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This may be stating the obvious although please bear with me: banks, financial institutions, any 'for profit' enterprises et al are in business to make a profit period & full stop.
There is no incentive for such to be "tighter with credit" because that's how they generate profit.
This was/is demonstrated in the 'for profit' prison industry, & when financial institutions became involved in providing 'food stamps'. Here's just one piece describing:
JP Morgan’s Food Stamp Empire How the welfare state became a profit center. By Peter Schweizer.
Time for the disintegration of a few institutions of higher education.
How about... government permanently caps student loans at an absolute dollar amount (letting inflation gradually "decrease" the significance of that amount.
Meanwhile, these private, for-profit colleges have ample time to turn their business into a more short-term, certification-oriented model.
- Students that want value but need a bachelor's degree for their field will funnel into state universities
- Students who feel that they need to attend a private college because they are THE college for XYZ, can still take available fixed (read: LIMITED) amount of federal loans that any other college-bound student can, but the difference will need to be made up in scholarships or work-credit programs. Private student loans should not exist. They're the equivalent of running to mommy when daddy says you've had enough dessert.
More colleges than necessary exist because some students are being flat-out lied to about what's necessary for their field, and about career prospects after college.
Institutions need to CLOSE, the number of rising college freshmen needs to SHRINK, and we need to experience a decade or so of this contraction while employers remove filters from their applicant searches that unnecessarily require candidates to have bachelor's degrees for a $15/hour job.
If you can't make $50k right out of college after spending 4 years deferring income and deferring the gratification it brings, you might as well get a job in a call center full-time for a company that pays tuition assistance so you can take online classes and begin saving money, not accruing debt!
So...there is no evidence of federal student loans causing tuition to increase?
Yes, there is evidence.
Higher Demand causes the price of tuition to increase.
You need to review the Federal Register. There were changes in the 1990s to the program.
Prior to that, only single (those who could not be claimed as a dependent) and married non-traditional students and students from low-income families financially qualified for guaranteed student loans.
After the changes, anyone and everyone qualified for guaranteed student loans, and that opened up the flood-gates.
On top of that, many universities lowered their admission standards. That allowed more people who wouldn't be allowed to attend university to go.
Those people are not college material, but the universities had an answer for that, which was "0" level courses, basically remedial high school math, science and English. That necessitates the hiring of more professors, and more support staff, and more IT services and more administration, and even more classrooms for instruction and administration, so universities went on building sprees.
You can reduce tuition costs simply by having the government force universities to raise their admission standards, and you can do that by simply refusing all federal financial aid to universities that don't.
Once you eliminate the garbage, you eliminate the need for remedial high school math, science and English classes, and you eliminate the professors that teach those classes, and all of the support staff and administration, and free up space to be used for other purposes.
And, if you went back to requiring demonstrated financial need, instead of handing out loans to anyone, you'd also have fewer students.
Quote:
Originally Posted by lvmensch
Because the cost of tuition was reasonably stable in the decades before the federal loans.
That's because you didn't have technology.
In 2016, the University of Cincinnati spent $116 Million on IT Services. The University of Washington spent $156 Million by comparison.
You didn't have IT Services in the 1980s, so universities spent $0.
Annual tuition at UC is $9,800 and with an enrollment of 25,000 that means $4,640 of the $9,800 goes to IT Services. The enrollment at UW is higher at about 35,000, but I don't know their annual tuition rate.
The point is that 33% to 66% of tuition is for IT Services that never existed in the past.
Quote:
Originally Posted by lvmensch
I think you will find vast resistance to changing the BK code. Much of bankruptcy is busdiness related and they do not want a "pending forever" solution.
Not really.
Chapter 7 and Chapter 13 are for business and individuals.
Chapter 11 is for business only, but thanks to technology, it would be possible to extend Chapter 11 to individuals. I'm all for it. Turn their assets over to a trustee and allow to the trustee to manage their finances.
Chapter 9 is only for municipalities.
Chapter 12 is for farms and fisheries.
Chapter 15 is for foreign debtors.
In general, federal debt of any kind cannot be discharged, and neither can certain other types of debt, like alimony or child support, any debt acquired through fraud, and any debt incurred through malicious acts, such as court ordered judgment in civil court stemming from deaths or injuries in a drunk-driving accident.
Higher Demand causes the price of tuition to increase.
You need to review the Federal Register. There were changes in the 1990s to the program.
Prior to that, only single (those who could not be claimed as a dependent) and married non-traditional students and students from low-income families financially qualified for guaranteed student loans.
After the changes, anyone and everyone qualified for guaranteed student loans, and that opened up the flood-gates.
On top of that, many universities lowered their admission standards. That allowed more people who wouldn't be allowed to attend university to go.
Those people are not college material, but the universities had an answer for that, which was "0" level courses, basically remedial high school math, science and English. That necessitates the hiring of more professors, and more support staff, and more IT services and more administration, and even more classrooms for instruction and administration, so universities went on building sprees.
You can reduce tuition costs simply by having the government force universities to raise their admission standards, and you can do that by simply refusing all federal financial aid to universities that don't.
Once you eliminate the garbage, you eliminate the need for remedial high school math, science and English classes, and you eliminate the professors that teach those classes, and all of the support staff and administration, and free up space to be used for other purposes.
And, if you went back to requiring demonstrated financial need, instead of handing out loans to anyone, you'd also have fewer students.
That's because you didn't have technology.
In 2016, the University of Cincinnati spent $116 Million on IT Services. The University of Washington spent $156 Million by comparison.
You didn't have IT Services in the 1980s, so universities spent $0.
Annual tuition at UC is $9,800 and with an enrollment of 25,000 that means $4,640 of the $9,800 goes to IT Services. The enrollment at UW is higher at about 35,000, but I don't know their annual tuition rate.
The point is that 33% to 66% of tuition is for IT Services that never existed in the past.
Not really.
Chapter 7 and Chapter 13 are for business and individuals.
Chapter 11 is for business only, but thanks to technology, it would be possible to extend Chapter 11 to individuals. I'm all for it. Turn their assets over to a trustee and allow to the trustee to manage their finances.
Chapter 9 is only for municipalities.
Chapter 12 is for farms and fisheries.
Chapter 15 is for foreign debtors.
In general, federal debt of any kind cannot be discharged, and neither can certain other types of debt, like alimony or child support, any debt acquired through fraud, and any debt incurred through malicious acts, such as court ordered judgment in civil court stemming from deaths or injuries in a drunk-driving accident.
As I pointed out before the IT thing is nonsense. The U of C annual budget is over a billion dollars so IT is just about 10% of the operating expense. And it may even be profitable. You would have to work out how the IT tasks were done before IT. I doubt you will find it was cheap.
The question raised on BK was changing it to deferral rather than waived. That would go to any chapter though perhaps more so to those that read on the person. You will find it very difficult to change the existing algorithm.
That’s a valid perspective. Parents should not allow or steer away their kids from non-marketable degrees. Of course the child is an adult at that point but it seems that many students themselves are simply not choosing good degree programs.
I agree, but, parental guidance towards a child's future must start before it's time to choose a major. I've worked with a number of parents and students who end this discussion with, "What do you want to be when you grow up?" --- (How should a child who has never really been in the world know?). A sensible parent uses this question to START the discussion about the difference between a career and an avocation ... and how to get there.
It's not nonsense, it's an expense incurred by universities now, that they did not have in the past. That inflates the cost of tuition, just as offering remedial high school English, math and science courses that were never offered in the past inflates the cost of tuition.
Quote:
Originally Posted by lvmensch
The question raised on BK was changing it to deferral rather than waived.
There are other avenues to obtain deferments, other than bankruptcy.
The bottom line is if you cannot afford to go to the school you want to attend, then you need to find a school you can afford.
If that means going to a junior college for two years where the tuition is $159/credit hour, then working and saving money to attend the university you want, that's what you need to do.
It's not nonsense, it's an expense incurred by universities now, that they did not have in the past. That inflates the cost of tuition, just as offering remedial high school English, math and science courses that were never offered in the past inflates the cost of tuition.
Nobody said it wasn't an expense. You just glossed over the fact that the manual paperwork systems colleges used before was an expense. Storage facilities were needed for vast amounts of paperwork. IT is often implemented because it makes administration more efficient.
what kind of lousy parents allows their kid to borrow a six figure sum for a college education. There are much cheaper alternatives.
Some parents are really lazy and uninvolved (continuing the tradition of their own parents) and couldn’t care less about their kids studying history for 6 figures so long as the kid is out the house. Other kids are just stubborn and want to study something easy regardless of what the parent thinks.
I understand that STEMM (science, tech, engineering, math, medical) majors are rigorous so naturally many people will take the easy route, but the problem is they shouldn’t be borrowing all this money to do it.
At the end of the day, something will give eventually. Whether that’s tuition rates, federal loans, silly majors, or folks studying silly majors. This is currently an unsustainable path of mistakes from all corners IMO.
The major you choose, the school you go to, starting pay of career, availability of jobs in the career, ect. Adjust the interest rate due to the risk of the borrower instead of having non dischargeble loans to anyone with a pulse.
Right now, everything is distorted, which results in the suffering of millions and misallocation of resources.
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