The lenders that give out these loans therefore have essentially no risk and are highly incentivized to give out loans to any and every person that wants one, regardless of their creditworthiness or future earning potential. Universities have responded to this glut of money and demand by raising prices.
The solution is to allow student loans to be discharged through bankruptcy. Banks will respond by properly evaluating the risk of each loan instead of giving them out like candy. This will result in less students going to college, but that’s a fair price to pay to correct this massive distortion in the market.
No, debt is never inherited. The cases you are thinking of is where the family members are cosigners on the loan. Nobody's child/sibling/parent/grandparent is ever responsible for a loan they didn't sign.
Remember the uproar over Orbitz (and others) price discrimination based on Mac/iOS usage? [1]
Schools have been doing the same thing in broad daylight for years and years with far greater consequence, basing their price on your parent's income levels.*
And near zero public blowback. It's confusing.
* This is all done through school scholarships, but there's practical difference between that and a more direct price adjustment.
[1] https://www.wsj.com/articles/SB10001424052702304458604577488...
That is literally half my mortgage. For a single child. For years.
It seems like there should be a market opportunity for an above-median school that charges below-median tuition by just charging everyone the same amount, and then picking up slews of high quality middle class students.
I suspect what's preventing it is the state universities. The states with large middle class populations also generally have above-median state schools with below-median tuition for in-state students, so the market is already served and the public universities out-compete the private ones without an existing endowment because they're subsidized with public money.
It's also quite unfortunate because it locks everyone into the university of their own state, so they don't really have to compete with each other and the students in a state with a poor quality state university get the shaft.
What the states could do to improve this is to separate "in-state tuition" from the state university -- if you qualify for in-state tuition then you get that much money toward your tuition no matter which school you attend. It would probably devastate the state universities (because they wouldn't be competitive if people had that choice), but if the replacement would be better and cost less...
Society needs to decide that we want transparency, accountability/accounting, and I believe we need to focus on promoting a unit cost structure, so people can see the full relative cost; what are the different models, what ecosystems/cities are using which model, and how can I "vote" for that system model by spending/buying into the model that I want to be perpetuated?
Property taxes would actually be different. The more you own, the bigger the effort the state has to gear towards you to guarantee you your ownership. Laws, law enforcement, judges, fire department in case it catches fire etc.
Income taxes are the largest most discriminating schemes ever.
It took an entire constitutional amendment before it was adopted in the U.S.
you can damn well bet you will entire degrees built around the limits if they were in place. put it down to this course is worth X per credit and this degree is worth X amount and requires a set of course credits that will have loan money available.
as to the article in question, one variable was missing. buyers won't accept homes and features that they can easily afford but are influenced by TV and other forms of marketing let alone the old keeping up with the Jones
The idea that student loans leads to higher tuition prices has always been a politically motivated talking point from the right as opposed to something based in reality. Going to college or often going to as good a school as you can get into and afford is considered more important than ever before and disposable income and wealth among the upper middle class in the US have been going up significantly, not to mention among the global elites who see US colleges as status goods. On the supply side, prestigious institutions are hardly expanding their capacity for fear of losing prestige and school administrations are becoming increasingly market-savvy and less willing to charge less than below-market prices for otherwise wealthy students and their parents.
I'm trying to be generous in my response, and assume that you aren't simply trying to justify a philosophical position.
True, prices will also fall when interest rates rise, but it’s been a generation since that’s been practical knowledge.