELOCs are different. Credit cards have very high interest to pay for the higher risk. I guess we could have student loans with 29% interest, would that be preferable?

Re: Under federal rule, colleges must leave grads better off or lose financial aid

#89

Post by [deleted] »

frognumber wrote: post #67
janalsncm wrote: post #41

> But this new test, known as "do no harm," raises some thorny questions about the purpose of college. Like: Is it just about making more money? If this is a fair question to ask students, then it is a fair question to ask the schools as well. They are the ones charging enormous amounts of money to students for this. This doesn’t prevent people from learning to paint or play the clarinet. It prevents students from ta…

I think the corollary is about taxpayer accountability. It's easy to make the argument: "If we invest $1M in education, we will have $10M in additional future economic output, $4M in future taxes, and $20M less in law enforcement / criminal prosecution / jail fees. It improves global competitiveness." That's a no-brainer. Education is a very high ROI investment for a country. Like infrastructure spending or industria…

[deleted]

Re: Under federal rule, colleges must leave grads better off or lose financial aid

#90

Post by conductr »

phyzix5761 wrote: post #77
hankbond wrote: post #7

I feel like I have not really heard a compelling reason why student debt should not be dischargeable thru bankruptcy like (afaik) all other forms of debt. I am curious what the ramifications would be if higher education institutions had to (in some form) co-sign the debt being issued. I do get that not all education should be purely for economic reasons, but as an autodidact I feel that "learning for the sake of lear…

Because its usually tax payer money that is used to fund these loans. If people started declaring bankruptcy tax payers would mandate that federal student loans stop existing as a matter of principle. People hold the value that its good to help students as long as they pay back at least what was given to them (adjusted for inflation).

We could also just decide to provide people higher level of education as a right. And, put some Medicare level pricing in place for colleges and universities to get cost in check.

I personally would want to see it with greater student participation/testing. The US education has been watered down to be so easy specifically because failing reduces LTV of a student. They want to just crank out degrees to as many people as they can. I personally think we need to figure out the healthy balance of education we need, because college for all isn’t it. Then just pay for them to learn at a high expectation level. Private schools will still exist to pump out full price degrees and that’s fine too.

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