jimf

So by treating a student loan the same as a mortgage or credit card a student should be subject to a credit check before getting a student loan to assess their ability to pay it back. Poor risks get a high rate of interest then.

Novocastrian

That's fair enough I suppose. It would certainly drastically decrease enrollment in meeja studies and the like.

Almost Canadian

I thought I was agreeing with you

Alan2005

Well yes.

Right now the problem is that if you tell uni's that students can borrow up to $yyy per year to pay fees, said unis are obviously going to start charging $yyy per year in fees. This is exactly what happened in the UK.

Alan2005

Ah... Sometimes it hard to tell and I just assume the default disagreement

jimf

So knowing that a student could take out the unsecured loan, attend university, accumulate significant debt and then declare themselves bankrupt isn't it likely that the credit offered by the banks would be tightly rationed and the terms so unattractive that very few would attend university?

Alan2005

Credit being tightly rationed is not a bad thing. If credit was priced correctly the world would be a much better place.

There is a place for student loans, but they shouldn't be anything the governments is involved in. My layman's view is that means tested grants based on parental wealth are the best way of funding uni expansion whilst not bankrupting the state. Poor kids get grants and part time jobs, rich kids get money from the bank of mum and dad.

Auld Yin

Without the backing/guarantee of the Provincial/Federal Governments or provision of solid collateral Canadian banks would refuse to make student loans.

Alan2005

No they wouldn't. It would reduce, maybe by quite a lot, but there would still be a market for it. Lending is how banks make money.

And besides, can't you see anything wrong with the system where what you've said applies. I'll spell it out for you: If Canadian banks get a government guarantee on loans they make they basically have risk free profits underwritten by the tax payer. Well, this is already the case for mortgages, why not everything else. But really, it's a shit way to run things.

Novocastrian

Do Canadian banks make student loans? I thought they just did lines of credit, usually co-signed by a parent.

Alan2005

You know, maybe AC has a point with the thread title. Lets just give everyone a free degree and then we won't have to worry about who's paying for it. The "graduates" can just use look at wikipedia if asked anything about their chosen field of "study".

Almost Canadian

Atta boy!

ultrarunner

May be, but the Govt can step in to stop that happening here.

Novocastrian

No, it's not. Back in the day (although not so far back that my point is incorrect), uni's in the UK were funded by taxpayers, with a co-pay for parents who were assessed as being able afford to do it without induced penury.

This worked quite well until it became the fashion to redefine almost all tertiary education in the Uk as a University degree, and even survived that for a while.

Then Blair and his Thatcherite cronies figured that it was all too much to bear and introduced fees. They came first, student loans came second.

Now, the latest bunch of fools in the UK government have made these fees ridiculously high, unaffordable in a word.

At no time did anyone set a limit on how much a student could borrow resulting in a matching increase in fees following on.

Alan2005

Ah, yes. You are right. Apologies. I remember now - the government told the unis the maximum amount they could charge thinking that most wouldn't charge it, but they pretty much all did.