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Comment by chmod600 | Hacker News Reader

"We can’t just rely on the market to provide all of the quality discipline that master’s programs need."

It seems like if the federal government stopped lending for master's degrees, and allowed students to file for bankruptcy to get out of private loans, then the market might very well sort everything out.

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Wouldn't that just mean rich people got masters they didn't need and poor people didn't get ones they did need?

Maybe markets have a difference concept of efficiency than society...

Poor people who choose degrees with good career prospects will get a loan. Poor people who want a degree with bad career prospects may not have the chance to waste a year or more of their life pursuing one.

Surely no one will get a loan because as soon as you pay your last fee, you can declare bankruptcy? That way you don't have to pay back that money and there is nothing to be repo'd. And if no one pays back loans, lends don't lend.

Isn't this the broad logic behind student loans not be dischargable already?

I don't think the current US system is correct. But I think there needs to be some balance rather than just never being dischargable.

Some of the "equity" based models offered by a few places (where you pay a percentage of income for X years) seem better to me. Or at least suitable in some cases.

> Surely no one will get a loan because as soon as you pay your last fee, you can declare bankruptcy?

Well, no because there are lots of incentives for the people who could pay to not declare bankruptcy, because bankruptcy has adverse impacts on employability, housing, etc. And with income contingent repayment available on federal loans, pretty much everyone can stay in good standing with them (people don't, but that's mostly servicers trying to get people not to take available income contingent plans.)

Also, the main lender is the federal government (since other , who lends because that's what the law says they do. The already narrow space of private student loans might narrow a bit further with easier dischargeability, but that’s about it.

> Isn't this the broad logic behind student loans not be dischargable already?

IIRC, private, non-federally-guaranteed student lending was trending upward, with no graduate-and-declare-bankruptcy trend when limited dischargeability for such loans was adopted, so, to the extent it was the justification it wasn’t factually justified, just an excuse for a financial services industry subsidy. (IIRC, it was later displaced somewhat by expanded federally-guaranteed lensing then hit a sharp cliff around the 2009 financial crisis.)

And for federally-guaranteed loans, private lenders have been excluded for many years, as private federally-guaranteed loans have been replaced with exclusively direct federal loans, and when therr was private lending they had federal guarantees, so encouraging lenders isn't a factor in that space, either.

> Some of the "equity" based models offered by a few places (where you pay a percentage of income for X years) seem better to me.

Those seem to a strictly-worse variation of the income-based plans already available for federal loans.

Waste seems like a strong word. The career isnt the only reason to learn things

I think immigration laws play a big role too, a lot of people seem to use a masters as a way of getting a visa - I believe having a masters improves the chances of getting an H1-B, and also being in school in the US makes it much easier to apply to US companies.

Yes, having government involved always creates inflation. It's no coincidence that the two areas with most government involvement, education and health care, are the things that have outpaced every other measure of inflation significantly.

> Yes, having government involved always creates inflation.

No it doesn't.

> It's no coincidence that the two areas with most government involvement, education and health care, are the things that have outpaced every other measure of inflation significantly.

The government is less (EDIT: more) involved (proportionate to total expenditures in the domain) in healthcare lots of places outside the US without equal, much less greater, healthcare inflation.

It is the manner, not the mere fact of government involvement that produces inflation.

It sounds like you’re saying that places with less government involvement have less healthcare inflation - isn’t what the comment you are replying to is arguing?

> It sounds like you’re saying that places with less government involvement have less healthcare inflation

Yeah, it did; that was an error.

I think your point is respectfully very American.

Here in the UK we have some the cheapest healthcare in the western world with a nationalised system.

I actually agree that the US government often causes inflation. But that's because everyone in the states seems to love government subsidies and no one in the states likes regulation, price control, etc. Whether you're a government or not, subsidising X without regulating consumption or controlling the prices of X will lead to inflation...

An example of what I'm talking about is American high school. State schools have much lower prices per kid than private. Because the state starts with a fixed budget and works from there. Imagine if instead government required "education insurance" like health insurance. And insurers were required to pay for anything the teacher decided was required...

The success of the more socialized approaches to healthcare relative to the partially-private US approach suggest we need more government involvement in healthcare. Much cheaper, better outcomes, more people covered.

And let's not forget housing. (Our government) making large loans more available and cheaper drives up demand for the intended goods/services. That, naturally, drives up price.

It's difficult to understand why so many people advocate for even more government "intervention" (i.e., do more to increase the availability and cost of loans).

Of course in both cases this is only true in the US.

My 4 year bachelor's degree in Australia still cost me $60000. I'm still not convinced it was worth it

I was surprised to hear this, I had thought it was about 30k

Found a per-year table, appears to depend on what degree topic https://student.unsw.edu.au/fees-student-contribution-rates

A 4year engineering degree (likely what the HN crowd is interested in) is about A$32k / US$24k

Whereas law/commerce/medicine is A$60k

plus lost wages for four years.

The problem is that "government involvement" in the US is synonymous with "throw money at the problem." It's a easy way to get results in the short term, so which gets you political approval, but in the long term, it just creates a money black hole.

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