From: "E. Allen Smith" <EALLENSMITH@ocelot.Rutgers.EDU>
Date: Thu, 12 Dec 1996 13:31:14 -0800 (PST)
To: mjmiski@execpc.com
Subject: Re: Redlining
Message-ID: <01ICXGIQSR8MAEL7YC@mbcl.rutgers.edu>
MIME-Version: 1.0
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From:	IN%"mjmiski@execpc.com"  "Matthew J. Miszewski" 12-DEC-1996 11:32:36.79

>Just wanted to clear up that my reference to student loans was not meant to
>start a discussion of the granting of _those_ loans.  It was meant to spark
>a discussion of the lending to those borrowers *after* they graduate.  As a
>group, their default rate is generally high.  And yet, as a group, the
>extension of credit to these people is not systematically denied (as in
>redlining).

>I take responsibility for the thread being confused as I believe my first
>mention of it was unclear.  mea culpa.  

	I see... that explains your apparantly nonsensical answer that the
guarantees on student loans don't make any difference. Quite alright; we all
make mistakes.
	I would like to suggest that the essential problem in determining
loans to those who have just graduated is that of headaches in gathering
sufficient information; namely, the cost of finding out "is this a good
school" and "how good are this person's prospects" are sufficiently high so as
to make up for the default rates. As previously mentioned by Dale Thorn,
the inclusion in this figure of various trade schools is also a (related)
problem, one that Clinton's proposal of student loans for 2 years of
college for _everyone_ would make worse.
	-Allen