I don't know anyone with half a brain who would believe real inflation was only 194% during this whole time.
Tuition costs have risen 710% since 1983
381–390 of 771 posts
Re: Tuition costs have risen 710% since 1983
#382Earlier quoted context omitted.
> Now I read that Wall Street is creating CDO's based on these loans The official term is SLABS: Student Loan Asset Backed Securities. Here's a recent paper on the subject. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3631953
Have we learned...nothing?
Greed's gonna greed
Re: Tuition costs have risen 710% since 1983
#383Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees wit…
It only makes sense if you believe education is just like any other commodity whose price should be driven by market forces. Should government have any say in whether its citizenry gets educated? Is there a public interest in it? I can’t think of an easier way for e.g. China to win the 21st century. American undergrad enrollment is already down. As the world gets more technical, that is not a good sign. When an entir…
The rise in prices has largely been driven by schools going on real estate binges and bloating administrations.
Right before I graduated, my school decided to build a new football stadium, because they decided using the city's stadium wasn't attractive enough for students. They promised tuition wouldn't be used to pay for it, and it wasn't. We just got something like $500 added to student "fees" instead.
I have no sympathy for universities and colleges in the US, only for the students who were duped into thinking they didn't have another choice.
Re: Tuition costs have risen 710% since 1983
#384Earlier quoted context omitted.
Ah, free in the sense that the University got its money and can now ignore any consequences? It is NOT free to the student who is definitely affected. They are in debt and now crippled. But the university got it's money. If you want to blame the government. Why is it the governments fault that Universities are now behaving like scammers and charging more for less and leaving the 'customer' stuck. ---- Lets say I go t…
> Why is it the governments fault that Universities are now behaving like scammers and charging more for less and leaving the 'customer' stuck. Because the government is not doing its due diligence as a lender, because current voters and government employees have no problem soaking future taxpayers. And crippling uninformed 18 year olds’ futures.
> "Because the government is not doing its due diligence as a lender"
That is called regulation, and once you start putting in regulations, then everyone starts screaming about big government and over-regulation. There is no winning, put in protections and you are some big government commie bastard, don't put in protections and you are heartless and ineffectual.
And, I dare say, banks even in other areas where they could lose money (2008 real-estate), are just as eager to reel people in and ignore bad loans.
Re: Tuition costs have risen 710% since 1983
#385Earlier quoted context omitted.
This isn't going to happen because the whole point of the current government back student loan program is to give kids from not-ideal backgrounds access to credit, and hence access to the full range of schools available.
There is currently a shortage of people for the military, so let them join that for the education. Can pay for their schooling with service.
Pretty sure that has always been the case in US.
Re: Tuition costs have risen 710% since 1983
#386Earlier quoted context omitted.
I hope to see the day where interest bearing loans are recognized by the rest of the world as the evil they are. Muslims and Jews know this fact quite well.
Serious question: what would incentive anyone to lend to people who have any risk at all (i.e. everyone)?
Assuming such a rule would mean "all mandatory fees are prohibited" and that we're talking about profit driven ventures (not cooperatives or patrons that might have other reasons to want to lend money than monetary profits), you can be creative and charge money in ways that technically doesn't count as interest.
The Medici bank gained lots of their money from foreign exchange speculation issuing a sort of option for buying foreign currencies at a specific date (this would probably be a lot harder to do today), you could also charge late fees with the social understanding that paying a loan back on time is really bad for your credit score. I guess a modern conglomerate might make money by putting certain terms in effect: You want to build a house but need some money to do so? I will lend you the money if you contract my contractors to build your house. A university could lend you the money but keep charging extortionate tuitions as long as the cost for the education service is unregulated.
Re: Tuition costs have risen 710% since 1983
#387Earlier quoted context omitted.
> lenders that are taking on too much risk The lenders are taking no risks since these loans cannot be discharged through bankruptcy. There are also very large late fees and penalties that can triple (or more) the amount owed.
I mean, you can't get blood out of a turnip. If the borrower has no money to pay, they aren't going to pay, bankruptcy or not.
Since there is pretty much no social safety net, people are probably going to find some sort of work even if they have a lot of student loan debt. And, the debt servicer can garnish those wages. You are essentially selling yourself into slavery if you take a student loan! (And the reasoning is so weird to me; I went to a state school and tuition was $750/semester. Why are people paying more unless they are extremely gifted and they want to go into a highly regulated field like civil engineering or medicine?)
Student loans not being dischargeable through bankruptcy creates a moral hazard, much like bailing out banks. Banks will lend an infinite amount of money for student loans, because there is no risk to them. Creating free money always devalues it; if you have to work for your money, an education is priced $X because that's the maximum people will pay. If everyone gets unearned money to pay for education, it becomes worth $X + $Y. This is just the SaaS model for people. (Consider AWS; "oh you want to make money selling a SaaS service? we'll take 10% of your revenue for servers." Student loans are the same thing, "oh, you want to go into a high-earning field? we'll take 30% of your income for the next 10 years.")
Compare this to things where banks could lose money, like mortgages. If you bid $1,000,000 on a property that's worth $200,000, the bank will simply require a down payment of $840,000. They have no interest in your starry-eyed games. If you walk away, they can close out your loan by selling the property at the appraised value, and they're happy. Banks have the right amount of paranoia about lending for this kind of purchase; their goal is to never lose money. Student loans should be no different; current grades and expected job prospects should play heavily into the decision as to whether or not to lend money. This will reduce the cost of education because selling a $600,000 art history degree to straight-C students won't be viable in the market anymore. (Universities will fight hard against this, because the degrees are cheap and everyone pretends they have some value. If people realize degrees don't have much value, the cash cow dries up. But we have to kind of look at the effect on society as a whole and realize that work experience is actually what we value. After the first 4 years of your career, nobody cares about your GPA or where you went to school anymore. And incidentally, 4 years is exactly how long college takes!)
Re: Tuition costs have risen 710% since 1983
#388Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees wit…
Worse than just "backed by the federal government," the loans are basically protected by the government. Being one of the small list of things you can't bankrupt out of, the risk in giving out the loans has been fully pulled from the lenders. It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk. At…
> Worse than just "backed by the federal government," the loans are basically protected by the government.
It is really strange that government does not constrain tuitions of the colleges participating in the loan program. Currently, Universities have no incentives to control costs in any way.
Re: Tuition costs have risen 710% since 1983
#389Earlier quoted context omitted.
Most people desire not being poor over most other things.
There are a lot of ways to make money. Picking a job based on money is a good way to be absolutely miserable. My parents pushed me towards making money my entire life and there is nothing I regret more than following that advice. Every day I wake up dreading going to work and it seeps into every aspect of my life.
Yes, but your top regret would have been different had you chosen a different path. And perhaps your top regret would be worse than your current.
> every day I wake up dreading going to work
This sounds terrible. But at least you have a job. Many people wake up with dread every day for whether they or their baby will starve to death.
Also, it’s never too late to change.
Re: Tuition costs have risen 710% since 1983
#390Earlier quoted context omitted.
Crazy idea, but how about the gov just gives kids from not-ideal backgrounds access to grants and scholarships, rather than credit.
They do though. I was a Pell Grant recipient. All I did was fill out the FAFSA and the grant was automatically applied. That got me through community college debt free. When I transferred to a 4-year, I once again filled out the FAFSA and was eligible for an interest-free loan which covered the difference between tuition and my Pell Grant.
Pell grants are tiny though.
Really, the current grant system doesn't work.
We should tell the universities they must provide needs-based grants on their own and prohibit using ability to pay during admissions - or they don't receive federal grants. This way they aren't incentivized to continue to bloat costs (as happens now), since now the school is responsible for the costs.