Hacker News Reader

Comment by bcatanzaro | Hacker News Reader

I think this system would be greatly improved if the universities sponsoring this debt (and profiting from it) had some skin in the game. If the universities suffered financially when their former students did, they would get much wiser about how they encourage students to take on debt, and they would stop inflating their costs to match all the subsidies we provide.

I think the modern university business model is predatory and needs to be regulated.

View on HN

Tying loan repayment to a percentage of income is a good idea. Under a certain amount you pay nothing, over that you pay 5-10% annually.

This realigns the loan companies to make investments with the students vs. selling them a presidigous ego degree with no real value in the market place.

If there is anything governments ought to do, it’s to help align the interests of all parties Via creative legislation.

This exists in a couple of different forms on government student loans (Income Contingent Repayment for example), but it's the government that takes the hit, not the university. The university's incentive is to talk about the benefits of a well-rounded education, and I agree with that (One of my majors was Philosophy), but for a university to take what is now exceeding $100/hr of instruction on credit, for years on end, with no reasonable hope of hardship-free repayment sounds like Scientology or some other cult.

It's a simple enough solution...

X = average starting salary for degree

Y = some predetermined payback period for student loan

Z = some acceptable percentage of income to put towards student loan

X * Y * Z = max available student loan for your degree track

I think it might be far, far simpler to simply demand that it's forbidden to give anyone loans with balloon payments, like student loans.

Clearly too many people cannot be trusted with the decision these loans require.

This article is filled with statement after statement after statement showing that it's somehow wrong to require a person to predict the consequences of their actions, or expect them to take it into account, like the oft-cited learning another job, or just ... not getting a loan.

Having to pay premiums from the second you have a loan would at least make the consequences extremely obvious.

Government intervention, in the form of easily accessible student loans, is a huge part of what brought us here.

why is everyone blaming the government and universities? in what sane universe do people see the student loan crisis we have, and google starting incomes for their degrees and still decide to get massive loans for majors which don’t pay much? do people themselves deserve no blame or is it all someone else’s fault?

The universities keep increasing cost of tuition way above the inflation rate in order to pay for increasing numbers of non-teaching administrators and fringe services like activities for students and sports facilities. The universities are the ones who are increasing tuition rates to better market themselves to future students.

The government, by way of elected leaders, promise increasing amounts of loans to college students under the guise of helping these students access increasingly costly schools of higher education, yet they are really just buying future votes (see, I made it easy for you to get someone else to give you a gigantic loan for a 4-year vacation! Now, vote for me again so I can try to forgive your debts, a la Bernie Sanders).

We also blame the banks for 2008, when by far the largest responsibility (in total $ liability) lies with ordinary Americans taking "balloon payment" loans to pay for houses they couldn't afford.

It's not all someone else's fault, but the people who are making those decisions are very young and easy to exploit.

they are young but:

1. They have parents which should know better. (especially when cosigning loans).

2. They dont have to go to the most expensive school. I could have gone to a much more expensive school like NYU or USC but chose to go to a UC because thats what my family could afford and I didn't want 100k in loans.

OR allow student loans to be discharged in bankruptcy - that would give the schools a hell of an incentive to not ship overtly-debt-addled peeps into the workforce.

https://www.wsj.com/articles/more-than-40-of-student-borrowe...

So $200 billion.

Assuming this doesn't double or triple when you announce the rule changes, that's 6% extra taxes to pay, per year.

Realistically, you'd expect this to double in the beginning, then rapidly taper off. So that would mean 10% extra in income and payroll taxes (and 10% higher corp tax, and all imported goods 10% rise in price), then dropping to, say, a 3% rate that lasts indefinitely.

I'm pretty sure people are in universal agreement that this is too high a cost.

Again, the universities aren't the ones originating the loans, it's the taxpayer. The universities would have already gotten their payment.

And unlike capital resources, the originator isn't able to come after the borrower and take their education away since it's inside the brain.

This is a great idea.

Reply on news.ycombinator.com