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no...everybody that borrowed signed a legal agreement to repay their loans. There will always be a percentage of people who are untrustworthy and irresponsible. Thankfully, they will eventually have to pay it back when the sign up for Social Security.
He's full of it. It's a nice story, complete with appropriate sarcasm about students just want to party, that plays straight to a certain demographic belief system. But it's still a fake story.
The reality is most kids today still work during the summer and often during the school year too. And still have to take out loans. A big part of what they leave out of these discussions is states have systemically reduced funding since the 1980s, transferring a lot of the cost to the students.
What significantly increased the number of college educated Americans was the GI bill. The US recently recovered from the 1930's Great Depression. From 1945 to 1955, government officials were worried about a large number of working age men returning from WII and Korean War active duty with no job prospects. A government paid college education as a way to keep them out of the workforce. The Best Years of Our Lives (1946) is so realistic about this time.
The next development was the large boomer generation (73 million). Many of their WWII fathers attended college on the GI bill and expected their children to follow in their footsteps.
Many of those boomer kids attended college as a way to defer the Vietnam War. College undergraduate and graduate students were automatically awarded draft status 2-S–deferment for postsecondary education–and could not be forced to serve.
It wasn't until late 1970's, the Jimmy Carter years, when the country had high inflation, that college prices rose.
Three factors, besides inflation, happened. First factor was when US factory jobs were shipped overseas after Nixon's opening of China in 1972. Before, a high school educated men/women could get a factory job and work their way up to management. It wasn't the best paying job, but it was enough to live on. Practically overnight, they were gone.
The second factor was immigration. During the 1970's (after the immigration changes of 1965), US immigration focus changed from European immigrants to Latin/South American ones. The new immigrants were poorer and less educated than Western Europeans. They were more likely to be laborers. Whatever low skill labor intensive jobs were left, there were too many workers for low wage jobs.
The third factor was feminism.
Quote:
In the period after World War II, many women had not expected that they would spend as much of their adult lives working as turned out to be the case. By contrast, in the 1970s young women more commonly expected that they would spend a substantial portion of their lives in the labor force, and they prepared for it, increasing their educational attainment and taking courses and college majors that better equipped them for careers as opposed to just jobs.
US government policy changed us from a factory/farming nation into a service economy.
Quote:
During WWII, manufacturing employment rose dramatically, but it began returning to its pre-war pattern after the war ended. Thereafter, manufacturing employment has had a complex history with a peak in the late 1970s and a secular decline thereafter.
Finally, technology. It was easy to be employed as a secretary, administrative assistant, researcher in the 1970/80's. Those jobs are gone with personal computers and the internet.
Unfortunately, a college degree is the ticket into the service economy. College education is more expensive because the number of unqualified students requiring remedial education, Affirmative Action, Title IX, ADA and other mandated expenses.
So Yes, he is right about the government screwing things up, but not right about how. I'm not a free market person, but our government has made a really big mess.
He's full of it. A big part of what they leave out of these discussions is states have systemically reduced funding since the 1980s, transferring a lot of the cost to the students.
That and then the feds taking over lending. With private loans, you have to qualify based on credit. With federal loans, the criteria is lower and there are income-based repayment plans so you can pay very little if you don’t get a high-paying job after graduation.
This is especially problematic at graduate school. I live in Chicagoland and out of curiosity, I looked at the cost of an MBA at Northwestern, and the estimated expense for one year of a two-year program is $107K. If you do the one-year program, your estimated expenses are $141K. The law school is something like $97K for a year, so you’d likely come out of there with $300k in debt if you don’t get a scholarship or do any programs that don’t require extra fees, like studying abroad or a summer program.
And costs of running a college has soared. Colleges in the 50s and 60s were far more bare bones compared to today's colleges. They didn't need to maintain expensive IT infrastructure, hire endless numbers of expensive deans and support staff catering to every niche, nor were the expectations for quality of facilities that great. No rock climbing walls in the gym.
European and Canadian universities do get more state funding but they are also more basic compared to American universities. So it's no surprise why they're much cheaper.
I didn't watch the video because I'm low on data. But yes the government contributed to this. If you compare Dept of Education spending compared to 30 or 40 years ago, a big percentage of their spending that used to be grants, had become loans.
Also tuition went way up. Why? They say it's because there are more students attending. That's like saying menu prices should go up when more people dine out. What happened was the schools expanded, constructed new buildings. A generation of young people took loans to pay for college infrastructure for future students.
But after the lecture halls and dormitories are all built, the tuition never came back down. Why should they charge less when students are willing to pay more? When I went to college, tuition was today's equivalent of a few hundred dollars a semester.
And why are textbooks so expensive these days? Over $100 for a textbook and they keep making new editions so that students don't buy used books. The books are expensive because students are paying so the publishers make a lot of money.
Peter Schiff starts immediately by saying that many people worked their way thru school, just like today. But then he claims that people did not get loans and does not explain why there were no loans. There were no loans because major state/city universities across the USA were free or close to free. Here are three examples: CUNY, mostly free until 1976 NYC financial crisis, University of FL, first tuition mention is in 1969, and The California University system, first added a $150 fee in 1970. State/City colleges and universities used to be free to affordable and a summer job might be able to pay for your college degree. There were many schools were you did not need a loan to attend.
I could not watch after his initial disingenuous claims.
The real problem today is that it used to be near impossible to discharge only Federal college loans. Then the Bankruptcy Abuse Prevention and Consumer Protection Act was passed in Congress stating after October, 2005, bothfederal and private student loans are not dischargeable in bankruptcy. Now private lenders could hand out high interest loans to any students without any risk to repayment. The colleges and universities are in on this and keep raising prices because everybody can get loans to pay for the ridiculous college charges. It is a huge scam on unsuspecting students and their parents.
Meanwhile, states have cut funding to universities, forcing more of the burden onto students.
If the Bankruptcy Abuse Prevention and Consumer Protection Act had not been passed 2005, we would not have the current student loan disaster. No private lender would ever give a loan to a student with maxed out Federal loans.
A big part of what they leave out of these discussions is states have systemically reduced funding since the 1980s, transferring a lot of the cost to the students.
Bingo.
I've specifically looked at Michigan before. Since 2000, the state has reduced higher ed funding by 50% in real dollars, not adjusted for inflation. Tuition has gone up 100% to make up for it.
And we have Amway to blame for it.
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