>Do lenders imagine they're more likely to recover their money this way?
Who knows. But if grad students would act like even half-way decent business men and women then they would pass their costs on to their customer (i.e. their boss).
Just because costs go up doesn't mean your rate of return needs to fall.
Assuming a competitive market you can't pass costs on, you charge what your customer is willing to pay, whether your costs are zero or high. If costs are higher than what customers will pay, you don't have a business.
You used to be able to discharge student loans through bankruptcy and guess what?? The sky didn't fall down.
However, that was also when a year of college could be paid for by a minimum-wage summer job. Now it's egregiously expensive AND they've got you by the balls.
the last time you could discharge student loans in bankruptcy without satisfying special conditions was 1976 in the US. but that was a time where an undergrad degree was relatively cheap, and not many people took out loans in the first place.
I don't disagree that something is seriously messed up in this country's higher education system, but the discharge exemption for student loans is probably one of the few things that keeps the system even slightly economic. like I said above, you cannot just lend huge chunks of money to kids without making any risk assessment and also allow them to default whenever. at least, you can't do this unless your intention is to lose money.
if I had to have a guess, I would say that the main contributor to our outrageous education costs is the government making all these uneconomic loans in the first place.
That's fine, but ultimately how can you look down on people like Trump, Ajit Pai, or the CEO of Comcast? They're sacrificing ethical decisions for money, same as you.
Only difference is they're getting "fuck you" money and you're barely getting enough to buy a house. Kinda lame to sell out for so little IMO.
As long you don't complain about these types of people, then whatever, but if you do you need to take a harder look in the mirror!
Ah, I get it. The "my leaders should have more integrity than me" mentality. Well guess what? One day you may be a leader...and you'll still have your crap, anti-social mentality.
Yes, I've been thinking a lot about value the last few months and this is similar to the conclusion I reached. No one is paid based on the value of their output because it is nigh impossible to actually determine for most people!
So we use a proxy for value that is much more closely tied to an employee's leverage in the market place. Does your profession have a government granted monopoly (law/medicine)? Certification to entry? Are you a better negotiator? Do you have another higher job offer? Do you have personal relationships with a business's customers (sales)? All of these things are correlated with increased leverage and thus increased compensation.
Output is largely not. It may set a ceiling for compensation, but it is not as related to compensation as a persons' leverage.
And it follows that people with high amounts of leverage and comparatively low amounts of output will be "screwed" by salary transparency. They will have to justify why their leverage is worth more than someone else's output and that will make them unhappy.
Who knows. But if grad students would act like even half-way decent business men and women then they would pass their costs on to their customer (i.e. their boss).
Just because costs go up doesn't mean your rate of return needs to fall.