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coryrc

Because your loans have collateral to return (home, car) and education does not.

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Education has yourself as return.

> Education has yourself as return.

That is not something a lender can repossess.

* free market intensifies

Not as they currently do it, no, but I imagine (at least with future loans), it could have the penalty that the university would not issue your transcript or vouch for your degree when the loan became delinquent enough. That would be similar in spirit repossession (except that the bank couldn't sell it).
But of course, they wouldn't get to take back any of that valuable knowledge and human capital you acquired there /semi-s

Schools already do that with debts, but most student loans for accredited schools aren't issued by the school, who has been fully paid by the lender.

College degrees are mostly about signaling. Employers can already check your credit history, so this wouldn’t tell them much they don’t already know.

The whole point of repossession is that he bank can sell it to recover at least some of their loss. Without that, it’s just destructive punishment. You’d be making society poorer by restricting this person’s job prospects, with no gain anywhere to offset it.

I don’t know how you get “the whole point” as being that. The credit scoring system likewise doesn’t give the lender anything to resell and merely punishes the borrower, but we recognize it as having positive sum effects for the credit system. A program of revoking degrees would behave the same way.
(Even if you have criticisms of the credit score as it exists today, most at least see the merit of “hey, other lenders, this person doesn’t repay loans, proceed with caution.)

The point of credit scores isn’t to punish the borrower, it’s to allow future lenders to better gauge risk. No value is destroyed when you put a negative mark on someone’s credit report.
Revoking degrees would be equivalent to burning down houses in foreclosure. Such destruction of value is obvious madness.

> Revoking degrees would be equivalent to burning down houses in foreclosure.
While I agree with your larger point, I think this particular bit is a little weak.
A revoked degree can easily be un-revoked, while a burned down house needs to be re-built from scratch. This is why it is socially acceptable for schools to withhold transcripts for students who owe money to the school.

It would be problematic for rich people who do not need loans, and destroy the trust on schooling system. Diplomas need to be irrevocable except for serious procedural issues.

Yeah, good point, universities never revoke degrees over objectionable behavior.
https://en.wikipedia.org/wiki/Bill_Cosby#Rescinded_honorary_...

Honorary degrees are, as the name suggests, different in kind from normal degrees.

If you can't find gainful employment with your new degree, not much worth repossessing, is there?

We teach kids they can be whoever they want to be, then stick them with a massive bill and say 'ha ha only kidding you miserable debt slave.'

The first half of that sentence is the problem, in my opinion. We treat all college degrees as having equal value and offer loans for massive sums of money, with no regard to their likely ability to pay it back. $150k to get a law degree? Ok, that's likely to work out. $150k to get a degree in Russian Literature? Or theatre? That's not a good investment. Of course there are people who have degrees like that and they end up in high paying jobs (often not in the field they studied), but they're the exception to the rule.
We seem to have stopped explaining how supply and demand works. Companies have a demand for employees with certain skills. If you can supply those skills, they will pay you. The higher the demand for those skills, the more they pay (IT, medical, many trades). If you have a skill that nobody has a demand for (say, theatre, or russian literature), you're in trouble.
Of course if you have a degree that isn't in demand, there's a way out. Find a way to take the skills you have and turn them into someone that companies want to pay money for. Turn your english degree into a career in copywriting, or your degree in theatre into a career in... something.

But why should everything be subject to laws of supply and demand? That's just slavery with extra steps. Alice is rich and got to follow her passion (even though it maybe took a long time), Bob was born poor and so any passion on his part must be subordinated to his ability to be employed by Carol regardless of opportunity cost.
Is this somehow Bob's fault for being born into the wrong circumstances? Obviously not. But if the aspirational messages that we provide to all people in society are only true for a privileged few, then the communication of same to a larger mass of people for whom it is not is a form of fraud perpetuated on those least able to detect it.

If anything, the fact that tuition rates have skyrocketed, and people continue to pay any price using loans they later struggle to pay back, is a textbook example of how separating what people have to pay from what something actually costs is a terrible idea.

Why shouldn’t it be subject to the laws of supply and demand? If my passion is Russian Literature, you’re saying that someone (who?) must create a demand for that so that I can make a living pursing my passion?

I literally know a person with a Russian Literature degree who thinks that. That's exactly what some people say.

I know. The story I referenced about Humans of New York was exactly that: “I have a degree in theatre and I can’t make above minimum wage. That’s unfair, theatre is important and I should be able to make a living doing that.” I know people personally who are like this, and when you engage with them and say “Have you thought about getting a job doing X at company Y” or “There’s a huge demand for nurses, have you thought about getting a nursing degree”, the response is something like “I don’t want to do that, I wouldn’t enjoy it.” There’s some sort of fundamental disconnect here between how they think the world works and how it actually does.
At the end of the day, free college is not going to solve the problem, and I firmly believe it would make matters worse. With no skin in the game, people will get all manner of ridiculous degrees, and the universities will be more than happy to give them to them.

You are not required to apply for student loan. You can earn a tutition waiver and/or scholarship if you are deemed successful (OK, not in all cases); or you can pay the expenses by yourself if you are rich enough. All student loan does is enabling lower-middle income not-so-successful people to climb the income ladder more easily and/or faster.

Do you think that people who complete high school should be expected to understand compound interest and that people who can be legally tried as adults should be trusted to enter into a contract and abide by the terms thereof? When you grow up, one of the things you can choose to be is an adult.

But the repo process for brain cells is a little too gruesome for bankers.

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