Posted on 03/13/2018 6:41:30 AM PDT by Twotone
UNC may have Professor Mike Adams, UNC–Wilimington, to thank for much of this. And it only took him 20 years of online ridicule of UNC’s femnazi, PC culture and a 7-year lawsuit to gain tenure denied because he is a Christian and a conservative.
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Bump to your post. I remember reading a couple of his articles here on FR.
He is a real patriot. Kaslin has the ping list to his articles.
Not necessarily.
Student loans are currently dischargeable in bankruptcy. Not easily, though. Yet most students pay back their loans.
What I'm proposing is that if a student graduates, and is unable to earn enough to pay his loans, then the college is on the hook -- they've effectively retroactively awarded a full scholarship. This would make colleges more selective about who they allow in, limiting to people they are reasonably confident will go on to earn a living. It will also result in colleges clamping down on student loans being issued to cover anything but tuition and books.
Not necessarily? Do you know anything about lending?
I know enough that every loan has some degree of default risk. And yet lenders still lend.
In a healthy market, they prefer to lend to the people most likely to pay back the loans. In an unhealthy market, they lend to people with high default risk, if they think the government will bail them out of the bad loans.
Figure that with those borrowers, you've got the highest risk. I predict that within ten years student loans will carry a 25% interest rate.
No student can afford that, so...
You are describing what we have now. College loans are not secured by any asset other than the future earnings of the student himself. College loans NOW are dischargeable in bankruptcy (although not as easily as other debts).
The ONE SIGNIFICANT DIFFERENCE that I am proposing, is that colleges be required to co-sign, so that IF the student goes bankrupt, then the college is liable to the lender. This would REDUCE credit risk, and thus REDUCE interest rates from the lender.
From the college side, putting some financial risk upon the college would result in the college only co-signing for people they expect will graduate and get a good job. This will result in the exclusion of people who have no business going to college, and the closure of majors with a high default rate (eg, the various "_____ studies" majors).
RARELY would be more accurate.
The fact that student debt isn't easily discharged affects the interest rate. Change that and you move the interest rate.
Any recent graduate would be able to show financial hardship.
I agree that institutions should share some part of the consequence of loan default. What would that look like in the real world?
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