> and thanks to swift inflation, the debt burden is melting as we speak
Tough luck, that is true for everyone having monetary capital. Mostly people without the means to strategically invest. Sure, they are bit better off than those living from paycheck to paycheck.
I think the argument against education due to degree inflation doesn't have the correct goal. Sure, more people would have degrees and perhaps there is an inflation. This is without consequence while higher education does have tangible benefits. The author confirms that these arguments are already blowing in his face.
I would recommend that the author takes a look at other countries without education that costly. We live in the 21st century, the logistics of information have changed and spreading it takes fewer efforts.
It is certainly unfair to those that did need to pay their loans and those that granted them with the belief that they will get the money back at some point. The state really cannot really expropriate their loans as far as I understand it.
> and those that granted them with the belief that they will get the money back at some point
Most people who loan money factor in the chance that the money won't be paid back, for example, if the person who took out the loan files for bankruptcy.
The reason this isn't done is because the obvious play is for a student with no assets to take the loans, get a degree, declare bankruptcy, and cruise out the next 7 years with a better paying job - it's not like they'll be ready to afford anything they'd need financing for anyway.
The problem of course is that the fix flips it the other way: student loan debt is functionally the safest possible debt because it can't be discharged through bankruptcy. Loan someone any amount of money, and provided you estimate their net productivity over their life accurately, you'll get your money back.
In isolation all of this sounds somewhat justifiable, but in the real world the results are disastrous: students are gate kept from higher income by getting a degree in a serious way, so they take on this undischargeable debt which people are happy to keep lending, so there's never any counter-pressure to colleges raising tuition rates, and government can say "everything is fine! Look at these enrollment numbers not changing!"
> In isolation all of this sounds somewhat justifiable
The government lending money via blank checks as long as a person is enrolled in an “accredited” school was never justifiable.
Except to voters who wanted lower taxes now and the politician who could deliver those lower taxes by reducing cash spending on higher education facilities and instead lending to students which can then be booked as an asset on the government’s books.
In 1976 the law was changed to require 5 years until student loans could be discharged through bankruptcy. In 1990 it became 7 years. In 1998 the waiting period was eliminated, leaving only "undue hardship" as the allowed way to get rid of that debt.
Those waiting periods were put there as a counter to "the obvious play."
Let student loans be dischargable through normal bankruptcy again. If a waiting period of 5 years or 7 years isn't enough, why not?
Why is a potential life-long debt from a mistake made while still a teenager or in one's early 20s that important to maintain?
If it's still so risky, don't issue student loans! If a college education is so important to the country then the government can provide direct funding to the school and students.
> you'll get your money back
Plus interest, with earnings that exceed putting the same money into other investments.
Tough luck, that is true for everyone having monetary capital. Mostly people without the means to strategically invest. Sure, they are bit better off than those living from paycheck to paycheck.
I think the argument against education due to degree inflation doesn't have the correct goal. Sure, more people would have degrees and perhaps there is an inflation. This is without consequence while higher education does have tangible benefits. The author confirms that these arguments are already blowing in his face.
I would recommend that the author takes a look at other countries without education that costly. We live in the 21st century, the logistics of information have changed and spreading it takes fewer efforts.
It is certainly unfair to those that did need to pay their loans and those that granted them with the belief that they will get the money back at some point. The state really cannot really expropriate their loans as far as I understand it.
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