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 ...
Okay, then here's an answer:
Sure, why not? If you can weasel out of any other kind of debt with bankruptcy, how are student loans any different?"
What say you?
“Garnishment is the answer.”
No it isnt.
Bankruptcy is the answer. In some cases all debt is liquidated, in others, it is restructured.
If you understood the problem- that it is mathematically impossible for a debt to be repaid- then you would not stake out the ridiculous position you have.
You don’t understand how student loans work, and how they get repaid.
DUH.
My take on this is that student loan debt should not be materially different from any other kind of debt, and therefore should be treated the same under the law.
College tuition and fees have gone up much faster than the CPI, so something other than money-supply-induced inflation is going on.
Well, sure... from 1990 to now, the availability of guaranteed federal money has gone up a lot faster than the CPI too!
My apologies; I thought you were saying that the increase in college tuition was merely a symptom of the shrinking value of the dollar.
As a PhD research engineer, I hear you about universities placing all students in the English/History/Philosophy classes to pay the bills. However, I am not so down on that aspect of it, unless it becomes simple leftist indoctrination.
Decades ago, when I was sitting in those classes, there was still value in those classes (reading government philosophy like Rousseau, etc., foreign literature, even English, and especially American history). Over the years, that exposure has served me well (and sparked hobby interests, too), so I don’t regret it. But you may be right that, in this day in age, those classes have become worthless attempts at spewing leftist ideology. But one could argue, in that case, that you have chosen the wrong university.
The Grace Report 30+ years ago showed that just switching from direct student loans to guaranteed would save a fortune. As it is, less education is avaiable for more money, which brings about rationing, which means the demagogic party members running the campus race-norm the whole place into an anti-Christian, third-world, pro-abortion, BDS hell-hole.
No problem.
They have just now figured this out?
Next thing you know they will figure out the price of beef skyrocketed after the food-stamp boom.
F-in’ morons.
I went to that school for the engineering program. That particular university had (past tense now that, sadly, our manned space program has been shut down) more experiments on the space shuttle than any other university in the country. Tons of the faculty had previously worked in the space industry and they were good.
The general ed was a mix of good and bad. The best class I had was a philosophy class: Ethics in Biotechnology. It was taught jointly by a philosophy prof and a doctor from the microbiology lab. Poly sci was leftist drivel. I had an art class that wasn’t bad. That class had guest art types that would show up and talk about different types of art. It wasn’t bad. But one day, we had a guest instructor who started going off on gun control and was screaming, “I can’t believe that there’s people who think it’s OK to walk around everywhere with a GUN.” I don’t even remember how the discussion came around to that. I raised my hand and asked, “What does this have to do with art?” He points his finger at me, tells me to stand up (which I do), and screams at me, “People like YOU are the THE problem in this country!!!” I said right back, “You’re a raving idiot,” walked out of the class, and took a zero for class participation that day. It had no effect on my final grade, I was getting a 96/100 anyway.
The gen ed was a mix. I didn’t see that it did much for me except for 2-3 classes. My main gripe is that it’s extra time and money and it’s not what I was there for.
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