Tiago Splitter wrote:
But if private capital is actually on the hook if the borrower defaults the problem is largely solved. Tuition and enrollment both go down.
As Campos has said just about anything would be an improvement over the current system. I'd even prefer a hardcore left-wing system of straight capping the number of people allowed in over the existing disaster.
To BearsGrl's point, we probably need to make the schools accountable by having them issue or guarantee at least part of the loan. That way if you really are capable of making it the school can let you in, but it prevents them from taking on just any idiot who can borrow from the government.
Not if the government got out of the way. But it's fair to suggest this won't happen. For those of us that support limited government, it's sad times.
I don't think it follows that private supplanting federal capital will lead to enrollment and tuition decreasing. For one, it would have the immediate aspect of restricting access to low-income applicants, while others might simply lean on their parents in conjunction with taking private loans.
After all that's happened over the past four years I just don't believe that private lenders are sufficiently risk-averse (not to mention how creative they are on shifting risk to investors) to shy away from the potential payouts lending to students could bring.
My hesitation in asking a school to guarantee a loan would be that it jeopardizes current students should the school itself fail.
Again, I think a better solution would be to shut down unnecessary schools, thus making it easier for graduates to pay off their loans in the first place and drop the 3rd year which would seriously decrease the cost of the education (and get people earning sooner.)