>How “discerning” could you be when making loans to teenagers with no income and no credit history?
Very. They may very well take into account your grades and SAT score to determine feasibility of repayment.
>The only thing that would happen is that the banks would force all loans to be co-signed.
They may and why shouldn't they? This will deter expensive colleges and push students to cheaper alternatives like trade schools, community colleges and state schools. What's wrong with that?
>Guess who is statistically unlikely to get loans in that scenario?
People who can't pay back loans? I don't follow your point. Are you saying that loans should be made without consideration of feasibility of repayment?
The requirement of a co-signer essentially means that the only people who get to go to college are the people who can afford to go to college before they go to college. You end up with a system where people who shouldn't go to college still go, because their parents can afford to send them; but people who should go to college can't, both because they can't get the funds (even though they could pay them back as a graduate) and because the first group is driving up prices.
>The requirement of a co-signer essentially means that the only people who get to go to college are the people who can afford to go to college before they go to college
That's not what it means at all. College is not a binary option. There many schools with varying tuition. And even in a world where college tuition is much higher than it should be due to the distortion of subsidized and guaranteed federal loans, a student can make a decision that balances their financial situation and academic goals. That may involve choosing a less prestigious state school closer to home, working in the summers, or working part-time, or going to school part-time, etc.
I also don't really understand your point. The requirement for consignment of a loan is because the loaner cannot afford the loan. That doesn't change if the loan is simply guaranteed as in the present system.
>but people who should go to college can't, both because they can't get the funds (even though they could pay them back as a graduate)
Why wouldn't that be incorporated into the loan application, i.e. the ability of the loaner to graduate and join a competitive field. That's the argument I'm making. The people who are most screwed by school debt are those that went to expensive schools to get non-competitive degrees that won't enable them to pay back their debt. Nobody is crying for doctors who may carry a large debt, but also make very good money.
>because the first group is driving up prices.
Funny you should reference market mechanics now ....
Very. They may very well take into account your grades and SAT score to determine feasibility of repayment.
You act as if the SAT score is a predictive of future success. Do you know how easy it is for parents of means to pay for “sat tutorials” that will help their kids improve their scores significantly? Ask me how I know.
They may and why shouldn't they? This will deter expensive colleges and push students to cheaper alternatives like trade schools, community colleges and state schools. What's wrong with that?
So only the rich should go to the good schools?
People who can't pay back loans? I don't follow your point. Are you saying that loans should be made without consideration of feasibility of repayment?
Student loans are or should be based on the ability to pay back loans based on future earnings. Most loans are based on credit, prior repayment history and income - three things that students don’t have.
Again of course the College Board has every reason to perpetuate the myth that the SAT is about college readiness and not about how much access you have to tutorials.
Do you really think some free online tutorials are as good as $100/hour private tutor who is a college professor that we got for my son or in my case having a mother who was not only a high school Math teacher but also taught SAT tutorials? Do you really think the latter had no bearing on me having to highest SAT score in my school and the second highest in the district with 800 seniors?
I’m not bragging. I didn’t exactly live in a top ranked school system in the small town south.
Both my parents were math teachers. I qualified for SMPY/SET (and came from a rural high school where only ~10% went on to four-year colleges).
I am fairly convinced that outcome was likely from years of math education in daily life, on car trips, doing math puzzles with my parents, etc. We’re doing the same with our kids now. My daughter just scored perfect on the SSAT practice math test and finished in half the allotted time. My total extent of “dedicated” prep was under an hour. Our total extent of informal prep was thousands of hours over nearly a decade. (That test isn’t nearly as difficult as the SAT, of course.)
I suspect your mom had more to do with your outcome based on years than the expensive tutor did in a few dozen hours. (I’ll also not hesitate to do that if I think it’s needed.)
Doesn’t that kind of make my point? That kids who either grow up in an environment where they have affluent parents with access to resources or in my case, highly educated parents teaching me what ended up being 11th grade math in 8th grade is advantageous? That still doesn’t make the SAT unbiased.
Well, the question is whether you were simultaneously prepared for the SAT and for college by 18 years of daily reinforcement of the value of education and practical subject matter drilling? I believe I was, far more than someone whose parents were equally loving and caring, but who worked in a factory or a trade.
If your upbringing was causal in preparation for both, it seems the college board might be correct in claiming that the SAT measures college readiness.
>You act as if the SAT score is a predictive of future success.
It's a predictor of your odds of graduating from University.
>Do you know how easy it is for parents of means to pay for “sat tutorials” that will help their kids improve their scores significantly?
Children of Parents who care about their education will do well. News at 11.
>So only the rich should go to the good schools?
That's not what I said at all. There are lots of good schools providing good education out there. State universities, by and large, are phenomenal, frequently with a good tuition for in-state students. You don't need a boutique humanities degree from a high priced private college. You can leave those to the rich.
>Student loans are or should be based on the ability to pay back loans based on future earnings
Sure. I don't disagree with that. It's why nobody complains about doctor school debt load, because their field pays well.
What's disgusting is giving a non-affluent student tens of thousands per year in debt to get a humanities degree.
And that's the problem .... we're not discriminating enough by the chosen degree. Federal loans should discriminate by the program.
>Most loans are based on credit, prior repayment history and income - three things that students don’t have.
You're still operating within the current system where tuition has been distorted due to massive injection of federally guaranteed loans into the system.
There is no reason why you shouldn't be able to choose a good school and work part-time or do school part-time and pay your way (at least mostly). This is possible today even in the distorted market.
And finally, are you really arguing that loans should be given to individuals who cannot afford them and will not afford them with the degree they will get??
All of the policies you propose would have a disproportionate impact on black and Hispanic students, who generally come from families with less means to qualify for credit. Policies that disproportionately channel these students to trade schools and community colleges is a political non-starter.
What are you really trying to say? That black and Hispanics families are disproportionally a higher risk of defaulting but should still get loans they cannot afford? Is that your argument?
Loans are not grants nor gifts. You're not doing anyone a favour by giving them a loan they cannot afford to repay.
There are other ways to subsidize education rather than distorting the lending market.
- The others are trying to tell you, in good faith, why they think such a move would be politically intractable. Grandstanding rhetoric doesn't help your argument.
- Not requiring your parents to be rich is otherwise known as intergenerational upward mobility. If the effect of the current system is to externalize the costs of upward mobility on the rest of the society, then that's probably worth paying (to a point). The bigger problem is that government-issued loans suppress market pressure on colleges to operate efficiently.
>You are expected to pay student loans based on future income
Sure. Let's go with that. Even under that assumption, there are multitudes of reasons why a bank would require cosigners, all coming down to you being a risk factor. For example, your grades may be low (risk of not graduating), you may be choosing an expensive art college with high tuition, or a degree wit no guarantee of reasonable income.
Again, loans are not gifts. You do not do anyone a favour by giving them a loan they cannot afford.
Agreed. So I assume you’d be opposed to a policy that has the effect of requiring parental co-signing and discriminates in part based on the income and affluence of the parents?
Very. They may very well take into account your grades and SAT score to determine feasibility of repayment.
>The only thing that would happen is that the banks would force all loans to be co-signed.
They may and why shouldn't they? This will deter expensive colleges and push students to cheaper alternatives like trade schools, community colleges and state schools. What's wrong with that?
>Guess who is statistically unlikely to get loans in that scenario?
People who can't pay back loans? I don't follow your point. Are you saying that loans should be made without consideration of feasibility of repayment?