Originally Posted By: javacontour
Originally Posted By: Tempest
Quote:
I'm thinking a great way to have that happen AND get the government nose out from inside the tent is to have the loan programs run by the schools with the schools on the hook for the loans if their students can't pay.
Interesting idea, but the only way that will happen is if government mandates it, so it won't really be getting the government out of it.
On going policy will allow people that engage in "public service work" to have their tuition forgiven after 10 years. This limitation on having to pay back loans will have additional inflationary pressure on college tuition as well.
Sure can get the government out of it. They stop guaranteeing the loans. The suggest if they want student loans to continue, that THEY work with the banks to guarantee the loans themselves.
One aspect of the problem is there is a third party who is on the hook for the loans if the student do not repay.
Get that third party out of the equation. Make it so that only the school and the bank are on the hook if the student doesn't repay.
Once it's their money at risk, they'll pay closer attention to the student, the school and the degree program.
I agree. Your reasoning is similar to mine. The result is less loans would probably be issued and at slightly higher interest rates, but maybe less loans would not have all that many downsides in the overall scheme of things.
Originally Posted By: Tempest
Quote:
I'm thinking a great way to have that happen AND get the government nose out from inside the tent is to have the loan programs run by the schools with the schools on the hook for the loans if their students can't pay.
Interesting idea, but the only way that will happen is if government mandates it, so it won't really be getting the government out of it.
On going policy will allow people that engage in "public service work" to have their tuition forgiven after 10 years. This limitation on having to pay back loans will have additional inflationary pressure on college tuition as well.
Sure can get the government out of it. They stop guaranteeing the loans. The suggest if they want student loans to continue, that THEY work with the banks to guarantee the loans themselves.
One aspect of the problem is there is a third party who is on the hook for the loans if the student do not repay.
Get that third party out of the equation. Make it so that only the school and the bank are on the hook if the student doesn't repay.
Once it's their money at risk, they'll pay closer attention to the student, the school and the degree program.
I agree. Your reasoning is similar to mine. The result is less loans would probably be issued and at slightly higher interest rates, but maybe less loans would not have all that many downsides in the overall scheme of things.