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Comment by ronsor | Hacker News Reader

Student loans are primarily targeted at an audience that is 16-18 years old. I'd argue this is inherently predatory.

The government should simply stop protecting student loan debt from being discharged in bankruptcy. Then lenders will have to take responsibility for their lending actions, universities will have to lower tuition due to less "free" money, and students will have to be more careful with what field they choose.

Obviously students shouldn't be pursuing degrees that won't result in a well-paying job, but the lenders are still partially responsible. After all, if you ask a bank for a business loan with a stupid idea, the bank won't give you money, because they know they'll probably lose it. I don't know why it's different with education.

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There’s some truth in the “obviously” part of what you say, but it’s important to note that it’s both the degree and the institution that can be of variable worth.

Every so often, politicians re-invent the facile idea that Art degree bad, BioTech degree good but it’s the long tail of junk Universities that are the real problem.

I know someone from Goldman Sachs with a degree in Anthropology, a barrister with a degree in Norse History, and a COO with a degree in Sociology*. They have all had extraordinarily high flying careers that are seemingly unrelated to what they read at University until you know they went to Harvard, Oxford, and Cambridge.

Maybe those are too exceptional though? Should we shut down the worst schools, accept that you can study anything at the best schools, and then insist that everyone in the middle study only Economically Important, vocational subjects decreed to be Of Use by the technocrats? Seems a bit bleak.

*Gender Studies, no less, a favourite punching bag of the ignorant.

> They have all had extraordinarily high flying careers that are seemingly unrelated to what they read at University until you know they went to Harvard, Oxford, and Cambridge

Yes while were at it, we should somehow address the nepotism network effect of universities

There's something very sick in pretending the value of the degree or the institution is related to success when it's really just how much those things let you access people connected to capital

Especially since you have to have access to capital to even attend such schools, with few exceptions

Those people got there because their undergrad topic had nothing to do with it. It was their general intelligence, aptitudes and connections.

> primarily targeted at an audience that is 16-18 years old

Citation needed. I’d be shocked if the large majority of people taking out student loans aren’t over 18. And even if they are 18 when they take out their first one, they’re well over that as they continue to take them out for years.

That isn’t to say they aren’t predatory. But you don’t need to fudge the numbers to make your point seem stronger.

On another note, if anyone should be answering for these predatory practices it’s universities, not tax payers. They abuse the fact that student loans are government assured by upping tuition to absurd rates. Fuck them and their greed. Punish them for it, not everyone. I made it through college by going to a cheap university and working. My degree doesn’t carry the weight of someone who went to an absurdly expensive school, even if we got the same degree. Now I’m expected to pay for their degree after already paying for mine? Fuck that.

> They abuse the fact that student loans are government assured by upping tuition to absurd rates.

This is basic market economics and something that everyone predicted would happen. If you think that somehow colleges are going to be the moral exception then I'm sorry it's just not happening.

This is squarely on the government for making student loan debt impossible to get out of. Its caused a gross cycle of stupid practices and serves absolutely no good.

My original point was that you took the debt you should pay it back. Especially when it comes to taxpayer funded or backed loans. This isn’t like a house where it depreciates and some value can be extracted through a foreclosure or short sale. It a full or partial education that has intrinsic value. The only recourse is to force repayment.

There are plenty of loans where the original principal is never recovered to any reasonable amount and the vast majority of the loan is forgiven. It's literally how debt collection works, mostly attempting to get SOMETHING from the original debtor.

Forcing full repayment is absurd, and known to be by just about every reasonable person who's looked into the economics of loans. We figured out debtors prisons were also stupid a long time ago. There's plenty of alternative measures, and the whole reason things like bankruptcy exists is because we recognize it's better than financially nuking someone.

Or do you think we should also make medical debt unforgivable since you can't rip the kidney back out?

This ignores history to a great extent.

There was a period of time, from 1945-1974, when the population did not largely rely on student loans (which were introduced in 1965 via Title IV if the HEA act) because they were both harder to get and had stricter rules on how they were marketed, they simply were not prevalent.

Yet, in this era of tax funds actually funding most university educations, many of those same “bullshit” majors existed and people graduated with them, and yet the entire world didn’t spin out of control and people didn’t suddenly have an inability to pay their debts or otherwise struggle simply based on their major choice.

I posit then, that the issue at heart isn’t the chosen major so much as the system in which university students largely exist in, which has become financially predatory to both students and their parents

>The government should simply stop protecting student loan debt from being discharged in bankruptcy. Then lenders will have to take responsibility for their lending actions [...]

You realize that in the overwhelming majority of cases, "lenders" means the federal government? In other words it's going to be the taxpayers who will be suffering the losses, not some wall st bank.

Yes, I'm aware of that.

Mind you a lot of people still aren't paying, and we've already had deferrals. It doesn't matter if "XYZ owes $100k" is on the books if it's never going to get paid. We may as well formally eat the losses now, because we're already doing so unofficially. It's the only way to actually move forward.

Oh no! The great nation would be financing higher education of its citizen! Unacceptable!

If a similar amount of education can be obtained at a lower price, then it’s not really education that’s being financed but something else. (I would argue that it’s university administrators, shiny buildings and unnecessary facilities).

I fully agree - add to this interests on student loans (-> banks). So let's push it further and affirm that the government should not only finance but _regulate_ the education market.

I'd lump that into the broad category of the government protecting student loans.

The government really has no business playing a role in financing consumer debt, whether we're talking about students loans or mortgages. The fact that the government does finance loans artificially decreases the perceived risk of the loans because its reasonable to assume the government just won't let the loans fail.

> The government should simply stop protecting student loan debt from being discharged in bankruptcy. Then lenders will have to take responsibility for their lending actions, universities will have to lower tuition due to less "free" money, and students will have to be more careful with what field they choose.

This would mostly mean the end of student loans entirely. I don't disagree with the approach, but we should be aware of the tradeoff.

No, it would be the end of student loans for shit degrees that don’t end up giving the student a career. Doctors, lawyers, engineers, etc.. will still be able to easily get degrees. And the universities will have to lower tuition for those other non-marketable degrees, as they should.

But the data shows even 'shit' degrees still have lower unemployment rate and better prospects overall compared to no degree.

It’s almost like those people should have stopped at the Associate Degree level to better themselves. That’s one of the benefits of higher education beyond High School.

People don’t go for a college degree to “better themselves” in an educational sense. they go because any job that pays a worthwhile salary requires minimum a bachelors.

Hell most job posting for our field requires a bachelors even though you can completely learn it online

“Before 1976 student loans were dischargeable in bankruptcy like other unsecured loans.” - Wikipedia

And there was a lot less dollars loaned, at much higher interest rates, because an unsecured loan to a young adult with no assets is a lot more likely to default than most other debt.

Another effect: universities would be recentered on learning, instead of being four year resorts kids go to because it's what you're supposed to do and they don't know what else to do.

Students don't need fancy rock climbing walls and tuition funded orientation parties, and they certainly don't need armies of administrators and deans. They can learn a semester's worth of knowledge for $100 in supplies (if that!), a living wage for professors and TAs, and room and board.

I hear what you are saying on the amenities. But the kids need something to do while there.

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