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To the people who are against this idea, put it this way. Would you let people with bad credit and a low paying job qualify for a subprime mortgage? That's effectively how the student loan racket works. They are subprime loans made out to so many kids who major in useless degrees and graduate with tens of thousands of dollars in debt and are unable to pay it back. We already had the housing loan bubble pop, should we continue to inflate the student loan bubble too? What incentive do universities have to stop raising their tuition so ridiculously high every year? None, whatsoever. Besides, this whole let's get everyone to college mantra will make college degrees as useless as high school diplomas. The more college graduates you have the more the market becomes saturated with them, the more wages and salaries are lowered for white collar jobs.
.... only in some countries, education is free to anyone who wants it, and they have higher wages and better standard of living (not to mention, a better educated populace less susceptible to extremist right wing propaganda).
In some countries, vocational training is also provided as a service to the citizenry (i.e., Germany). Germany out-exports and out-manufactures the United States, and is world renown for its engineering.
But hey, we all know many conservative power brokers are OK with a McDonalds and Wal-Mart based economy in the United States.
To the people who are against this idea, put it this way. Would you let people with bad credit and a low paying job qualify for a subprime mortgage? That's effectively how the student loan racket works. They are subprime loans made out to so many kids who major in useless degrees and graduate with tens of thousands of dollars in debt and are unable to pay it back. We already had the housing loan bubble pop, should we continue to inflate the student loan bubble too? What incentive do universities have to stop raising their tuition so ridiculously high every year? None, whatsoever. Besides, this whole let's get everyone to college mantra will make college degrees as useless as high school diplomas. The more college graduates you have the more the market becomes saturated with them, the more wages and salaries are lowered for white collar jobs.
I disagree with this statement. Rising tuition does not necessarily mean that federal student loan caps have increased proportionately. I believe aggressive loan caps are the way to make sure that taxpayer liability and exposure is minimized. Put a greater emphasis on private loan offerings from a bank and I believe more students will find that it's less appealing to borrow. This would likely change students' attitudes toward future debt. Drastically cutting access to low cost capital may force students to perform a little more due diligence in sorting out their financial future.
Paul is right. Why is the federal government in the student loan business?
to promote a more educated citizenry.
i can't make my mind up about this issue. it is extremely important to provide americans with access to education, on the taxpayer dime. Because we are a "lab of democracy" it makes sense to let the states handle it, on one hand, but then on the other hand the federal government has a far greater ability (and willingness) to spend.
i do think that student loans just drive up the cost of tuition, since rates are determined in some sort of market competition. this has led to an arms race for administrators and professors. Some of these university employees are getting rich off the current system.
I think this is a bad idea. Although I do understand that easy access to loans is partly responsible for exploding tuition rates, I think its irresponsible to effectively end any chance of going to college for those who come from middle class families. These days, middle class often means paying the bills without much extra to save for college. Why should that preclude a person from going to college?
We don't live in an agriculture/manufacturing based society anymore. People can't just "get a job" since they can't afford college. Perhaps a sliding scale could be implemented based on the major the person pursues. Art History, not much. Engineering, as much as is needed. Or something along those lines. But killing the program altogether just sounds stupid to me.
Well the article and the OP were somewhat disingenuous. Paul's statement comes from his "Meet the Press" interview yesterday. In the actual interview he didn't want to just cut the program tomorrow and cutting it is not in his economic plan. He simply thinks that it should be phased out over a period of time.
I understand the point of the government providing loans...and educated population is an essential thing. That being said, not every degree is created equally. Those pursuing degrees that are in higher demand should have lower interest rates. Someone in pre-med with a 3.95 GPA at a top ranked school should pay 3% interest, while an art history major with a 2.5 GPA should pay 15%.
If the government is going to provide loans, they need to manage the risk.
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