Hacker News Reader

Comment by theli0nheart | Hacker News Reader

While this situation sucks, how is it any different than buying a house with a loan, having the house lose half its value, and then having the mortgage be written-off by the bank? Many adults went through this in 2008-2009 but short of filing for bankruptcy, I don't think billions of dollars of loans were forgiven because people couldn't pay them. They had to give up their houses, which would be the equivalent here of giving up your education.

Basically, if loans don't need to be paid back, what's the point of a loan at all?

View on HN

If you were mislead by the bank about the value (or future value) of the house, then perhaps that loan should be (at least partially) forgiven as well.

It is also the responsibility of the party giving a loan to ensure that the borrower will have the ability to reasonably repay the loan in the future.

> If you were mislead by the bank about the value (or future value) of the house, then perhaps that loan should be (at least partially) forgiven as well.

During the housing crisis, banks enabled home buyers by providing low interest rates, insanely low income requirements, and small down payments. As a free person with their own free will, it should be your responsibility to decide if an investment is worthwhile, not a no-name bank which most definitely does not have your best interests at heart.

> It is also the responsibility of the party giving a loan to ensure that the borrower will have the ability to reasonably repay the loan in the future.

While it's obviously their goal to ensure that the borrower will be able to repay the loan (why else would they have people jump through so many hoops to get one?), it's by no means their responsibility. The only responsible party here (i.e., the party you can count on) is yourself. Your bank isn't going to find you a job, or put together your resume for you, just so you can repay your loan.

I want to live in your world of perfectly rational and infinitely wise superhumans. Sadly we live in the real world, and people are under-educated about debt, mislead by marketers, preyed upon by salespeople, and left holding the baggage. Adding and enforcing regulations about how debt can be issued, and helping people who have been victimized, seems like a practical resolution to the problem, rather than the one based on wishful thinking that you propose.

I think we're both describing the real world. People can simultaneously be held responsible for their debts and be under-educated about debt, mislead by marketers, etc. The question is who pays when a borrower makes a mistake—the lender or the borrower.

If you label all borrowers who can't pay back their loans as "victims", wouldn't that make the practice of lending itself immoral? In your opinion, why not just outlaw lending completely and be done with it? That way no one can be taken advantage of.

I have a hard time foisting the responsibility for all $108 billion onto the borrowers. There's something more at play here than personal irresponsibility.

> If you label all borrowers who can't pay back their loans as "victims", wouldn't that make the practice of lending itself immoral?

No. It is only immoral to knowingly lend to someone who can't and won't be able to repay the loan.

But that is unfair to those of us who do understand debt. This is the problem with socialism right here--you can't cripple the people who are responsible, who do the right things. You kill the country that way.

You feel cheated that you understand debt enough not to be taken advantage of? Seems like a silly thing to be upset about.

Perhaps we also shouldn't rescue someone who falls into an open man-hole, because it isn't fair to those of us who know to watch where we're walking?

The issue is that "not understanding well enough.." is the fault of the fool, not the crook. Crooks will always exist.

Fools should be responsible for the consequences of foolish behavior.

>Fools should be responsible for the consequences of foolish behavior.

The financial sector disagrees.

And they are wrong. Criminals should be held accountable, and justice should be blind. Naive or not, those are goals we should uphold as a society, in my opinion.

> The only responsible party here (i.e., the party you can count on) is yourself.

Agreed, but to that point, I'd imagine that the primary consumers of student loans are people in their late-teens who are on-the-whole less financially responsible than homeowners. And for a lot of those people, they're under a lot of social pressure to go to college despite the fact that it's a gamble that might not pay off.

Completely agree. This is a problem of education, upbringing, and society. If we really wanted to solve this problem, we'd address the root issue, and adolescents would understand that college isn't required or expected to be a functioning and productive member of society.

Banks didn't generally make any promises about the future values of houses.

The difference is that you can't clear student loans by going bankrupt AFAIK.

While that's completely true, my point stands. If loans don't need to be repaid, what's the point? Why just give up the ruse and make college free for everyone? I'm not proposing this at all, I'm just saying this is a slippery slope and the difference between the two is minimal.

Going bankrupt doesn't have zero costs associated with it.

The linked article in this post doesn't mention anything about the borrowers needing to file bankruptcy.

Reply on news.ycombinator.com