Skip to comments.Arbitrarily Low College Loan Interest Rates Harm Students, Taxpayers
Posted on 05/02/2012 2:27:49 PM PDT by MichCapCon
A government policy of subsidizing loans and encouraging people to borrow huge amounts that many wont be able to repay has run-up $1 trillion worth of questionable debt.
A growing number of experts fear that borrowers are paying more than the market can support, and some economists are warning of a bubble that could trigger a larger financial crisis. A spokesman for the Presidents Consumer Financial Protection Bureau says the industry is likely too big to fail.
Unfortunately, these are not headlines from the 2008 home mortgage meltdown. They instead describe current reports about the state of student higher education lending.
Last week, Republicans and Democrats in Congress agreed to a new round of student loan subsidies, capping the federal loan interest rate at the 3.4% set by Congress in 2007. For a number of reasons, this is likely to harm many students, taxpayers and potentially the U.S. economy itself...
(Excerpt) Read more at michigancapitolconfidential.com ...
Interesting that we never see people questioning the cost of that education. Along with that, when the government is supplying the money, the prices go up by leaps and bounds. If the government stopped supplying the money, you would see the cost of education go way down.
I advocate a tax credit for businesses which offer merit scholarships for fields they need and intend to hire. That way, the colleges turn out useful vocations instead of Marxist activists, industry gets the trained professionals they need to compete, and the student has no loan - it was a scholarship.
Much of the reason for the recent Obama-depression explosion in student loan debt and artificially low unemployment are the number of people hiding from the Great Depression 2 in college and paying for it via student loans.
They aren’t arbitrarily high or low. They are just arbitrary. 100% politics, 0% economics.
You, sir, have a brilliant idea.
The subsidized loans affect only 7.2 million who have a student loan subsidized by the government. http://blogs.reuters.com/felix-salmon/2011/10/21/the-murky-world-of-student-loan-statistics/ provides information that pretty much supports the contention that nobody knows anything about nothin’ when it comes to the student loan industry! They can’t even tell you how many millions ~ is it 30 or 40 or more ~ that have a student loan!
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