Tue 12 Oct 2010
Why do we need a government agency to protect adults from taking on loans for homes that they will find difficult to pay back, but no agency to protect 17 year old children from taking on loans for educations that they will find difficult to pay back, especially when we have such good data on the correlation of under-graduate education and future income?
I’m rarely in favor of new regulation, but one I’d support would be this: every university, upon acceptance of a student, must chart the average income for their selected major against the loans they’ve taken out and give data on how much they’ll expect to pay per year after graduation, and expected pay-back durations.
If anyone says “but there are so many non-financial benefits for getting an education!” I’d counter with two points. 1) there are lots of non-financial benefits from having a house, but we still think that taking a loan you can’t pay back is a bad idea and 2) maybe it’s a bad idea to take out tens of thousands of dollars in loans to pay for things that have non-financial benefits.