In Canada, the vast majority of student loans are taken out directly from the government. You can't declare bankruptcy on a government-issued student loan until seven years after the last day you were a full-time student. After the seven year timer runs out, it's treated the same as any other unsecured debt and you can include it in a bankruptcy (equivalent to a Chapter 7 in the US) or a consumer proposal (equivalent to a Chapter 13 in the US).

Private student loans also exist, but unlike government loans they have no special protection - you can go bankrupt on them just like any other type of unsecured debt at any time. For this reason, private lenders almost always require a cosigner for these types of loans.

... federal student loans, which are the largest single source of college debt, representing more than 92 percent of outstanding student loan balances.

https://www.americanprogress.org/issues/education-postsecond...

The way federal student loans work right now (auto-approved at high interest rates with no cap or restrictions on degree program) basically ensured a generation of Americans were bound to wage-slavery.

https://www.pbs.org/wnet/need-to-know/opinion/wells-fargo-se...

That was the instance they were caught for mortgages, but it's happened infamously and recently in auto loans, farm loans, and business loans also. It's unlikely that covert discrimination wouldn't then extend to student loans.

While that likely phenomenon is hidden, what does happen out in the open is that interest rates are higher for people who live in majority-black neighborhoods, which also correlates to a higher default rate. That means one of two things. The intent could be to discriminate against black people by suffusing the loan terms with America's general distrust of black people (and considering the history of racism in lending across all loan types, I don't doubt that this is the case). Alternatively, non-black people in majority-black neighborhoods might be subject to the same high rates; in that case, direct discrimination isn't taking place, but it shows that the banks are setting rates knowing that they'll result in higher interest payments and defaults.

Unfortunately, there's no way to know because the banks refuse to reveal their formulas or allow matched pair testing.

That's also why Obamacare had to be this rube goldberg public/private complication.

https://studentaid.gov/

Since we only have selfish humans, they'll always work for their own good - whether it's profit motive in an open market, or political power and attached financial benefits.

Jeez, imagine how easy society would be if we could actually create government programs 'purely for the public good'. I'd love to live in a world where everything didn't become as corrupt as it structurally can.

It's ironic that in much of the world this is the case. Specifically, in this thread the Canadian system was mentioned and the Australian system is similar.

I'm not one to toot on the SJW train, but it's likely inefficient (and certainly unjust) if we encode existing economic biases into our primary method of access to educational capital.

I'm really sad that in this view, access to credit is equated to access to education. Sure, in a first degree thinking the goal is achieved, but at the end of the day education is a means to an end rather than an end in itself. Lending people money to attend unaffordable institutions can't be the best way to fix the problem.

Not if loan terms aren't designed to court default, which they often seem to be. Doesn't it seem backwards to require that the people least likely to be able to pay, pay higher interest rates?

I mean, yes. But on the other hand if the ability to payback the loan (risk of default) isn't taken into account these loans might not exist at all (not necessarily a bad thing). Eventually the risk-adjusted rate hits usury limits and loans start disappearing.

(Of course we still get things like payday loans, credit cards, student loans, etc., but these are legal loopholes that should be closed.)

Went in state,

lived at home (commuted 2-2.5~ hours twice a day)

lived cheap (no real spending outside of school bills)

Had scholarships which knocked off 50% of the sticker price.

After all that, and the high interest rates at the time on my initial loans it was north of 200k.

My parents helped with food and rent (living at home) but everything else I took a loan off.

I considered my loans heavily predatory and wish I could have done things differently.

Comparing that to my alma mater (Johns Hopkins), a private university, your loans work out to more than my total cost for tuition for four years (2004-2008). Even looking up their current rates, the average four year tuition after student aid is ~130k. Without any student aid, it hits ~$200k.

Go to public schools, live at home, get out with little debt. It's really not a difficult choice, and it gets even easier if you know about the existence of community colleges.

Stop anchoring impressionable kids to ridiculous tuition numbers.

Edit: the highest average in-state tuition is Vermont with just over $17k. If you're willing to go to a state school, you can do it for under $80k for 4 years.

https://research.collegeboard.org/trends/college-pricing/fig...

Granted I should have went to a community college to get my basic classes sorted out.

But being a first generation immigrant and the first to go to college I had little guidance and a high pressure to appease my parents.

At the same time they could not make any payments on my behalf but also did not allow me to go to community college either.

Some would say I should have been smarter, but my parents were sold the "American Dream",

I was forced to foot the bill :)

Really this would have been great to know from my high school advisor to be able to convince my parents to let me consider other types of universities.

That wouldn't make much sense, many students aren't accepted into a major until a year or two into their education.

"Intended major" would also be a poor choice, as I think we all know many people who intended to go into one field and ended up in a completely different one.

Someone else is lending you the money, they can add any strings they want.

Banks deny mortgages for problems with homes all the time. You aren’t able to swap in a different house after the bank approves it.

Not sure how that ended for him, but hopefully poorly?

(The program was originated as that state didn't have a NucE program, so found it cheaper to pay them to go somewhere else than run its own)

I've got no sympathy for someone who deliberately makes unethical choices.

I'm not sure what this has to do with anything I said.

If you're referring to my second statement, I met many people in school who intended to go into engineering or computer science or medicine and had to change their career path once it was clear they weren't going to make it through the first year of introductory classes. I doubt I was alone in seeing that happen.

In theory, non-dischargeability should be _increasing_ pressure on students to choose majors that are worth the monetary investment, no? I guess perhaps your point is that successful insurance companies would be better positioned to make this assessment, but I'm not sure that's true: a student and his advisors/parents have a lot more relevant information about which major they in particular would be most productive in, along with access to the prior for how productive a given major is on average.

Eg, my parents REALLY wanted me to be a doctor, but I knew I'd find medical education intensely boring and unchallenging. Ostensibly, going into medicine may have been more conducive to loan repayment than getting a math degree (and CS, added later), but I had the inside information to know that, if anything, I'd have a tiny (but nonzero) chances of failing to finish a medical education for sheer lack of work ethic. That's the kind of case-by-case information that's not available to insurance companies. If my parents had an incomplete picture of how degree choice played into my loan repayment, an insurance company would be way worse off as compared to our collective decision.

> specifically because 18 year old don’t make good decisions.

I'm sympathetic to this argument because there are _some_ 18 year olds making these huge decisions without any reasonable guidance, but for a big chunk of the population, we're talking about 18 y/os + their parents + their college counselors.

And I'm also not claiming it's black-and-white: people (even adults) do very stupid things all the time, so it may be rational to have insurance cos bear part of the responsibility for measuring risk of a given student trying for a given degree. But

1) Given the extremely asymmetric information, this is an extremely blunt instrument, which will lead to countless hot takes about seemingly-ludicrous-but-inevitable false positives and negatives where a student is charged an absurd rate for something that makes sense in his case

2) It's simply not accurate to claim, as GP comment did, that the market influence is being removed: it's just being shifted from insurance co to student+advisors (who again, is much more equipped from an informational perspective to make this call)