3 ms·
The loans: 1) Increased demand. 2) Increased what the market could bear. The result is Economic 101. There are no surprises here. p.s. Note: Roughly the sam
by chiefalchemist 3y ago
The loans:
1) Increased demand.
2) Increased what the market could bear.
The result is Economic 101. There are no surprises here.
p.s. Note: Roughly the same applies to mortgages. The idea that more affordable mortgages (i.e., 30 yr) was going to make homes more affordable, is comical at best. With a relatively fixed supply, increasing demand is only going to have one effect on price. And the solution? The 40 yr or 50 yr mortgage.
Round and round we go.
- somewhat_drunk 3y agoAgreed. The real question is: do they produce a net positive effect for society?
- chiefalchemist 3y agoIf the government needing to grant mass amnesty from loans / loan payment then that's a net positive, yes? Lol
- anonzzzies 3y agoThat is obvious, but it used to be that admission needed some tests which most people simply cannot get past. Colleges lowered the bar of entry to make more money and that caused your point 2 and as well massively lowered the quality of the education making the diplomas not very worthwhile (known exceptions are there of course). Keep the bar to entry very high and you cannot have a reason for upping prices. Get a loan when you are actually really good and otherwise don’t get in, even if your parents have billions.
- chiefalchemist 3y agoAn economist would say the bar lowered to meet the demand. Demand that was willing to bear a higher and higher and higher price.