> 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.
Reminds me of our healthcare system. And military contractors. And..
Extra layers of payment indirection seem to invite overcharging.
Note that universities also basically act as a cartel.
The loans: 1) Increased demand. 2) Increased what the market could bear. The result is Economic 101. There are no surprises here. p.s. Note: Roughly the same applies to mortgages. The idea that more affordable mortgages (i.e., 30 yr) was going to make homes more affordable, is comical at best. With a relatively fixed supply, increasing demand is only going to have one effect on price. And the solution? The 40 yr or 5…
That is obvious, but it used to be that admission needed some tests which most people simply cannot get past. Colleges lowered the bar of entry to make more money and that caused your point 2 and as well massively lowered the quality of the education making the diplomas not very worthwhile (known exceptions are there of course). Keep the bar to entry very high and you cannot have a reason for upping prices. Get a loa…
An economist would say the bar lowered to meet the demand. Demand that was willing to bear a higher and higher and higher price.
Literally all they have to do is limit the maximum loan size. Max $50k per year. Anything beyond that is not subsidized or requires proof of academic performance or ability to repay.
Then parents with money and pull in academic orgs will make sure that tuition will float just far enough above that limit that their children won't suffer from too much competition by the less fortunate. But then on the other hand I'm not really convinced that this would actually be worse than the model of betting (or worse: bidding, it's a market with limited supply of high-status slots) seemingly unbounded amounts…
> Then parents with money and pull in academic orgs will make sure that tuition will float just far enough above that limit that their children won't suffer from too much competition by the less fortunate
Universities do that already. "Need-based" financial aid ensures that the parental contribution is near the hardship threshold for low-income parents - tipping the scale toward those with greater ability to pay. And external scholarships are simply deducted from "financial need" and largely pocketed by the university (which usually prohibits the funds from being used to reduce the parental contribution.)
Isn't it wonderful to be in a business that requires customers to turn over their financial records and charges based on "ability to pay?"
Society is better off as a whole with a well educated populace. We shouldn't optimize for college only for kids who can learn to program or whatever. Most other developed nations manage to send every smart kid to college for ten thousand dollars per kid or less. Once again, it is only the US that thinks it is a special butterfly that can't somehow manage to give kids college. Sure, most European colleges don't spend…
Define well educated populace. Does this mean ability to read, write, and do arithmetic? Does this mean the ability to speak and read Latin with an understanding of the classics and the Bible? The ability to fix a car and build an engine? Program a computer? One could argue that a university does very little to make a populace more educated, since they can already read, write and do basic math (or should be able to)…
> One could argue that a university does very little to make a populace more educated, since they can already read, write and do basic math
Universities build on this so that people can do more than just the three R’s…
> Is taking psychology making one better educated?
My preferred solution is to establish an open university in the US (or make it borderless), through which anyone can earn a degree remotely for as little cost as possible -- like $5000 per year or $20k per degree. Georgia Tech and others have shown this is possible (see their 13 MS degree programs in engineering). Certainly by enlisting the growing set of tools used for remote professional collaboration, it should be…
See: - Western Governors University (WGU) - Open University (OU) Both online; both relatively cheap. N.B. Georgia Tech’s online masters programs are professional masters and not research/thesis masters — so unless you are getting paid by someone else to get them, they are almost certainly a waste of money (and there is negative selection pressure during hiring for people with these sorts of degrees).
> there is negative selection pressure during hiring for people with these sorts of degrees
The loans: 1) Increased demand. 2) Increased what the market could bear. The result is Economic 101. There are no surprises here. p.s. Note: Roughly the same applies to mortgages. The idea that more affordable mortgages (i.e., 30 yr) was going to make homes more affordable, is comical at best. With a relatively fixed supply, increasing demand is only going to have one effect on price. And the solution? The 40 yr or 5…
Agreed. The real question is: do they produce a net positive effect for society?
If the government needing to grant mass amnesty from loans / loan payment then that's a net positive, yes? Lol
NPR did some reporting on this a couple years ago: https://www.npr.org/2019/07/11/739860400/broken-promises-tea... "By the department's last count, only 1% of the people who think they've made their 10 years of payments and apply for loan forgiveness are getting approved. If you took all the people getting rejected and got them together in one place, Peterson says, you'd have "football stadiums full of nurses, firefi…
The PLSF has been significantly overhauled since 2019, and continues to be made easier to qualify (and be approved) for.
Yep, 2019 was the first year people would have become eligible for this, as I recall. There's has been federal focus on streamlining the application process since then.
Society is better off as a whole with a well educated populace. We shouldn't optimize for college only for kids who can learn to program or whatever. Most other developed nations manage to send every smart kid to college for ten thousand dollars per kid or less. Once again, it is only the US that thinks it is a special butterfly that can't somehow manage to give kids college. Sure, most European colleges don't spend…
Define well educated populace. Does this mean ability to read, write, and do arithmetic? Does this mean the ability to speak and read Latin with an understanding of the classics and the Bible? The ability to fix a car and build an engine? Program a computer? One could argue that a university does very little to make a populace more educated, since they can already read, write and do basic math (or should be able to)…
It's not a "congratulations, you are now well-educated" mark. The more educated the population is, the better. Now, at some point there are trade-offs and diminishing returns (if your entire population is busy studying philosophy and everybody starves, that's bad), but considering how much absolutely worthless shit society dumps money into, we have plenty of slack.
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…
> Should government have any say in whether its citizenry gets educated? Is there a public interest in it? That's a very dangerous road. Governments are not some benevolent creature which always acts in the best interests of the People. As a practical matter, governments are usually incompetent and corrupt (usually in that order), and try to get the masses to further the interests of the politicians, the bureaucrats…
Strangely, almost all other advanced economies have been able to provide affordable education for their citizenry without it devolving into Nineteen Eighty Four. I wonder what makes the US government so uniquely malevolent.