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Comment by brunellus | Hacker News Reader

There’s no need to measure anything. The problem with student loans is qualitative.

Banks are allowed to make unsecured loans and the borrowers can’t usefully declare bankruptcy. Colleges have every reason to raise prices and lenders have no skin in the game.

It isn’t any more complicated, and no amount of data analysis can possibly refute this.

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If data showed that at regional state universities and community colleges the rise in tuition corresponded with the decrease in public funding per student then you wouldn’t believe it? Or that such data would mean nothing to you? Consider the linked article and keep in mind that enrollment in higher Ed has declined since 2008.

https://www.cbpp.org/research/state-budget-and-tax/state-hig...

It’s a good question. I would be interested to know which economic forces drove the price changes.

I suspect that prices could still increase even in spite of public funding decreases due to the point in my original post.

But to me, all of these side effects can be thought of as fruit from a poisonous tree, and thus unjustified.

It hasn’t been “banks” for a decade: Student loans today are overwhelmingly supplied directly by the federal Department of Education. That’s why a huge jubilee is even plausible.

My original argument still stands.

And the government was perfectly capable of bailing out private companies at the end of Bush Jr’s second term.

Of course and there's no reason to refute this. The reason we got here is that the quantatative measures a Bank would use are biased by actual societal bias. This is a situation like asking why your ML became racist.

Letting a bank choose the interest rate based on your zip code would allow banks to predict which families will remain rich and that would be a self fulfilling continuation of current class distinctions in a system where they are allowed to do that.

so change the bankruptcy laws. that doesn't require forgiving the loans.

This is the correct answer. Personal bankruptcy is the tool developed and refined for over a century to address exactly this problem.

It should surprise nobody that the banking interests (and industry-adjacent politicians) who pushed so hard for student debtors to be uniquely deprived of their right to shed their debt through the courts are now pushing for taxpayers to repay their unsecured loans.

Again, the banks are almost totally disinterested at this point. The only entity significantly on the hook for these unsecured loans is the taxpayer, via the Department of Education which issued them directly to students.

Great, then it should be easy to fix the law now, right?

Fix the law to do what? The proposal under discussion is to hand $50k to doctors, lawyers, and MBA’s (among others, of course) under the guise of fairness.

You stated that "the banks are almost totally disinterested at this point." My facetious response was just a cheeky way to propose that if your statement is not utter bullshit, then there should be very little opposition from the credit industry to legislation such as the FRESH START act. I guess we'll see soon enough.

I really have no idea what you’re suggesting. What’s the “credit industry” (now not the banks?) role here?

I'm using "credit industry" to distinguish the private-market credit services industry from federal servicers of student loan debt. Your assertion was that the "banks" (which appears to be your shorthand for the same thing) are "almost totally disinterested at this point." I'm saying that smells a little fishy, since the "banks" have generally opposed reforming the restrictions on discharging student loan debt through bankruptcy since they were enacted by congress in 2005. That's it, that's all I'm saying.

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