Hacker News Reader

Comment by eru | Hacker News Reader

You can just make college more expensive, that should punish 'defecting' all by itself.

My favourite policy suggestion for that: make it so that student loans can be discharged in a bankruptcy like any other loan. (Or more precisely, new student loans taken on after the new policy takes effect. No retro-active loan forgiveness.)

It's my favourite policy suggestion, because it's a common populist complaint that student loans stay with you forever. So my suggestion looks like it's giving in to that populist sentiment.

What is actually does: most students have no assets just after graduation, so bankruptcy is 'free' for them. Thus lenders can't count on getting the loans repaid, and thus won't loan as freely. Cutting off the spigot of student loan money will bring down the price of education.

View on HN

but the source lender is the US government, which is awful at adjusting to market economics, and would likely require legislation to slow(?) down lending. How would you convince these populists to support this (not very sneaky) legislation?

reducing money flowing into higher education industry would reduce overall education levels of the population. I don’t think you really want the population to be less educated. Go see what life is like in places with lower levels of education. College is expensive for those people. You don’t want that.

Germany, for example, has much less money flowing into education than the US. They seem plenty educated enough to me.

Germany spends roughly the same annually through post-secondary (normalized by total population) and that amounts to a higher percentage of GDP to support a lower per capita student count at all grade levels. They do have a lower population and thus lower absolute spending, but that shouldn't be relevant.

Interesting. What are your sources?

What kind of spending are you talking about? Total spending (both private and public), or just official government spending?

I agree that all comparisons should be done on a per capita basis or as a proportion of GDP.

Given that we know that there can be multiple types of intelligence and that college only tests a small fraction of those types - are you comfortable with this binary framing? That the only way to go is up (in years of education)? There's no alternate model, different framing, etc. to educating a populace outside of these two choices?

Please - let's approach this question with an open mind - there are plenty of alternative approaches worth considering just from other parts of the globe.

Why would anyone not immediately declare bankruptcy upon graduation under this model?

Because under this model nobody would make student loans.

That doesn't seem to happen in other jurisdictions where student loans are dischargable in bankruptcy.

Presumably people don't do that because having a bankruptcy on your record comes with consequences. It might even disqualify you from persuing certain careers.

Well, the point of my suggestion was to discourage student loans. Exactly as https://news.ycombinator.com/item?id=36626179 points out.

bankruptcy stays on your credit report for 7 years iirc. that's a long time to get denied (or approved with terrible terms) for credit cards, auto loans, mortgages, etc.

if you have a reasonable student loan balance and a solid job offer (maybe you got a stem degree from a public university), it would still be much better to make payments and have access to other credit.

7 years of being unable to finance a home purchase and having to pay cash or a huge down payment to get a car, but in exchange my entire college education is free?

Which is realistically a worst case scenario because there will always be someone who will try to figure out how to correctly evaluate the lending risk of people who are all equally handed free money and thus for whom the bankruptcy signal doesn't differentiate much.

And as a fresh college graduate I'm necessarily the most mobile I will likely ever be in my life, with no kids yet and maximum disposable income relative to my needs at this time of young adulthood, thus unlikely to be able or interested in looking for a settle-down home anyway for several years?

better believe I'll take that deal, or I would if I was back in that age group and stage of life.

it's only a no-brainer if you went to an expensive school or have low expectations for your career in your 20s.

total in-state tuition for a four year degree is ~$40k. that's not nothing, but at least for me, getting that wiped out in exchange for no house, driving a shitbox to work, and even getting extra scrutiny on rental applications would not have been a good start to my 20s.

if I went to a private school, wanted to be a teacher, etc, the calculus might be different.

Sounds like you have a pretty good bargain going wherever you are, because here in California as a resident, a four-year degree even at a state school like the UC is going to run 65k and that's without housing or expenses. Books, supplies, and lab materials alone can add another 12 grand to that over the course of a 4y degree. If you're going to pursue a master's then you can almost double that. And double it again if you're not a resident or are going to a private school of comparable repute.

Obviously there's the option of a less expensive State School like one of the CSUS or a Cal Poly, as well as clever short circuiting of the tuition by taking Community College equivalents where possible but if you're going to get everything forgiven at the end of college then why bother with all that.

Reply on news.ycombinator.com