re-applicant wrote:bigben wrote:MrAnon wrote:All these answers are a bit off the mark. The answer is the open and free availability of student loans. You simply need to have a heartbeat and decent but not great credit to borrow $60,000 per year for school. Any private lender will gladly give it to you because it is none dischargeable so that no matter what happens you or your family is on the hook. Doesn't matter whether you get a job or not or go to Yale or Ave Maria. The government also guarantees much of this money should the student default, to the extent he is permitted. If the government decided tomorrow not to guarantee loans and if loans became dischargeable in bankruptcy court then you'd see some changes in the entire educational system. Crap schools would start to fold because there would be no demand for them.
Correct. With the latest student loan "reform," this money is now coming directly from the government, and the outright funding of individuals' education by taxpayers has begun in the form of IBR. Unless we stop funding higher education and undergo the necessary painful readjustments, higher education will become yet another massive taxpayer liability subject to quasi-control by the government.
I'm not interested in getting into an ideological debate on here, but I just thought I'd point out that "stop funding higher education" isn't the only possible course of action implied by this insight. We could also just be stricter about how much government-sponsored debt can be issued and try to force tuition prices down.
You're right. I didn't mean to make it sound so black and white. Significantly limiting the amount of loans available is certainly an option and something I would support. I'm just skeptical that the government would do this very well if at all. Should it be a universal cap on loans for any program? That seems problematic, since surely some programs are necessarily more costly than others, and surely some programs add more economic value than others. Should the government therefore undertake a valuation of each higher education program to determine how much each individual should be loaned? This seems politically infeasible. Even if it were politically feasible, it seems practically infeasible for a central decision maker to arrive at the correct values. Most likely the government will simply ignore these problems and continue to make significant amounts of loans available for any reason, while perhaps imposing some slight limits. Egregious overspending (spending more than the minimum theoretically necessary to create the same economic value) will continue. To deal with the growing number of people that can't afford to pay their debts, programs like IBR will be expanded.
Even if my particular vision doesn't play out, it's still not clear that higher education won't continue to become a massive taxpayer liability and subject to more government controls.
I think people who disagree with me would say two things. First, "so what?" They don't think it's a big deal for taxpayers to have another massive liability and see no problem with some government control over higher education. Second, I think some would argue that higher education should be about more than just economic value, or that there are economic values in higher education that are harder to detect. In other words, young people should get to go to college just because it's a nice enriching fun experience, even if it does absolutely nothing to prepare them for a career. Or, college is valuable because it makes our citizenry more informed, enlightened, etc. which somehow contributes to economic prosperity. I personally think these arguments are very weak but I won't get into that.
