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Yeah, as many others have pointed out this analysis is facile verging on just wrong. Do universities not compete for students? Why have costs gone up so much f

Yeah, as many others have pointed out this analysis is facile verging on just wrong. Do universities not compete for students? Why have costs gone up so much faster than inflation? It's not just a question of there being a huge pool of money, you can buy a car with loans and car prices haven't skyrocketed. The answer is that education is a weird "good" that's probably a Veblen good, among a lot of other reasons.

j15t 6y ago
>It's not just a question of there being a huge pool of money, you can buy a car with loans and car prices haven't skyrocketed. The obvious difference is that car loans are not Federally issued and defaults are possible. Hence creditors have to issue loans in a prudent manner or else they will incur a loss. Not everyone is able to acquire a car loan, and interest rates can be very high. These incentives do not exist in the student loan market and thereby subsidizing demand. Students become price inelastic.