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Student Loans Are A Drag On The Economy

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Re: Student Loans Are A Drag On The Economy

#141

Post by [deleted] »

lawnchair_larry wrote: post #134
thesimpsons1022 wrote: post #127

Earlier quoted context omitted.

why is it the schools job to teach their finances? I see school as more academic, while personal matters like that should be taught at home.

Are you kidding? What home? Oh, you mean the people who the banks gave giant loans to that it turned out nobody could afford and put everyone into foreclosure? Or their kids, who signed their life away to bankruptcy-proof loans on a degree they never finished, and can't get a job good enough to pay it back? Have you seen what passes for a parent? Yes, let's have those people teach their kids personal financial manage…

[deleted]

Re: Student Loans Are A Drag On The Economy

#142

Post by thesimpsons1022 »

lawnchair_larry wrote: post #134
thesimpsons1022 wrote: post #127

Earlier quoted context omitted.

why is it the schools job to teach their finances? I see school as more academic, while personal matters like that should be taught at home.

Are you kidding? What home? Oh, you mean the people who the banks gave giant loans to that it turned out nobody could afford and put everyone into foreclosure? Or their kids, who signed their life away to bankruptcy-proof loans on a degree they never finished, and can't get a job good enough to pay it back? Have you seen what passes for a parent? Yes, let's have those people teach their kids personal financial manage…

> Oh, you mean the people who the banks gave giant loans to that it turned out nobody could afford and put everyone into foreclosure? Or their kids, who signed their life away to bankruptcy-proof loans on a degree they never finished, and can't get a job good enough to pay it back?

that applies to the teachers just as much as it does to parents. teachers loved getting those loans.

I can even do exactly what you did and say: Oh you mean the people who raped their students? Or the ones who want to teach creationism and have schoolwide prayer?

Have you seen what passes for a teacher? Yes, let's have those people teach our kids.

On an unrelated note, I believe your comment does a good job refuting the notion that was made in the parent comment that " How many 18 years olds are making rational decisions about return on investment in 10-15 years time? ".

Re: Student Loans Are A Drag On The Economy

#143

Post by MisterBastahrd »

tn13 wrote: post #77

The root of this problem is that the liberals have been paddling relatives good sounding notions such as "everyone needs to go to college" thing and the subsequent government moves to ensure that every tom dick and harry can go to college. This was about to happen.

Seems to me the root of the problem is conservative state governments cut education spending in order to cut taxes. It's a win-win, they get to say they balanced their state budget at the same time that they make their state's citizens more likely to vote for them because of a lack of proper education.

Re: Student Loans Are A Drag On The Economy

#144

Post by tn13 »

vacri wrote: post #106
tn13 wrote: post #77

The root of this problem is that the liberals have been paddling relatives good sounding notions such as "everyone needs to go to college" thing and the subsequent government moves to ensure that every tom dick and harry can go to college. This was about to happen.

Australia has been through the "everyone needs to go to college" phase, and what we ended up with was a shortage of tradesmen, not a massive student loan debt. 'Having everyone go to college' doesn't mean you need to have these ridiculous loans. It doesn't automatically follow that a bolus of tertiary eduction has to result in that much debt.

"everyone needs to go to college" phase can lead to many problems depending upon various factors and the kind of government intervention we see for that purpose. In case of US the gov tried to reduce the friction in credit lending to achieve the said objective leading to a student debt crisis.

Re: Student Loans Are A Drag On The Economy

#145

Post by nirnira »

ap22213 wrote: post #121
nirnira wrote: post #81

Why are student loans so high, the market so ridden with defaults, and the price of education so high? I think (well, I'm a little more certain than that) the answer is basic economics. Here's my take: You (America) have a government that offers discount loans - i.e. loans with poor prospects/low interests rates - in the hope of driving a higher allocation of capital to education than would occur in a pure private le…

I get what you're saying. But, in a market-based system, where universities are highly profitable, we would expect that there would be an enormous influx of capital in to create more universities. But, we don't see that. There are very few new entrants into the university education space.

Because it's easier to compete with pre-existing universities. Better to spend $100 million on new facilities at an old university than $1 billion building one from scratch.

Re: Student Loans Are A Drag On The Economy

#146

Post by tn13 »

nirnira wrote: post #81

Why are student loans so high, the market so ridden with defaults, and the price of education so high? I think (well, I'm a little more certain than that) the answer is basic economics. Here's my take: You (America) have a government that offers discount loans - i.e. loans with poor prospects/low interests rates - in the hope of driving a higher allocation of capital to education than would occur in a pure private le…

Yes. People like Thomas Sowell have been arguing that endlessly. I dont think there are any "two way" of understanding debt crisis than this one. But Omaba and the left wingers have their own agenda to push.

Re: Student Loans Are A Drag On The Economy

#147

Post by nirnira »

tzs wrote: post #99
nirnira wrote: post #81

Why are student loans so high, the market so ridden with defaults, and the price of education so high? I think (well, I'm a little more certain than that) the answer is basic economics. Here's my take: You (America) have a government that offers discount loans - i.e. loans with poor prospects/low interests rates - in the hope of driving a higher allocation of capital to education than would occur in a pure private le…

> And again, because humans and humans, colleges, which in America have little government oversight as to pricing, raise their pricing. Why? Because people will still pay it. For whatever reason, colleges are able to bank on their prestige and identity, on the promise of access to important social circles, and so pure pressure for price is diluted Harvard could double its price, and still have no trouble filling ever…

Universities are run by people driven by a mixture of economic and ideological goals. I'm not saying they're purely in it for the money. I'm sure there are a lot of people involved who are genuinely passionate and excited about education.

But most people have a hard time saying no to a fancier car, house, and more holidays.

Alternatively, if you can get as much money out of your rich students/the government as possible, that's more money for grants for superstars from poor backgrounds.

Re: Student Loans Are A Drag On The Economy

#148

Post by srean »

nirnira wrote: post #120
ds9 wrote: post #109

Earlier quoted context omitted.

"the psychological effect of borrowing from the government - I think people tend to feel safer doing this than borrowing from an obviously competitive private firm. If you read the article, the casual attitude of student debtors to defaulting on their loans shows this - the government has no teeth. The private firm goes bankrupt if it doesn't get a return on investment. " All of the above is incorrect. (a) Student lo…

Thanks for the clarification, but it sounds like the net effect is exactly the same: bad loans are made, money is lost, the taxpayer is forced to subsidise the indiscriminate purchase of education. As always with such schemes, there is an ongoing push to implement them in as complicated and opaque a fashion as possible, to try and hide the naked fact of what is going on. So no one will admit "we take money from taxpa…

It seems to me that you have a-priori decided to whip a particular horse regardless of the context/relevance. Not arguing that particular horse should not be whipped, but its not the main horse in the race that is being discussed.

Re: Student Loans Are A Drag On The Economy

#149

Post by refurb »

carbocation wrote: post #53
jjoonathan wrote: post #33

Earlier quoted context omitted.

I don't know how it works for dentists, but my understanding is that for doctors we've essentially given the doctors' guild the ability to legally dictate how many medical graduates they will allow, making them the envy of unions around the world (and schools, who are very happy with an arrangement that allows them to auction off a restricted supply of meal tickets). Sometimes you'll hear the AMA blame congress becau…

> The other two thirds come from drug price overruns (US drug buyers pay twice as much as single-payer countries which have much more size = bargaining power) As an infuriating elaboration on your point, the United States has a huge single payer in Medicare that is by law prevented from effectively negotiating drug price.

Medicare isn't allowed to negotiate, but it automatically gets the average selling price, inclusive of all discounts. Disproportionate share hospitals get 23.1% discount. It's not like the US gov't isn't extracting it's share.

Medicaid IS allow to negotiate and has federally mandated discounts. Medicaid covers more people in the US than ANY of the Canadian provinces who do negotiate. What does that tell you?

Re: Student Loans Are A Drag On The Economy

#150

Post by dmix »

specialist wrote: post #131
nirnira wrote: post #81

Why are student loans so high, the market so ridden with defaults, and the price of education so high? I think (well, I'm a little more certain than that) the answer is basic economics. Here's my take: You (America) have a government that offers discount loans - i.e. loans with poor prospects/low interests rates - in the hope of driving a higher allocation of capital to education than would occur in a pure private le…

I have no idea what you're talking about. You can't analyze the current situation while ignoring the past and the changes (privatization) that have happened. Tuitions went up in the US because the govt has progressively withdrawn subsidies. Student loans amounts grew to match. Also, student loan writing was privatized, and collections have been given real teeth. I work in higher ed at a "public" university, which is…

> This is exactly the kind of bubble (price inflation running ahead of real value) that occurs when public goods are privatized.

What public goods are being privatized? Student loans? Universities?

Diploma Mills like University of Phoenix and a million other clones started flourishing as gov student loans became widely available. That is what you're competing with.

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