Hacker News Reader

Comment by ethbro | Hacker News Reader

The problem with "good prospects of replaying" / full-knowledge lending (and what the system was originally intended to prevent) is that the best lendees are wealthy students from socioeconomic groups with good employment prospects.

I'm not one to toot on the SJW train, but it's likely inefficient (and certainly unjust) if we encode existing economic biases into our primary method of access to educational capital.

View on HN

I agree with everything you said, but doesn't lending money to the group of people that are less likely to make repayment puts them in a worse place? Instead of being in a socioeconomic disadvantage, they now also have a loan that they can never payback. It honestly feels predatory and sounds like payday lending or one of those "more credit = more cash in your wallet" ads.

I'm really sad that in this view, access to credit is equated to access to education. Sure, in a first degree thinking the goal is achieved, but at the end of the day education is a means to an end rather than an end in itself. Lending people money to attend unaffordable institutions can't be the best way to fix the problem.

>I agree with everything you said, but doesn't lending money to the group of people that are less likely to make repayment puts them in a worse place?

Not if loan terms aren't designed to court default, which they often seem to be. Doesn't it seem backwards to require that the people least likely to be able to pay, pay higher interest rates?

> Doesn't it seem backwards to require that the people least likely to be able to pay, pay higher interest rates?

I mean, yes. But on the other hand if the ability to payback the loan (risk of default) isn't taken into account these loans might not exist at all (not necessarily a bad thing). Eventually the risk-adjusted rate hits usury limits and loans start disappearing.

(Of course we still get things like payday loans, credit cards, student loans, etc., but these are legal loopholes that should be closed.)

Poor, but capable and deserving, students should be given scholarships, not saddled with debt.

University degrees are not actually that expensive to obtain. You go in-state, live cheap, and, if you’re poor, apply for scholarships. Loans are really only necessary if you’re obtaining a graduate degree or if you’re going to an elite school. I think loans would be available to most people in either circumstance.

I went to school 2008-2012.

Went in state,

lived at home (commuted 2-2.5~ hours twice a day)

lived cheap (no real spending outside of school bills)

Had scholarships which knocked off 50% of the sticker price.

After all that, and the high interest rates at the time on my initial loans it was north of 200k.

My parents helped with food and rent (living at home) but everything else I took a loan off.

I considered my loans heavily predatory and wish I could have done things differently.

That's nuts. What state?

Comparing that to my alma mater (Johns Hopkins), a private university, your loans work out to more than my total cost for tuition for four years (2004-2008). Even looking up their current rates, the average four year tuition after student aid is ~130k. Without any student aid, it hits ~$200k.

Compare that to UMBC right up the road. Full-time tuition for a year is under $12k, plus a few thousand in books and fees leaves you at less than half of your private schools number less financial aid. And everyone gets aid if you're instate in MD.

Go to public schools, live at home, get out with little debt. It's really not a difficult choice, and it gets even easier if you know about the existence of community colleges.

Stop anchoring impressionable kids to ridiculous tuition numbers.

Edit: the highest average in-state tuition is Vermont with just over $17k. If you're willing to go to a state school, you can do it for under $80k for 4 years.

https://research.collegeboard.org/trends/college-pricing/fig...

Hah, no kidding. For what its worth, I grew up in a family that moved often, and was not technically in-state anywhere. If I had known that my family would also move to Maryland, College Park would have been probably where I would have aimed for. Younger siblings attended there, and with the Maryland scholarships essentially graduated debt free.

Illinois, it was a private school, a semester's cost was 15k.

Granted I should have went to a community college to get my basic classes sorted out.

But being a first generation immigrant and the first to go to college I had little guidance and a high pressure to appease my parents.

At the same time they could not make any payments on my behalf but also did not allow me to go to community college either.

Some would say I should have been smarter, but my parents were sold the "American Dream",

I was forced to foot the bill :)

I realize now that I wasn’t explicit, but implied by “in state” is going to a public university (since those are typically where in state tuition is different than out of state tuition).

Thanks, actually I wasn't aware of that even now!

Really this would have been great to know from my high school advisor to be able to convince my parents to let me consider other types of universities.

The flip side of dischargeable loans going largely to the currently entrenched is that those most victim of non-dischargeable loans are the ones most in need of protection.

School in the US is already funded by the people in the immediate area, meaning that poor families have worse schools. Also wealthy families wouldn't need student loans anyway.

Reply on news.ycombinator.com