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Chart of the Day: The Higher Education Bubble
The American ^ | July 25, 2011 | Mark J. Perry

Posted on 07/25/2011 11:36:05 AM PDT by Cheap_Hessian

AEI’s Michael Barone wrote recently about the higher education bubble, which could also described as a “low-interest education loan bubble” to reflect the government’s role in subsidizing higher education, similar to its role in subsidizing homeownership. The topic has been receiving a lot of attention lately, and there is even now a Wikipedia listing for “higher education bubble.”

(Excerpt) Read more at ...

TOPICS: Business/Economy; Education; Government
KEYWORDS: bubble; college; inflation; price

1 posted on 07/25/2011 11:36:10 AM PDT by Cheap_Hessian
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To: Cheap_Hessian

Surprise, surprise, two of the biggest subsidized things in the economy — higher education and housing — cost more than other market driven things.


2 posted on 07/25/2011 11:39:36 AM PDT by Tulane
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To: Cheap_Hessian

Well, let’s see....

“Free money” for students who don’t feel compelled to pay back loans
Out-of-touch career advisors who have little understanding of real-worls needs
Social pressures to pay excessive rates to send the little darlings to prestigious schools vs local community colleges
People getting PhDs in stupid stuff with zero employability
Dominance of liberalism and filling skulls with anti-American commie liberal mush
Union permeating faculty and staff, public and private

wow, who’d have seen this “bubble” coming?

3 posted on 07/25/2011 11:46:51 AM PDT by bigbob
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To: Tulane

Here is one fallacy that is being repeated even by conservative pundits.

“And, unlike a bad mortgage on an underwater house, Munna can’t simply walk away from her student loans, which cannot be expunged in a bankruptcy. She’s stuck in a financial trap.”

The Democrats have created an elaborate system of soft default options. Income contigent repayment is a form of soft default although Democrats wanted better options. Government and non profit employees get their student loan debts discharged after 10 years provided some conditions have been met. For everyone else, the discharge date is 15 or 20 years. In addition, Democrats have artificially reduced interest rates.

Disability is a much better option than these default options. The public is unaware that student loan debts can be discharged through a disability claim. Right now the Education Department controls disability claims for student loans. However, student interest groups are lobbying hard to move the disability claims to the Social Security Administration. Obtaining disability through the SSA is not difficult although paying a service for advice may be necessary. SSA disability claims are never reviewed after the claim is awarded. There are many soft disability claims that can easily be made by large numbers of former students.

We are headed for a tsunami of soft student loan defaults in the coming decade. These defaults will never appear on the government books. Democrats created took control over the student loan programs to increase the subsidies for higher education while arguing that government control saved $60 billion. Democrats greatly extended soft default options ensuring a wave of defaults.

4 posted on 07/25/2011 11:59:52 AM PDT by businessprofessor
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To: bigbob

Actually, most college and university faculty are not unionized, and most of the rising costs have been paying for increases in the number of and salaries of university administrators and staff serving administrators. This is more akin to the corruption on Wall Street with managers paying each other fat bonuses than it is to the corruption in the public schools.

5 posted on 07/25/2011 12:04:24 PM PDT by The_Reader_David (And when they behead your own people in the wars which are to come, then you will know. . .)
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To: businessprofessor
Obtaining disability through the SSA is not difficult

Soon the royal blue prime parking spots will be filled up and electric carts that support 500 lbs. of passenger will be everywhere.

6 posted on 07/25/2011 1:02:45 PM PDT by Reeses (Obamacare: do not resuscitate)
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