You and I are the bank, these loans are federal, no private bank is giving these loans out, you and I are and we are footing the bill when the natural default occurs

Private banks are giving the loans out. When they do, they keep the interest, but shovel the default risk onto the treasury without paying them to do it.

The Dep't of Education also gives out direct federal loans and grants, and sometimes those private banks service those loans, but federal financing is now not quite enough to pay for a whole degree, so private loans are filling the gap, at greater expense to the students.

I agree that our student loans are junk and need a revamp, but if banks only loaned for the rate of return of a job, we'd have engineers and no one else. There is something to said for having artists and philosophers are "useless" as their degrees are perceived to be.

> if banks only loaned for the rate of return of a job, we'd have engineers and no one else.

But is it really worse than the current situation - where people borrow to study something enlightening but economically questionable, and then struggle for decades as they can't pay the debts nor declare bankruptcy?

I agree that studying arts is worthwhile, both for the individual and society as a whole. But there has to be someone to tell the 18-year-olds that they can't borrow $100k for it, or they are making things worse for themselves.

Perhaps if banks adjusted loan amounts to potential future income, then arts faculties will be forced to lower tuition fees. And some students will correctly see that they just can't afford it - better to discover that before starting instead of after graduation.

No need to go to expensive university to be an artist or philosopher, especially if one acknowledges that probably noone would hire you for that. And considering the major/minor setup in US education, you could always major in something that is in demand, and minor in philosophy. Unless one believes that one needs to be pained to make art or thoughtful critique, I think we might get more of it if people were less burdened by student debt.

The idea here is that there is a feedback system causing the price of tuition to go up. Banks can lend at little risk and schools can charge a lot because students can get loans.

The hypothesis is that if students can't get the loans then the schools can't charge as much and have to become leaner. Combine this with a social change in perception of "you need to go to college to be successful" and I think the idea has merits. Simplified and not the full answer, but it definitely has merits.

But when an artist goes 100k in debt, we don't get an artist. We get a desperate barista.

Completely agree. I don't think banks should be operating like they do now. It's almost charitable in how it works. Banks, who are driven by profit, give out these loans at a massive risk.

I stand by my point because banks shouldn't be in this position. People aren't companies and they shouldn't be looked at in terms of returns. I (and this is my completely personal opinion) think either education should be free or only the government should provide education assistance.

I couldn't agree more, but should credit hours cost the same for engineering vs the arts? Could programs be 2 years instead of 4? I don't understand why we try to put education in this one size fits all bucket. The goal should be to provide more access to education at a lower cost. That is the deliverable we should be striving for IMO

That’s a great way to cut people from disadvantaged backgrounds out of college degrees, and therefore social mobility.

Which disadvantaged?

The smart person who is born poor or a minority will do just fine as their grades will carry them. Thus a bank should give them a loan - based on their high school report card.

The "stupid" person regardless of background is unlikely to do well and should not get a loan.

> The smart person who is born poor or a minority will do just fine as their grades will carry them.

Spoken exactly like someone who was not poor and not a minority.

Being poor creates a network effect of issues that can keep VERY smart kids down for a long time. Being poor and having all of your relatives be poor too means you have no mentor network and very few ways out. Being poor with poor parents that are working three jobs just to afford food and shelter or aren’t working because they’ve given up (or were given up on) means that your most direct line of support is pretty much absent and that you are on your own. Very few kids make it out of this situation.

It is a very hard problem to fix.

If you WERE poor and a minority and are saying this, then you should DEFINITELY know that you were an aberration.

I agree. However college will not fix the problems those people face.

I don’t think that banks should solely be in charge of who gets a chance in this country. Furthermore the myth of the good grades regardless of home life is just not realistic in my experience- many people need to grow into adulthood later because of instability, malnutrition, or the ability of the school they went to to prepare them for standardized testing.

I agree with all the objections you place. However those are different problems. Putting somebody in college from that situation will not help them. We need to give them a way better, admitting they will never be well educated, but they can bring their children to that level with the right support.

Note, this comment applies to the other poster as well.

I agree fully, and as I commented above, I don't personally believe this is a place for banks to be for that reason. It's shoehorning a profit-focused entity almost as a charity in my eyes. It incentivizes banks to go after borrowers as if they were a failed business when in reality they're just trying to improve themselves (which is good for all of us).