Suppose student debt payments were capped as a fraction of income, say 10%. It seems like this would align everyone's incentives correctly toward the student succeeding.
we have to do something about the interest rates though, there are tons of programs to help cap your payment...but you're just kicking the can down the road as your balance goes up.
Or conversely, it would completely remove some individual's incentive to ever make life choices that would lead to paying that debt off.
Only that strange hypothetical person whose entire life goals revolve around avoiding payment of student debt.
I have a lot of friends from high school who seem to fit that description
But people like making money. It's not as if most people would say "aha! If I take a low paying job for the rest of my life I'll never have to pay off this debt completely!"
Some might I suppose.
It's not as simple as "people like making money". That's just one part of the job. People who pay more on their loans with increasing income will behave like people behave when taxes go up - the pay will be comparatively less important when weighed against things like working conditions, commute time, and interest in the work.
They can live on an island with the people who avoid earning any money so they don't have to pay tax.
"Completely" seems like an exaggeration. I would have guessed that it removes something like 10% of the incentive to make more money.
I don't think student loans are the primary motivation to earn more for people that have any hope of paying them off.
this is already the case. you just have apply for it as opposed to being the default behavior.
Seems like means testing this can only distort the incentives and introduce bureaucracy. If it were priced in universally we might actually see costs drop.