Posted on 11/26/2012 11:10:43 AM PST by SeekAndFind
For a number of years now, a number of critics of the American system of higher education have rightly insisted that there is a "bubble" in the system, with more and more students running up loans in amounts they will find difficult to pay back.
This bubble has been fueled by the federal government's lavish subsidization of the student loan program (which was nationalized four years ago), in a way similar to how the housing bubble was fueled by government agencies pushing subprime mortgages.
This extensive government largess has produced a number of unintended -- though not necessarily unforeseeable -- negative consequences. First, it has dramatically driven up the tuition and fees charged by colleges, which in turn has forced more students to take out loans. This should have been easy to foresee, since the agents running the colleges would know that their clients had access to government-backed loans and so would jack up tuition quickly to extract that money.
Second, this flood of money has only encouraged administrative bloat, which in turn has increased college costs with no increase in the quality of education. Again, this should have been foreseeable. The administration would be rationally well-informed about the new honey-pot of taxpayer-backed loans, and the self-interested administrators are the ones who decide where to spend the money, so you don't need to guess where they will (and did) spend it.
Third, the rising price of college tends to erase the potential returns of a college education for students of only average ability. In effect, like homeowners who refinance their homes only to squander the increased equity, many students are spending more (and borrowing more) of whatever future extra earnings their college educations will bring.
(Excerpt) Read more at americanthinker.com ...
My oldest is a Grove City student. Their refusal to deal with the Federally backed loan system was a big reason I applied (light) pressure to go there.
bump
the banks were the ones cut out of the system.
A little history.
In the 60’s these were NDSL loans. National Defense Student Loans
In the 70’s these were changed to National Direct Student Loans
In the 80’s and 90’s the banks took over to administrate these loans.
Slowly these centralized again and we are not back to govt loans.......................................
It seems like everyone between the age of 23 and 30 that I run into these days is “going to college”. I wonder if they’ve figured out some way to use that as a means of supporting themselves, or what’s going on.
I believe that you’d have to start with a maximum limit of how much you can borrow for any two-year program or four-year program, or six-year program. I don’t any kid should be stupid enough to borrow more than $40k for his four-year degree. If you go beyond that....you probably will never be able to pay it off.
I’d also say that if you pick a subject area like French literature....you probably shouldn’t get a penny of government loans for it.
“he looks at me like I just sodomized a disney character.”
You did what?
A lot of people are convinced they can run up the student loans and then wipe it out by declaring bankruptcy. They are in for a surprise. They also know you can postpone paying the student loan debt for a very long time.
http://archive.truthout.org/student-loans-the-government-is-now-officially-banking-business58148
This may not be the best article on the subject, was just one of the first ones I found by googling. But seems to support that the government forced banks out of the student loan business.
The same 50.6% who put The One back in charge will eventually vote to forgive their own loans.
If they have completely converted to the Hillsdale College model, then good for them! As you may know, Hillsdale's wildly successful model is now into its second decade. They have a pool of lenders lined up to give its students low interest loans plus a fund from alumni donations which renews itself for repayments. Conservative colleges teach character and, thus, their graduates are good risks for paying things back.
I think they have a real dilemma. If they do that, then SallieMae is out of business and with it the government pipeline of money to the academic industrial complex.
There is NO constituency this Communist won't buy with YOUR earnings, period....Whatever it takes, he'll send YOUR money for it.....
A program where 4 years military service erases 40,000 grand in loans.
Instantly the problem is solved, loans will only be made then to good characters with prospects."
Oh yeah; just like the Qualifications to force Banks to make mortgage loans to the Welfare Queens, which were never paid back, Guaranteed by the Taxpayers, and we know how THAT worked out!
This is another bailout for Banks, who are ALWAYS made whole, now, regularly at the expense of The Taxpayer when necessary.
actually what they do right now is try to hook the parents into co-signing.
PLUS loans are just as bad as the student loans themselves-- the parents are forever on the hook. Even if the kid agrees to take over the payments, chances are they will not be able to do so in today's economy and still service the loans they already have on their own.
The educrat-student loan industry is an alliance of evil which probably hooked just enough people to re-elect ObaMao on his vague promise of student loan forgiveness to make the difference.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.