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Cheap or free money tends to get captured by for-profit service providers, who raise their prices accordingly. Example: The upward spiral of for-profit college

Cheap or free money tends to get captured by for-profit service providers, who raise their prices accordingly. Example: The upward spiral of for-profit college tuition cost is widely thought to have been driven in large part by the availability of federally-guaranteed student loans and Pell grants. [0] [0] https://www.npr.org/2018/12/13/672952507/does-more-federal-aid-raise-tuition-costs-not-for-most-students-research-says https://www.npr.org/2018/12/13/672952507/does-more-federal-a...

akvadrako 7y ago
Federal guaranteed student loans have nothing to do with UBI. It's hard to argue that college fees would have gone up so much if the government just gave a fixed $10000/year loan to every student-age citizen and let them spend it on whatever they want. In an important way they are opposite: UBI incentivizes price discovery; government backed college loans decentivize it.
- dctoedt 7y ago
  > Federal guaranteed student loans have nothing to do with UBI. If you say so. > It's hard to argue that college fees would have gone up so much if the government just gave a fixed $10000/year loan to every student-age citizen and let them spend it on whatever they want. Really? I find it very easy to imagine, since IIRC student loans can be spent not only on tuition but on living expenses — and it seems to be possible to spend it on anything you want, even though you're not supposed to do that. [1] But I'm out of touch in that area, so my experience could be out of date. The NPR piece that I cited above discussed research indicating that for-profit college tuition costs were strongly influenced by the availability of guaranteed student loans. > UBI incentivizes price discovery I suppose that's possible. But analogously, the availability of employer-provided health insurance seems to disincentivize price discovery. [1] https://studentloanhero.com/featured/what-can-i-spend-student-loans-on/ https://studentloanhero.com/featured/what-can-i-spend-studen...
  - akvadrako 7y ago
    > the availability of employer-provided health insurance seems to disincentivize price discovery. That I certainly agree with.

akvadrako 7y ago

Federal guaranteed student loans have nothing to do with UBI. It's hard to argue that college fees would have gone up so much if the government just gave a fixed $10000/year loan to every student-age citizen and let them spend it on whatever they want. In an important way they are opposite: UBI incentivizes price discovery; government backed college loans decentivize it.

dctoedt 7y ago
> Federal guaranteed student loans have nothing to do with UBI. If you say so. > It's hard to argue that college fees would have gone up so much if the government just gave a fixed $10000/year loan to every student-age citizen and let them spend it on whatever they want. Really? I find it very easy to imagine, since IIRC student loans can be spent not only on tuition but on living expenses — and it seems to be possible to spend it on anything you want, even though you're not supposed to do that. [1] But I'm out of touch in that area, so my experience could be out of date. The NPR piece that I cited above discussed research indicating that for-profit college tuition costs were strongly influenced by the availability of guaranteed student loans. > UBI incentivizes price discovery I suppose that's possible. But analogously, the availability of employer-provided health insurance seems to disincentivize price discovery. [1] https://studentloanhero.com/featured/what-can-i-spend-student-loans-on/ https://studentloanhero.com/featured/what-can-i-spend-studen...
- akvadrako 7y ago
  > the availability of employer-provided health insurance seems to disincentivize price discovery. That I certainly agree with.