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The only way tuition decreases is if the government exits the student loan business. If and when private bankers loan based on realistic ability to pay, then tuition might drop. On the other hand, colleges might simply reduce supply. They might focus on high-demand programs like medicine and certain engineering disciplines. This would keep tuition high, regardless.
The problem is far more complicated than most realize.
Students loans are a special case in part because they're one area where society (and a lot of individuals) benefit from loaning money to people who have zero demonstrated ability to pay back a loan.
This blows up in some people's faces, but it also allows people like me, who grew up with very little, to go to school, get a fancy degree, then step out into a higher social and economic class, all because I worked hard. Now my student loans are just a small part of my monthly budget (they're nothing compared to my mortgage, which isn't even that big as mortgages go), and I'll pay everything off with money to spare and with plenty of time to save for retirement. If someone looked at my credit score when I was 18 (hint: I didn't have a credit score at age 18), I would have been forced to go to a lower-tier school, and I might have been shut out of a lot of the opportunities that I took advantage of. I got to where I am today in part because loans allowed me to attend an excellent university, and that got me into a great graduate program, which made me qualified for a career that has me set for life.
A lot of people, especially serious-minded people, take out student loans because they're worth it.
I think the people who take out loans only to party for three years and then drop out of school are punished enough. Since they can't actually discharge their loans in backruptcy, it's not even as if they're really a drain on society. They pay their debts, eventually. Most of them have debts that cost less than my latest car, which can be a strain on someone aged 25 but probably not as much on someone aged 35 (I don't drive a luxury car or a sports car!).
Student loans got nationalized if you recall.
And why did Obama nationalize them ?
What was a small private guaranteed student loan program has turned into a bloated disaster in the making. Yet another "everyone gets free money" proposal by our FedGov.
Sure that "mass forgiveness" is just your tax dollars flushed down the toilet.
Link to the "mass forgiveness" you are speaking about please. I don't recall any of my friends getting it.
I thought student loans (Stafford Loan)was always available. What did the Obama administration do? Did they increase the borrowing limit?
Yes, I'd like to see some people back up their claims with FACTS and sourcing. This is a topic that has a whole lot of rumor and false information flying around it.
I don't assume that, and I hope that does not happened. How unfair would that be for those who borrowed tons of student loans 10, 20, or 30 years ago and have been working very hard and been very frugal, and have been paying off most of their loans already.
If one made bad choices, spent the money, one should be responsible for paying for it. Period!
What do it mean when the student loan bubble burst? What are the aftermath when it happens.
If you have to ask "What do it mean?" you shouldn't be posting.
I thought student loans (Stafford Loan)was always available. What did the Obama administration do? Did they increase the borrowing limit?
The Legislation that Funded Obamacare Nationalized Student Loans to fund ObamaCare.
They use the interest on the Loans for funding. Amazing that Low-information Students have no clue about how this all happened and that THEY supported it. They are Gruber'd.
What are the likely scenarios after the student loan bubble?
1) College Tuition Decreases
2)
3)
2) college towns decline like the rust belt
3) college degrees loose most of their value
It will happen someday. But probably not soon.. A possible example of what may happen is what is happening in public school. Many Parents won't send their kids to pub school because they believe the education (outcome) is subpar. And so now we've got two school systems, a private elite and a public underclass.
Over time as degrees commoditize, some kind of differentiation will emerge. I wouldn't be surprised to see overseas schools become magnets for American students in a reversal of what goes on today.
Applicant A: I am a straight A student going for a Bachelors into Master program for Feminist Lit of the 18th Century.
Applicant B: I am a straight B- student going to school for mechanical engineering.
Applicant A will be accepted and need to furnish the money or get a scholarship.
Applicant B will be accepted and get student loans.
Schools and/or loan officers will take the wages for the perspective student at completion of their academic career into account before dispensing funds.
Applicant A: I am a straight A student going for a Bachelors into Master program for Feminist Lit of the 18th Century.
Applicant B: I am a straight B- student going to school for mechanical engineering.
Applicant A will be accepted and need to furnish the money or get a scholarship.
Applicant B will be accepted and get student loans.
Schools and/or loan officers will take the wages for the perspective student at completion of their academic career into account before dispensing funds.
Applicant A will then make a fine barista serving coffee from an espresso machine designed by Applicant B..
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