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Essentially, the loans act as subsidies for colleges. For the student, it's a different story. And as with medical care, the response to price increases has be

Essentially, the loans act as subsidies for colleges. For the student, it's a different story. And as with medical care, the response to price increases has been to shovel more money. >Ultimately, college is expensive in the U.S. for the same reason MRIs are expensive: There is no central mechanism to control price increases. “Universities extract money from students because they can,” Let me rephrase - There is no mechanism of any kind to control price increases.

prostoalex 8y ago
Not that it’s that prevalent but lack of demand serves as a kind of price constraint https://www.insidehighered.com/news/2017/11/13/spate-recent-college-closures-has-some-seeing-long-predicted-consolidation-taking https://www.insidehighered.com/news/2017/11/13/spate-recent-...
mbrumlow 8y ago
There was before the government got its hands in it. Before guaranteed loans students had to be verified based off their merritt to get a loan. Lenders took a real risk and had incentives in the person being successful so they would have hopes of the loan being paid back. This was near perfect as schools could not not charge more than lenders would risk. Thes solution in this case is to remove the government guarantee, and let the free market work.
- kingaillas 8y ago
  Another solution would be to let students discharge their debit via bankruptcy. Surely you wouldn't want that terrible government distortion to the free market remain in place? This system is also near perfect as lenders would evaluate their risk and have incentives in the person being successful. This works very well, as we saw from how mortgage lenders and credit rating agencies worked 10 years ago. >let the free market work. Education (and healthcare for that matter) are NOT free markets. Free markets don't guarantee every buyer gets matched to a seller, in which case that buyer does without. Which is not acceptable for education or healthcare. Maybe that's fine in some circles but a modern wealthy superpower should be able to do better than throw some percentage of its own citizens in the trash because they can't afford education. Also, way back when college was "affordable", states actually funded higher education through taxes.
  - sheepmullet 8y ago
    > in which case that buyer does without. Which is not acceptable for education Why is that not acceptable? If companies only hired for the skillset they actually required a huge number of people would happily drop out of higher education. I’d say the majority would.
  - mbrumlow 8y ago
    > Another solution would be to let students discharge their debit via bankruptcy. So you are going to force loaners to loan to people that can simply discharge it? I am not sure you understand how a loan works. Somebody risk their money for the chance to get the original amount back plus some. If the institutes making loans can't recoup at what they put in then they too will also go bankrupt. And if they can't make any profit then there is no incentive to loan the money. > Education (and healthcare for that matter) are NOT free markets. They most cerentety are. And them being part of a free market where people can make money has also allowed it to give humanity some of the best healthcare ever. > Which is not acceptable for education or healthcare. You are right, education is free, pick up a book at your local library. There is nothing stopping the masses from learning the same subjects today. On the other hand attending private institute that offers assistance in learning is not a right. Every time these free collages ideas come about it irks me so much because you have every right and means to educate yourself on a topic. > Maybe that's fine in some circles but a modern wealthy superpower should be able to do better than throw some percentage of its own citizens in the trash because they can't afford education. No, instead we can just trash the entire country because of feels. In any case, put your money where your mouth is. Let me pick at random somebody applying for a loan today and let me fund their schooling with your money. If this person becomes successful they will pay you back. If they find it is too much of a burden, or they don't finish school you lose your money and never see it again.
    - deleted 8y ago
      [deleted]
  - solidsnack9000 8y ago
    Another solution would be to let students discharge their debit via bankruptcy. That would be removing the government guarantee -- and letting the free market work. Education (and healthcare for that matter) are NOT free markets. Free markets don't guarantee every buyer gets matched to a seller, in which case that buyer does without. Or vice versa. Sometimes there are leftover bread rolls at the end of the day -- the seller produced a surplus. Sometimes there's empty seats in a class room. Doesn't sound so bad, that way.

prostoalex 8y ago

Not that it’s that prevalent but lack of demand serves as a kind of price constraint https://www.insidehighered.com/news/2017/11/13/spate-recent-college-closures-has-some-seeing-long-predicted-consolidation-taking https://www.insidehighered.com/news/2017/11/13/spate-recent-...

mbrumlow 8y ago

There was before the government got its hands in it. Before guaranteed loans students had to be verified based off their merritt to get a loan. Lenders took a real risk and had incentives in the person being successful so they would have hopes of the loan being paid back. This was near perfect as schools could not not charge more than lenders would risk. Thes solution in this case is to remove the government guarantee, and let the free market work.

kingaillas 8y ago
Another solution would be to let students discharge their debit via bankruptcy. Surely you wouldn't want that terrible government distortion to the free market remain in place? This system is also near perfect as lenders would evaluate their risk and have incentives in the person being successful. This works very well, as we saw from how mortgage lenders and credit rating agencies worked 10 years ago. >let the free market work. Education (and healthcare for that matter) are NOT free markets. Free markets don't guarantee every buyer gets matched to a seller, in which case that buyer does without. Which is not acceptable for education or healthcare. Maybe that's fine in some circles but a modern wealthy superpower should be able to do better than throw some percentage of its own citizens in the trash because they can't afford education. Also, way back when college was "affordable", states actually funded higher education through taxes.
- sheepmullet 8y ago
  > in which case that buyer does without. Which is not acceptable for education Why is that not acceptable? If companies only hired for the skillset they actually required a huge number of people would happily drop out of higher education. I’d say the majority would.
- mbrumlow 8y ago
  > Another solution would be to let students discharge their debit via bankruptcy. So you are going to force loaners to loan to people that can simply discharge it? I am not sure you understand how a loan works. Somebody risk their money for the chance to get the original amount back plus some. If the institutes making loans can't recoup at what they put in then they too will also go bankrupt. And if they can't make any profit then there is no incentive to loan the money. > Education (and healthcare for that matter) are NOT free markets. They most cerentety are. And them being part of a free market where people can make money has also allowed it to give humanity some of the best healthcare ever. > Which is not acceptable for education or healthcare. You are right, education is free, pick up a book at your local library. There is nothing stopping the masses from learning the same subjects today. On the other hand attending private institute that offers assistance in learning is not a right. Every time these free collages ideas come about it irks me so much because you have every right and means to educate yourself on a topic. > Maybe that's fine in some circles but a modern wealthy superpower should be able to do better than throw some percentage of its own citizens in the trash because they can't afford education. No, instead we can just trash the entire country because of feels. In any case, put your money where your mouth is. Let me pick at random somebody applying for a loan today and let me fund their schooling with your money. If this person becomes successful they will pay you back. If they find it is too much of a burden, or they don't finish school you lose your money and never see it again.
  - deleted 8y ago
    [deleted]
- solidsnack9000 8y ago
  Another solution would be to let students discharge their debit via bankruptcy. That would be removing the government guarantee -- and letting the free market work. Education (and healthcare for that matter) are NOT free markets. Free markets don't guarantee every buyer gets matched to a seller, in which case that buyer does without. Or vice versa. Sometimes there are leftover bread rolls at the end of the day -- the seller produced a surplus. Sometimes there's empty seats in a class room. Doesn't sound so bad, that way.