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I figured out a cost effective way to fix the student loan problem in the USA using the free market. The idea is to treat a diploma as a commodity. Let me explain how this can work, using an analogy.
Say you had all the skills and decided to design and build your dream house. You get a loan from the bank to buy the property and materials. You work hard over several years building your dream house. Once it is done, you still owe a lot of money to the bank and find that you cannot afford to pay it back. The bank will foreclose on your property. You will lose the fruit of all your labor, the bank gets your house, so it can sell the house and reimburse itself for the loan.
If we treated the college diploma and student loan, the same way as we treat the house and mortgage, if we paid off a student loan this would entitle the payer the student's diploma. The bank does not allow the home owner to keep the house if they default. The entity that now owns the diploma, would be able to sell it to recoup their expenses. This way you could buy a diploma, that has been repossessed, without having to go to college. Instead of victimizing the tax payer, this will be driven by free market supply and demand.
In the example of the man building his dream house, the new owner of his house who bought it from the banks, has bragging rights to the dream home, even though they did not do any of the work. All they did was get a loan and buy the house from the bank. The man who built the house, originally, has memories and experiences which are always his. He only lost the house. The same could be done with the diploma. The student who defaults may have done all the work for the diploma, but the other person gets to enjoy the dream diploma, simply by buying it in the diploma foreclosure market. They do it with houses.
Conceptually, rich people could go to diploma brokers, as a way to get ideal diplomas for their children at a birth. Why wait for talent to emerge and grow. Wouldn't it be nice to have a degree at 1 year old? That makes you look like a genius to your friends. Colleges may need to buy back foreclosed diplomas, so their degrees maintain value. Colleges have made out like a bandit, and this would level the field. Some forward thinking students may decide to get a loan for college diploma, in High School, then go work in the trades, so they can pay it off faster and still have a degree.
In the end, a diploma is a type of resume prop, to help one open doors to jobs and organizations. Why not make it a commodity and solve the student loan problem?
Say you had all the skills and decided to design and build your dream house. You get a loan from the bank to buy the property and materials. You work hard over several years building your dream house. Once it is done, you still owe a lot of money to the bank and find that you cannot afford to pay it back. The bank will foreclose on your property. You will lose the fruit of all your labor, the bank gets your house, so it can sell the house and reimburse itself for the loan.
If we treated the college diploma and student loan, the same way as we treat the house and mortgage, if we paid off a student loan this would entitle the payer the student's diploma. The bank does not allow the home owner to keep the house if they default. The entity that now owns the diploma, would be able to sell it to recoup their expenses. This way you could buy a diploma, that has been repossessed, without having to go to college. Instead of victimizing the tax payer, this will be driven by free market supply and demand.
In the example of the man building his dream house, the new owner of his house who bought it from the banks, has bragging rights to the dream home, even though they did not do any of the work. All they did was get a loan and buy the house from the bank. The man who built the house, originally, has memories and experiences which are always his. He only lost the house. The same could be done with the diploma. The student who defaults may have done all the work for the diploma, but the other person gets to enjoy the dream diploma, simply by buying it in the diploma foreclosure market. They do it with houses.
Conceptually, rich people could go to diploma brokers, as a way to get ideal diplomas for their children at a birth. Why wait for talent to emerge and grow. Wouldn't it be nice to have a degree at 1 year old? That makes you look like a genius to your friends. Colleges may need to buy back foreclosed diplomas, so their degrees maintain value. Colleges have made out like a bandit, and this would level the field. Some forward thinking students may decide to get a loan for college diploma, in High School, then go work in the trades, so they can pay it off faster and still have a degree.
In the end, a diploma is a type of resume prop, to help one open doors to jobs and organizations. Why not make it a commodity and solve the student loan problem?