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What enabled this greed scheme to work? Government guaranteed loans. The schools and institutions need to have some of their own skin in the game.

by jrs235 10y ago

ams6110 10y ago
The students too. If they are spending their own money they will (at least be more likely to) care more about what they are spending it on.
- jrs235 10y ago
  Touche. Perhaps full deferment should be changed to paying back $200 / month even while enrolled. I know this is controversial. But at least then the students might feel the pinch and squeeze that the loans will have on them and it might also help them learn personal finance. If a student is unable to make the payments and go into default then they'll have to take a semester off and make some money (this would also prevent some from going much much deeper into debt). All around its a crappy situation. But most high school graduates probably think Caveat Emptor was some Roman ruler...
  - traviscj 10y ago
    > and it might also help them learn personal finance. Also, everyone should learn C/assembly why trying to learn how to make websites, because it might also help them learn pointers.
- azemetre 10y ago
  How are students able to determine if the education they are paying for is valid or not? How are students that are in at-risk populations able to differentiate between valid accredited solutions and predatory schemes? It's very easy to take advantage of certain people. I'm glad the government is doing its job protecting people from unfair practices. If information asymmetry wasn't so exceedingly common maybe we wouldn't have to deal with consumers making poor mistakes because they "should have known better."
  - jrs235 10y ago
    The government "freely" giving people money to spend on questionable goods and services doesn't help or protect the vulnerable people. The government "failed" first, the for-profits ripped people off, now the government is "saving" the vulnerable people that they allowed to get into the crappy situation by allowing them to accrue loads of debt to start with.
Yhippa 10y ago
How was this allowed to go on for so long though? I remember seeing commercials on TV for ITT and ECPI growing up in the 80's.
- jrs235 10y ago
  Not sure. I would suspect it may have to do with less funding from states helping to offset public state school tuition. This probably made it easier for private for-profit schools to charge high prices and still appear competitive. Now more students "needed"/relied on loans and the government jumped in to support them. It was probably harder to get thousands of people to pay thousands of dollars for a private no-name for-profit college when those that were "qualified" could go to a state school for much less.

What enabled this greed scheme to work? Government guaranteed loans. The schools and institutions need to have some of their own skin in the game.

by jrs235 10y ago

What enabled this greed scheme to work? Government guaranteed loans. The schools and institutions need to have some of their own skin in the game.

ams6110 10y ago

The students too. If they are spending their own money they will (at least be more likely to) care more about what they are spending it on.

jrs235 10y ago
Touche. Perhaps full deferment should be changed to paying back $200 / month even while enrolled. I know this is controversial. But at least then the students might feel the pinch and squeeze that the loans will have on them and it might also help them learn personal finance. If a student is unable to make the payments and go into default then they'll have to take a semester off and make some money (this would also prevent some from going much much deeper into debt). All around its a crappy situation. But most high school graduates probably think Caveat Emptor was some Roman ruler...
- traviscj 10y ago
  > and it might also help them learn personal finance. Also, everyone should learn C/assembly why trying to learn how to make websites, because it might also help them learn pointers.
azemetre 10y ago
How are students able to determine if the education they are paying for is valid or not? How are students that are in at-risk populations able to differentiate between valid accredited solutions and predatory schemes? It's very easy to take advantage of certain people. I'm glad the government is doing its job protecting people from unfair practices. If information asymmetry wasn't so exceedingly common maybe we wouldn't have to deal with consumers making poor mistakes because they "should have known better."
- jrs235 10y ago
  The government "freely" giving people money to spend on questionable goods and services doesn't help or protect the vulnerable people. The government "failed" first, the for-profits ripped people off, now the government is "saving" the vulnerable people that they allowed to get into the crappy situation by allowing them to accrue loads of debt to start with.

Yhippa 10y ago

How was this allowed to go on for so long though? I remember seeing commercials on TV for ITT and ECPI growing up in the 80's.

jrs235 10y ago
Not sure. I would suspect it may have to do with less funding from states helping to offset public state school tuition. This probably made it easier for private for-profit schools to charge high prices and still appear competitive. Now more students "needed"/relied on loans and the government jumped in to support them. It was probably harder to get thousands of people to pay thousands of dollars for a private no-name for-profit college when those that were "qualified" could go to a state school for much less.