3 ms·
I've always thought that it's the loans that end up raising tuition. It's the same way the easy loans raised housing prices. Too much money chasing too few go
by coglethorpe 18y ago
I've always thought that it's the loans that end up raising tuition. It's the same way the easy loans raised housing prices. Too much money chasing too few goods.
- j2d2 18y agoHmm... I wonder how often these loans default and if the derivatives markets trade them...
- randombit 18y agoI'm not sure about the derivatives market part, but remember that (in the US, at least) most student loans are administered by the federal government, and are 'guaranteed' by them. That means if you don't pay up, the government will fuck with you in all the various ways a government can (confiscation of tax refunds, wage garnishment, etc - and don't forget student loans are not covered by bankruptcy). That is why my loan interest is less than 2% over the fed funds rate - it's worth it to loan money at that rate, because there is effectively no way to avoid having to pay up, short of dying.
- aswanson 18y agoRaising tuition by how much? Back in the 90s when I was an undergrad an unsubsizded stafford max was about $2600. Last time I checked (2005) the max was still around $2600 in 2005 dollars! They didn't even add on yearly for inflation. So whatever is driving costs, I seriously doubt government largesse.