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By having models that charged people more than they'd have to pay out, by investing the premiums they received, and by using every trick in the book to avoid paying claims.
The idea that the government or the banks are capable of building a mathematical model which determines future labor market needs is a ridiculous and arrogant concept that will lead to further distortions in the labor market.
The idea that they can't do so shows a blatant lack of knowledge on current LP techniques.
Will a model be 100% correct? Absolutely not. Will it be pretty damn close? Absolutely.
The idea that they can't do so shows a blatant lack of knowledge on current LP techniques.
Will a model be 100% correct? Absolutely not. Will it be pretty damn close? Absolutely.
for me, i don't want a bank's model distorting the options that students have. Arguing how accurate the model will be is moot, to me.
i have no problem with student loan rates based on models, as long as it isn't being funded by Fed or taxpayer money. if banks want to do this with their own capital, then more power to them.
for me, i don't want a bank's model distorting the options that students have. Arguing how accurate the model will be is moot, to me.
i have no problem with student loan rates based on models, as long as it isn't being funded by Fed or taxpayer money. if banks want to do this with their own capital, then more power to them.
So because there is not a 100% correct solution, you don't want to even try?
Not modeling to manage risk of default is a fiscally irresponsible action to take, and it is an option I would not want the government to take if they wanted to be even semi-responsible with my tax money.
A nationwide policy smacks of the dreaded socialism, does it not?
Please lay out your plan in detail.
What on earth are you talking about? 'Nationwide policy' is part of every type of government there is. What I was pointing out is that using personal examples of a few people is pointless when we are talking about risk management in regards to a population in the millions.
No, I would go with less-than-100% solutions, if they were better than your solution.
So what, exactly are you whining about? The bank's models don't "distort options students have", it presents the data with risk built in. If a student is stupid enough not to do his/her own research before taking out a loan, that is not the bank's fault.
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