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Why don't the politicians do something about state university tuition rates?
Many reasons. For starters, some politicians actually work for the universities (at least in Indiana they did/have in the past). Second, some see them as an opportunity for an overpaid middle management or leadership job in the future (our former Governor is now president of Purdue University, a former Lt. Gov. is or was president of our state community college school).
Also, at some point in time, people can't just run to government to solve all their issues. I stayed at home for college, and living in a major metro, many kids who decided to spend an additional $7,000+/year (back in the day) on living on campus (so this was an additional $28K/year just for the "traditional college experience" back in those days). Both tuition and living expenses have went up, which makes things almost twice as bad. In recent years, younger relatives went with the community or on-line college, work full-time, let the employer pay for it route. Those who go away usually have some money banked either from parents or grandparents, but some are still taking max student loans for the "traditional college experience."
You got it exactly backwards. Banks are not driving the tuition prices upwards. Colleges and universities are. Banks are merely a vehicle the government uses to flood the education system with "free" money. Just like the housing market before the crash. Imagine if you are a university president, and every semester you increase tuition by 10% and demand just keeps going up! You increase it by 50% and there is still no shortage of applicants! All fueled by government-backed sub prime student loans. This is what is happening.
Tuition prices will not come down until the government stops underwriting student loans, and it will take this bubble to pop to change this government policy, just like it happened with housing. At the end of the day, the taxpayers will be on the hook to pay out all of these billions of dollars back to the banks, and people like you will be blaming the banks and "financial elites". If it was actually up to the banks and financial elites, the only people who would be getting 200k at 8% would be doctors, lawyers, IT professionals, and petroleum engineers. Just like the only people who could qualify for a mortgage are the people who actually have income to service the monthly payments. The banks don't have to do due diligence when there is a signature of Uncle Sam on the loan contract.
Banking Lobbyists are in cahoots with the government, they love the easy money as well.
Allow the students to discharge the loans through bankruptcy and you'll see the bankers burn down DC.
I'm sure there's plenty of blame to go around, but what seems evident is that this crisis isn't going away any time soon and only seems to be increasing. At what point does it get so acute that the whole system just caves in and requires direct government intervention?
I'm sure there's plenty of blame to go around, but what seems evident is that this crisis isn't going away any time soon and only seems to be increasing. At what point does it get so acute that the whole system just caves in and requires direct government intervention?
The government took over student loans and opened that faucet.
That increased tuition only made for higher loans being taken out.
Look at history. When the government steps in to "help" and subsidizes something the cost of it goes up. And as costs go up the amount of subsidy goes up.
Can't be attributed to inflation because if that were the case we couldn't afford to buy new vehicles without government subsidized loans.
Very easy fix, go back and treat educational loans just like any other. Credit check, show an ability to repay, allow these loans to become part of bankruptcy protection.
Problem solved but what will higher education do with their bloated staff, salaries, and campuses? What about all those sports teams that those outlandish tuition fees supplement (except for those few schools where Football and Basketball actually support themselves)?
To this I would also propose a federal cap on public and community college tuitions, which is common in many countries outside of the US. Private colleges can continue to charge whatever they want (caveat emptor!) but there should be an affordable public option. Public universities should not be charging six figures for an undergraduate degree, and if they are unable to self-regulate in this regard (spoiler: they aren't) then I am in favor of mandating a universal cap with an additional sliding scale fee option for highly qualified low-income students.
High school kids shouldn’t be brainwashed into believing that they all have to go to college.
Students used to be given aptitude tests which were used as a guide for channeling them into likely career paths.
Of course colleges want more students studying hip new majors even though they may be worthless as a career. It’s like government “make work” jobs.
High school kids shouldn’t be brainwashed into believing that they all have to go to college.
Students used to be given aptitude tests which were used as a guide for channeling them into likely career paths.
Of course colleges want more students studying hip new majors even though they may be worthless as a career. It’s like government “make work” jobs.
Again student loans aren't only for college. They cover technical schools, too. They are actually the bigger problem, in that they prey on the poor and the default rate is extremely high for these schools. I saw a show about them where a girl took out tens of thousands in loans for a nursing program in a private tech school, but she never had any clinicals. She graduated but no one would hire her because the school did not have any partnerships for clinicals.
And again, all this bill does is present 4 rules requiring greater transparency for student borrowers, the same ones already in place for credit cards and mortgages.
Most consumers do not have a clue what their credit card contracts say nor their mortgage loans, except what are the minimum payments.
Yes but they have no problem finding out who holds their loan, what the terms are, getting their records of payment, or finding out what their repayment options are. Apparently that is a problem with student loans. Just as before the 2008 housing crisis, when mortgages were bought and sold so fast some people were not even able to find out who now held their mortgage, and now those issues have been resolved via regulation, apparently California’s crisis is such they feel the same is needed. I certainly don’t see any downside to greater transparency.
And regarding the private tech schools, again these prey on the poor and under-educated, using high pressure, commissioned salespeople, who make more money the more they can get a student to borrow, and often mislead or even lie about repayment terms and rates.
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