MarkinKansasCity wrote:The real problem is that the risk has no relationship to the price. (interest rates) I read that the Federal Government made something like $50 billion dollars last year on student loans. There's money to be made here. Why the fuck does a loan for a degree in Chemical Engineering from MIT have the same interest rate as a loan for Cooley? That's some dumb shit.
1) Student loans should be dischargeable in bankruptcy.
2) Interest rates should be based on default risk.
3) Not all degrees should qualify for student loans.
I would love it if loan companies had good enough information to build reliable actuarial tables for this stuff, but they don't. I agree in principle, but good luck.
The government also has a mandate to encourage social mobility, and pricing student loans by risk profile ends college for low-income families. This is one of those situations where the current situation is untenable, but the most theoretically logical solution is worse in practice.