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throwaway5959

Imagine if people tried to do that with their student loan debt.

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I imagine that if it worked, nobody would be able to get a student loan after that.

That’s not how anything works.

At the very least, interest rates and selectivity would go way up.

The current situation is basically the government saying "it's a net positive if everyone willing to do so learns something, however unsuitable they are and useless what they learn", by guaranteeing repayments for low income graduates.

That’s an incredibly uncharitable take.

Is it untrue though? Higher education used to be paid by the state for the brightest few, the rest just didn't have an option to pursue it. Some countries tried to forecast how many engineers/doctors they'd need and ensure there are enough state-paid spots in the respective schools, not sure if the US ever did that.

Now it's pretty much available to anyone, you can bet your future income to your Egyptology study and the state still backs your loan in case you can't ever earn a decent wage.

Unlike a medical bankruptcy it's not an accident that your studies aren't making you profit, unlike a home loan your knowledge can't be repossessed.

You post-bankruptcy earnings would still benefit from your education, it's like keeping your collateral through the bankruptcy and then using it to earn money.

Got a point there or just complaints?

Since there is no way to determine what fringe studies will become important it is beneficial to have as many people highly educated in as many disciplines as possible. State guaranteed education loans accomplished this. The same people also refused to address the perverse incentives opting to allow corruption, fraud, and waste to become endemic in higher education. Now I don’t want to be uncharitable, fraud, waste, and corruption are rampant across America and increases the closer one gets to vast hoards of wealth or cash.

Of course it does. Why do you think 20-something’s with no income or assets can get tens of thousands of unsecure debt at low interest rates?

If suddenly it was easy to not pay it back, lenders simply wouldn’t let them borrow to begin with.

So what did they do before 2005?

It's always been difficult to discharge student loan debt in bankruptcy going back to the 1970s, and becoming increasingly strict with time. Before then, tuitions were much lower.

i failed to get student loans because my mother still owed everything she borrowed for her student loans, plus interest. She never paid a cent and died owing that money.

sometimes i am thankful for stupidity in the banking system. there is no way i could have sat still for 4 years at that point in my life. i have my father’s alcoholic rage to thank for not wanting to be at home, and preferring high school. at college the desire to leave home would have been met even if i didn’t attend class.

> She never paid a cent and died owing that money.

and the taxpayer was hit with the liability of that debt, since the lenders are guaranteed by the gov't.

yes, and how is that my fault?

the only taxpayer that was directly affected was me, and I wasn't a taxpayer when the loan was issued.

I don’t think they said it was your fault. And frankly all taxpayers end up having to pay for deadbeats that don’t pay back their student loans, not just you.

Our parents got free/cheap college from the taxpayer, and didn't need loans at all.

I think it's a game of chicken. The nation has a dire need for an educated workforce, but it knows that the workforce can't pay for the education with cash on hand. At the same time, those workers need education to get jobs with living wages. So we have this system of what amounts to a loose form of indentured servitude with onerous, inescapable debt burden.

If that system of debt peonage were stripped away by legislation, I would wager that society would very quickly cobble together some scheme to continue receiving its supply of educated workers.

Tuitions would have to be lowered by a gigantic proportion, which would hit the college administrations / bureaucrats very hard. Their interests are really at the heart of the student loan problem.

Not just administrators - expensive campuses and vanity college football programs (football is a solid money-loser for a firm majority of colleges, according to the NCAA[1]. This is especially apparent when you look at the highest-paid government employees - in nearly every state, it's a college football coach).

[1] https://www.ncaa.org/sports/2019/11/12/finances-of-intercoll...

From the outside that's just weird.

One can argue that attracting scientists and teachers with high wages and expensive toys is beneficial for research and education but it's hard to see how "professional" sports teams factor into that.

AFAIK in any country outside the US university sport teams are little more than hobby clubs for students and make do with little resources. Yet professional sports seem to be fine regardless.

NFL Clubs for example should be able to build up their own youth departments and not outsource it to the public.

Why would a university need a TV-ready football stadium for thousands of spectators with commercial exploitation of players? A "field", a few stands and a hot dog booth seems enough. Go sports team.

Couldn't get that report to run on my phone, but there is an older linked study here that noted 57% of NCAA football programs were profitable: https://christopherlee.com/college-athletics-by-the-number/.

Also, even if the programs themselves aren't profitable that doesn't mean they don't make a net profit to the college through increased admissions. Lots of college students want to go to a school where they can tailgate and watch a football game.

The NCAA also may have an incentive to say that football isn't profitable, historically they have avoided paying athletes.

That doesn’t make sense.

The plan was to pay the claims but to pay them using one bankruptcy court process, which is more streamlined and has no punitive damages, rather than many separate tort processes.

How does that translate to student loans?

I incorporate myself before I become a student loan borrower.

Still makes no sense. You might as well have said “imagine a beowulf cluster of these” or something about Natalie Portman and hot grits.

frist post

Nah man I was frist

Great reply, thanks.

Then the loans would be a much higher interest rate loan, and since the incorporated "student" does not have collateral to secure said loan against, i very much doubt that anyone would lend the money in the first place. Unless the gov't puts in a special guarantee to make the lender whole - aka, the current system.

Aka, you cannot bankrupt yourself out of the loan.

> How does that translate to student loans?

Imagine a world where natural people could get a new alt identity (SSN and name) on demand and transfer some assets/debt to these identifies. I imagine those with student loans they are unwilling/unable to pay off might do transfer the debt to a freshly minted identity and have the doppelganger take the heat while leaving their core identity with a clean credit record and assets (car and house)

If you had read the case, or even just my comment, you’d see that J&J is not trying to get out of paying. They wrote the “badco” subsidiary a $60+ billion funding guarantee. That was the maximum liability of “oldco.”

This analogy is just terrible. I get people want to go to fancy private schools and then not pay, but that’s no reason to shit up entirely unrelated threads.

You've just described synthetic identity fraud.

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