> Loans are non-discharged (you can't shed them in bankruptcy).
They’re also not collaterized. As a taxpayer, I’d be very much against a non-collaterized loan that anyone can get without much care for credit risk, that’s dischargeable in bankruptcy. In private sector, dischargeable debt with no collateral, like credit card debt, has 20%+ rates for people with low credit scores.
> 3) There is no intensive for schools to charge less. (schools likely should have skin in the game if borrowers end up shedding debt through time expiration or bankruptcy).
If debt is held by federal government, the students defaulting will not be much of an incentive to the school.
> Loans or the amount of the loans are not weighted at all by the future prospects of the person
Indeed. The most recent loan forgiveness plan is basically mechanical engineers subsidizing drama majors.
This is false.
> Loans are non-discharged (you can't shed them in bankruptcy).
They’re also not collaterized. As a taxpayer, I’d be very much against a non-collaterized loan that anyone can get without much care for credit risk, that’s dischargeable in bankruptcy. In private sector, dischargeable debt with no collateral, like credit card debt, has 20%+ rates for people with low credit scores.
> 3) There is no intensive for schools to charge less. (schools likely should have skin in the game if borrowers end up shedding debt through time expiration or bankruptcy).
If debt is held by federal government, the students defaulting will not be much of an incentive to the school.
> Loans or the amount of the loans are not weighted at all by the future prospects of the person
Indeed. The most recent loan forgiveness plan is basically mechanical engineers subsidizing drama majors.