The problem with the easy loans to students is that an artificial demand is created. More students going with “free” money makes the price go up. But hey, its just pretend money anyway.
Same thing that happened with the real estate bubble. The gov’t financing easy loans, folks buying homes they couldn’t afford with money they didn’t have. But hey, we’ll make it back when we sell the house - because real estate only goes up “they aren’t making any more land you know”. Same with the education - “I’ll pay it back after I get that great job as V.P.” I forget what the unemployment rate is for college grads - 28% or something?
No Problem, Democrats have authored and voted yes to make student loan debt part of the bankrupting of this country via the Unconstitutional (non)Affordable Heath Care bill.
Suppose I borrow $1 to pay for "higher education" and then find myself in a position where I can't repay the loan. If I eventually default on it, did I ever really spend that $1 at all? A single case like this may be simple to understand, but keep in mind that my $1 "purchase" had already been reported in the nation's GDP figures.
Multiply this simple case by potentially hundreds of billions of dollars in unpaid student loans, and trillions of dollars in mortgages in default ... and you can see why so much of the U.S. "economic growth" of the last two decades was completely fictional.
“More students going with “free” money makes the price go up. But hey, its just pretend money anyway.”
I would think that some schools would have closed in the past few years if those loans weren’t available to the students; on a positive note, I think kids will be much more reflective now on what kind of job market awaits them at graduation.