The whole student loan situation is a mess. The Gov made money easy and colleges jacked up their tuitions as a result of the easy money. Students across the company gambled by taking student loans with the hope they’d find jobs which would enable them to pay back the loans. Yeah the kids should have known better but who taught them? High school teachers who have no clue about what it’s like to work in the real private sector world? College loan offices who encouraged the excessive borrowing to pay for the excessive salaries? Parents who don’t have the money themselves to pay excessive tuitions? Why aren’t colleges being investigated for gouging students by means of the student loan program. Instead, we’re just tossing more money at the colleges who helped elect Bobo which will result in higher tuitions and more indebtedness. If future students are getting a “bailout” then surely past students should get that too.
Student loans should be structured like a mortgage and require a down payment of some sort, like so:
Tuition up to $5000/semester - 25% down
$5001 - $10,000/semester - 20% down
$10,001 - $25,000/semester - 15% down
Over $25,000/semester - 12% down
This way, it puts *some* downward pressure on tuition, as, no matter what loan they get, they can’t finance it all. Let the lending be done privately, but regulate as such - while I’m not a fan of regulation, such a method would control costs while still giving reasonable access to student aid. Scholarships can give a student an opportunity for zero-down, as well as grants, but having a large chunk (the loan-borrowing student body) restricted as above would be enough, I think, to keep some control on the market while not making it impossible for anyone but the uber-rich to go to college.
Grants, such as the Pell Grant, can also be “capped” at such a level that it would make tuition increases over XXX% per year difficult as the grant wouldn’t “catch-up”. While this is essentially a form of price control, what we have now is a reverse price control anyway, i.e., the endless subsidy of tuition means costs go up, up, up with no incentive to cut them.
Just my $0.02.