The Student Debt Racket: This isn’t a natural market phenomenon; it’s the predictable result of decades of government interference

Mises Institute ^ | 08/25/25 | Derek Foster

[dragnet2]

Lost in this conversation is the taxpayer, who’s also getting shafted. State governments continue to fund bloated universities because even federally-subsidized tuition isn’t enough to pay for the massive bureaucracy. Meanwhile, taxpayers are forced to cover the interest on ballooning student debt.

What a hustle this has become. This is right up there with the "Property tax" con job.

[Brian Griffin]

Rent of Primary Residence in U.S. City Average

https://fred.stlouisfed.org/series/CUUR0000SEHA

It’s up about five-fold 1980 to the present time.

Rents stem from a mixture of building cost and rental & maintenance people cost.

[OrangeHoof]

Banks were smeared as “predatory lenders” during the housing crisis. I said “what about ‘predatory educators’”?

[Brian Griffin]

Perhaps college students should have to pay $10,000 tuition from their own funds at least seven months previously before becoming eligible for federal student loans.

Prospective college students would then typically work a year before going off to college.

They could take remedial courses online during their off-work hours. Their SAT scores would become higher, and their chance of graduating would increase.

[rocksblues]

My grandson is in his final year. His student loans started at 7.35% and has gone up every year with no explanation except some factors have changed. This year it was 18.50%. I loaned him the money for his last two semesters.

[Brian Griffin]

“The average student loan debt for a master’s degree is approximately $64,950, with total debt including undergraduate loans reaching around $83,651.”

https://duckduckgo.com/?q=average+student+loan+debt+for+masters+degree&ia=web

Maybe federal loans should only be available for medical school and students without a bachelor’s degree.

[Brian Griffin]

Was he borrowing from the Soprano Student Loan Company?

[Liz]

p

[Reddy]

Pretty sure these student loan interest rates are not simple fixed rate/term loans. The interest compounds daily? In other words, the students pay and pay and pay and the principle never goes down. We found that out on a Parent Plus loan. Was paying more than required but principle owed never moved.

[cpdiii]

Circa 1966 my university had about 7000 students. The administration was one wing of the chemistry building. That was 1/4 of the chemistry building consisting of about 20 offices. Today the administration building is a 3 story building of about 3 times the size of the whole chemistry building of 1966 but serving but about 8500 students.

I see a problem with this.

[Mr. Blond]

I thought usury was illegal.

[FreedomPoster]

The student loan system turns young people into indentured servants. This is not a good thing. It also creates a huge Leftist education bureaucracy which is also not a good thing.

[Shady]

In NY, Princess Kathy has pontificated that we now have FREE Community College for “demand occupations.” NOTHING IS FREE! When will people wake up? When this country is $100 Trillion in debt? The real question is, in debt to whom?

[nagant]

The student loan system turns young people into indentured servants. This is not a good thing.
~~~~~

If you don’t want to pay the money back then don’t borrow it.

[kvanbrunt2]

Make the loan system guaranteed by the schools. get the fed out of it. Defaults then are paid for by the schools themselves. Curriculum will change in weeks. No more doctorates in “Bikini inspection”

[Vaduz]

Today, over 42.7 million Americans owe a combined $1.69 trillion in federal student loan debt.

In 1978, Congress passed the Milk The System Act but what the hey it got votes.

[SomeCallMeTim]

Excellent summation of the decades long scam.

[castlebrew]

“Maybe federal loans should only be available for medical school and students without a bachelor’s degree.”

Maybe borrowers should (a) read the fine print before signing, and (b) pay extra against the principal every month to reduce the amount of interest (and retire the debt earlier).

Even better: Get the fed gov out of the student-loan business (and every other thing not enumerated in Article I, Section 8).

[rocksblues]

Nope we used Sallie Mae. And after the 18.50% quote tried Collage Ave. Surprise surprise same quote. So their scam is start you off reasonable and then nail you for more the closer you get to graduation.