This is a hypothetical but classic example of how regulation is required to support a free market.
This comment is an example of how any amount of problems caused by government intervention can be framed as a need for more government intervention.
But, the cost of school has outpaced inflation for that period, making the situation worse. No question about that.
We'd probably all be better off if the government simply gave grants to students who meet some minimum threshold. Call it top 20% of class or thereabouts.
It's the cost of the administration. The cost of facilities. The extortion racket that are mandatory latest editions textbooks.
Universities are becoming less about teaching people and more about capturing grants and "selling the experience"
Some states are making efforts to curb the costs of textbooks and materials. I'm currently working on software to help CA schools roll out their ZTC programs.[1]
1 - https://www.insidehighered.com/digital-learning/article/2019...
And your comment is an example of assuming that government regulation is at best a necessary evil and something to be avoided if at all possible. Most of western Europe has has regulated university fees for decades, and by all accounts this works pretty well. Public opinion in the UK (even from a lot of the political right) is that the current 9k/year cap is too high if anything.
The role of government regulation is a separate question, but we're really jumping the shark when we can't even acknowledge basic cause and effect.
It's not surprising that government policy making tons of student loan money available led to more students being willing to take out bigger loans. This is like Markets 101.
It's tough to take opponents seriously when basic, predictable side effects of favored policies are ignored just to recommend heavier-handed policies of the same kind.
Totally agree with you on this.
> It's tough to take opponents seriously when basic, predictable side effects of favored policies are ignored just to recommend heavier-handed policies of the same kind.
It seems likely to me that the side effect wasn't ignored. Probably there was somebody proposing the "heavy handed" version of the legislation (which actually makes sense because it mitigates the side effect), but somebody else was opposing it because they don't like regulation. Thus, this problematic legislation emerged as a compromise.
Opposition to regulation often seems to be based on the idea that in practice regulation causes more problems than it solves. My observation is that regulation (esp. in the US) often does have this problem, but only because there is such opposition to regulation that it is almost impossible to enact the stronger and more sensible regulation that would actually work.
In short, it is often ideological opposition to regulation that causes it to fail, rather than the case that regulation in general doesn't work.
In what world do the regulated parties not oppose being regulated? If there’s no opposition to a regulation then it probably isn’t needed.
Perhaps it's just that corporate interests have captured governments. But that too seems like a symptom of distrust in government leading to it being hamstrung and underfunded. I guess it's circular.
I'm 100% in on getting the government out of the lending business and back into the "higher ed is a public good" business. I'd rather they just return the actual sticker price to what it was a generation ago, and make it realistic for people to work student jobs to earn the cost of their tuition.
We might not have the most tenured professors though, since those a drawn to centralize in institution with high prestige. But with the free flow of information today, this centralization of excellence becomes less important.
But anyway it probably isn't a problem with too much/too few government intervention and more of a problem of intervention being constructive or not. Bad intervention is probably worse than no intervention, I agree.
It's not surprising that by making a ton of student loan money available, that more students are more willing to spend more money, and thus prices rise.
There is no free market here.
Even without novel approaches students already get non-subsidized lines of credit so I don’t think it’s unheard of
https://en.m.wikipedia.org/wiki/Paradox_of_the_Court
On another note the idea rubs me as immoral in ways that loans don't for reasons I am not quite able to articulate. Like viscerally seeming too far too similar to indenteture.
I found a link but couldn't add it to my original comment. There is a 5% salary payment for 15 years once the student reaches $25k. Sandbagging is possible but it seems like students would start working against their own monetary self-interest pretty early (from a salary perspective at least; who knows, I'm sure there's other creative ways to game the system).
So if you have a huge loan but a small income, it's more like a 30-year graduate tax than a loan you expect to fully repay.
In the situation above, it acts more like an investment rather than a loan. (i.e., there's no upper bound on the payment, outside of the 5%/15 year cap, so the student may pay back more than they receive)
https://nationswell.com/venture-capital-college-student-debt...
Sort of like those radio ads that say they'll help you "not pay the greedy credit card companies that trapped you".
That's entirely the point. Tuition would have to come down so it's actually affordable, or there would be less people attending. Businesses might actually foot the bill for tuition to train their people, because there would be a shortage of qualified applicants.
Make no mistake, we regulated ourselves into this mess. Many people at the time predicted the current situation. More money chasing something drives up the price of that something. It's now pretty clear that we should have funded the schools instead of providing subsidized loans for the students.