Citation please !
If you wanted to solve the education cost spiral, the Feds need merely begin reducing the guaranteed funds, stop guaranteeing loans, or strictly lock down the guaranteed loan sums. Colleges would be forced to adjust to that new reality, in which they don't get perpetually increasing tuitions.
And if you want to check the concept, look up how much of a college education is subsidized by government loans today, versus 30 or 40 years ago - personally I think the general answer is obvious.
> "And if you want to check the concept, look up how much of a college education is subsidized by government loans today, versus 30 or 40 years ago"
Graph the price of gold vs. number of sea pirates in the world and you'll also get a correlation. The explosion of loans is highly correlated with rising tuition - the citation part needed is the causal link.
I think that anytime the Feds provide blanket guarantees for loans that can easily be taken advantage of by tens of millions of people, you tend to get substantial price inflation. Particularly when there are no checks on the loans that connect to the real economy.
If you see a student with $60,000 in debt, thank the glorious free market. A good chunk of that was lent by a private financial institution.
I agree schools only let students get $100,000 into debt because someone will lend the money. However, if the markets for loaning money to students dried up, schools would finally face some price pressures.
But if they had more than (say) $20,000 in debt, that is exactly what they would do.
Therefore, no school would let a student get significantly in debt.
Therefore, the school would have to lower prices.
The fear back in the day was that, without some way of holding students to loans, that the students wouldn't be able to get credit, and college would become a rich person's paradise.
I can understand where they were coming from when they were thinking that, but what we've actually gotten seems a much worse disaster than the one they were trying to avoid.