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"In short the loan system is transferring the benefits of the education away from the students and allowing the institutions to take it for themselves instead."
by api 11y ago
"In short the loan system is transferring the benefits of the education away from the students and allowing the institutions to take it for themselves instead."
That is by far the most concise summary I've ever read of the nature of the problem.
Would you say that the same thing is true to a lesser extent in the housing market? It's not as bad, but there's a huge amount of loan subsidy there that's driving the price of housing crazy.
- crabasa 11y agoIt's a nice analogy, but at least in the housing market you're equally likely to be a winner (sell before crash) as a loser (buy before crash).
- api 11y agoIs there a general principle here? Do loan subsidies lead to a condition in which the loan recipients are able to reap the benefits intended for loan originators through progressive inflation and risk transfer?
- noonespecial 11y agoI think what we've got here is a misalignment of the participants' roles courtesy of unintended consequences. The recipients have become the schools, deriving all of the benefits with no risk. The originators have escaped their traditional role as gatekeepers and risk takers. That leaves the students for all of the risk to concentrate on while they receive few of the benefits. Essentially becoming sharecroppers of their own minds.