A fairer option for all would be a flat graduate tax where all graduates pay x% of their earnings over a threshol.
You must take into account the potential capital income they lost and paying the risk of not getting well paying job from their own purse. If the government substituted loan has little lower rate than market rate, the choice between taking a loan versus paying it beforehand can be neutral or close to neutral.
>Anyone who can afford to pay them back early (high earning graduates) end up saving.
Isn't that a good thing? Aligning the incentives of the lender and the borrower.
Sweden also has free tuition, and small living stipends for all (in my time it basically covered rent and nothing else), so your student debt is only for living expenses. I had classmates who took on no student debt by working all summer and living frugally.
Seriously what the hell is wrong with HN?
Do you really think the vast majority people are this greedy and short sighted at their own expense?
Political argumentation using moralizing negative or positive use cases without any attempt to quantify them can be very harmful.
The real question is if positives outweigh the negatives.
For example, is 2 to 5 ratio of misuse's vs. honestly can't pay too much? If we prevent two cases of misuse but five people have their life ruined because various unseen reasons, is it a good deal?
After person graduates, they must use x percent of their income to pay student debt. In this way the student avoids the debt trap in the case of unemployment, or personal difficulties. Some may be able to pay the debt, some may not, but it's the government that shares the risk and has stake in seeing people getting the education they need.
Implementation can happen trough government either guarantees for the loan or direct loans from the government.
I think Sweden has this kind of system.