today, the new york times reports that citibank and other companies that provide student loans are refusing to lend to students at some community colleges, for-profit universities and “less competitive” institutions. this decision perhaps finds defense on financial grounds. for example, one might argue that these students are higher risk for loaning institutions because their degree value is lower than those from other universities, so these students are more likely to enter lower paying, less secure, shorter term jobs, and so will be less likely to pay back the loans on time and in full. in the past, these loaning organizations were content to offer longer term loans at higher interest rates to this cohort. now they are deemed too risky to lend to at all, a decision which suggests the guardians of the “giant pool of money” are over-correcting for the mistakes they made with housing loans over the last decade.
however, by default (?), these lending organizations serve the public good, insofar as the cost of education far exceeds the ability of some college-ready students to pay for it, these loans provided them access, and the country (according to several measures) benefits from having a highly educated workforce.
here again we witness a tension between people-as-objects-of-speculation and people-as-citizens (or humans, as you like). inspired somewhat by Peter’s desire to identify commensuration processes, I posit that risk is that “third” in the former, and ethics is that “third” in the latter. If my argument so far is persuasive, then tell me: when is the relation between risk and ethics not orthogonal? That is to say, when are they usefully considered to be the same kind of currency?