4 ms·
I feel like this article doesn't support it's thesis at all. Why does the government lending directly result in less downward price pressure than guaranteeing l
by woopwoop 4y ago
I feel like this article doesn't support it's thesis at all. Why does the government lending directly result in less downward price pressure than guaranteeing loans? The only hypothesis I can imagine is that people anticipated something like student loan forgiveness, but that requires more evidence than what is given here (after all the government could in theory waive private loans and reimburse the lender).
- nonethewiser 4y agoBecause the colleges get paid up front instead of going through the collection process 15 years later.
- woopwoop 4y agoColleges got paid up front before as well. The loans were not originated by the universities, they were originated by financial institutions.
- TimPC 4y agoA smaller fraction of government loans have very high interest rates for starters, so loans became cheaper money when they came directly from government rather than were insured by government.