Posted on 12/22/2015 9:44:07 AM PST by SeekAndFind
A new study from the prestigious and scrupulously non-political National Bureau of Economic Research (which designates the beginning and end of recessions) blames student loan subsidies for nearly all of the tuition increases that have caused college education to become so expensive as to financially cripple families and indebted students. Professor Alex Tabarrock explains the highly technical paper at the Foundation for Economic Education:
Grey Gordon and Aaron Hedlund create a sophisticated model of the college market and find that a large fraction of the increase in tuition can be explained by increases in subsidies. (snip)
Remarkably, so much of the subsidy is translated into higher tuition that enrollment doesn’t increase! What does happen is that students take on more debt, which many of them can’t pay. (snip)
…the Econ 101 insight that subsidies increase prices (even net for those who are not fully subsidized) holds true.
I wonder where else (& here) we could apply this insight?
The higher education industry has become rich and fat off its ability to raise prices at a rate roughly triple inflation over the last five decades. Because intelligence tests are forbidden to be used by employers (as supposedly discriminatory), the only way to sort through job applicants by intelligence is through the rough proxy of a college degree. As gatekeepers to careers, colleges have been able to exploit the vulnerability of students (and parents) seeking to be hired by employers offering good prospects.
Student loan debt, incurred to pay for skyrocketing college tuition, is a ticking time bomb in the American economy, roughly the same size as mortgage and credit card debt.
(Excerpt) Read more at americanthinker.com ...
I say cancel all federal financial aid except Merit based scholarships. all you have to do is look at the different housing for university presidents to no what’s happening with student aid money. if you did that there would be about 2-3 years for the university system to adjust but I bet the universities would cut there tuition fast and the cost of books would go down also..20 years ago my Biology book was 100 dollars hate to think the cost today
“Hell No.”
“Again, Hell No.”
I’m with you. The reason why student loans are not dischargeable is because they wouldn’t exist if people could simply walk away from them (at least private ones wouldn’t exist).
So how about a compromise - make them collateralized, like car loans. Allow the borrower to walk away from the student loan, but then allow ‘repossession’ of the college degree. Walk away from the loan and your college transcript simply VAPORIZES - cleared out of university records and any other records, and claiming that you have a degree when you no longer do would be fraud.
Now that would never happen, but proposing it would FORCE the deadbeats and their supporters to BE TRUTHFUL about their intentions - that they want free college - not really loan relief.
Your position is contradictory. Get the Fed out of student loans but maintain the Fed immunity for student loans in bankruptcy?
That's the judge's call, isn't it.
Under what circumstances do you consider bankruptcy to be valid at all?
It kills me how many people take on student loan debt and don’t even get a degree. At the university that I went to (graduated in 1999), an older guy staff member that I was talking to in the hall told me that that school graduation rate is 24.6%. That means that a sold 3 out of 4 are walking away without a degree. And he told me that that’s a very typical number for a lot of universities. I learned volumes more from this dude’s hallway talk than I did in the actual freshman orientation. There were about 6 of us students gathered around this guy for an hour.
If students could, as you say, “weasel” out of loans, then I guarantee you the ebonics departments would all dry up because no bank would put their money at risk subsidizing it.
I would also suggest that each college list the statistical average with professors and non-professors. Let the kid know that there are probably nine non-professors for each professor, and then maybe the kid will ask why they need the non-professors and their hefty payroll.
The vast majority of bad student debt is from those who never completed college. Half or more of most student loans are for ancillary expenses - housing, food and mandatory medical insurance and anything else that could be charged to the student account.
That said, sounds great - don't pay back your student loan, you can't claim attendance or degrees from a college.
The point of any loan isn't to drive the borrower into financial ruin, but to make a bearable financial arrangement that is beneficial to both the borrower and the lender. If you require an exception to bankruptcy law to justify the loan you're about to make, you're not there any more.
Garnishment is the answer.
If the IRS will garnish your income to pay income taxes, then they (or some similar agency) should garnish your income to pay your student loan should you default.
I believe it already is a requirement of getting a student loan that allows this. So if you don’t like it - don’t apply. It’s voluntary.
Under what circumstances do you consider bankruptcy to be valid at all?
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You’re asking the wrong person. Kingu is arguing that it’s a valid position to file bankruptcy to weasel out of student loans.
If you want to start a different topic and argue under what conditions it might be valid to file bankruptcy, then fine.
But for now - lets stay on the subject.
Not contradictory. The Federal laws pertaining to bankruptcy apply to private party loans. Which is what student loans should be.
That's not necessarily an unreasoned position, or an unreasonable one. I was just asking for clarification.
Amazing how subsidies ALWAYS drive UP the cost of anything, including housing, education and (GASP!) health care!
When I completed my engineering master’s in 2013, nearly all of my teachers were rebelling against the textbook system. That’s a racket, too. A new edition of the textbook is always coming out that changes the order of homework questions and/or changes numbers so the answers are a little different. Nearly all of my teachers said, “I’m not going to make you buy a $200 textbook for this course.” They’d have us buy a book a few editions back from Amazon (or any number of other textbook outlets) for literally like $20 and teach out of that.
I had to buy two books for Numerical Methods. One was $5 and the other was $1. The shipping was literally more expensive than the book.
In Linear Systems Theory, our teacher wrote a textbook in the early ‘80s. He had released all copyrights and let us download a PDF of his book for free off the university website, that’s what he taught to. Interesting guy, he got his Ph.D. in 1963 and worked on Mariner 10 among other spacecraft. This guy designed the control system that rotates the spacecraft to keep the instruments and antennas pointed in the right direction. This dude is a bona fide genius, his first job out of college was Jet Propulsion Laboratory. He got a master’s degree in math, realized there’s no money in it, so he went back and got a master’s and Ph.D. in electrical engineering. Needless to say, this dude is as old as the rocks on campus and is teaching to this day. OK, I’m rambling.
Now there's a position I can support.
Once again - the topic is; Should you be able to file bankrputcy to discharge (I used the term weasel out of) student loan debts.
I can use large fonts if that helps.
Why you want to change the subject and inject points I've not made is a mystery to me.
A lot of garbage departments and degrees would be gone without general education requirements. They can’t entice people to show up for art, history, philosophy, and liberal arts classes, so they’ve devised general education requirements to force you to go. It’s a total crock. Those departments can’t survive without butts in those seats, so they force it.
I went to school to be an engineer, anything else is a waste of time. I’m sure I’m going to get the standard litany “you need to learn more about the world, life doesn’t just exist in your major”. Put it to music, that’s a journey of self-discovery that I’ll make on my own (or not), I don’t need some idiot stuffed-shirt school administrator to force that on me at their prices. I learned more about the world from my US Navy enlistment before college than that university ever taught me.
I think that is also a great idea.
Bankruptcy is a well defined construct. People who are insolvent “weasel” out of debts all the time.
Just because student loans are mostly not dischargeable (at the moment) does not mean an individual is solvent.
There is no legitimate reason to not let insolvent people declare bankruptcy, and a lot of legitimate reasons to encourage them to do it.
One reason to allow it is to destroy liberal bastions of ignorance that many universities have become. Once student loans are dischargeable only legitimate borrowers at legitimate institutions with legitimate courses of study will be funded.
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