Ron Paul and the Federal student loan

fife

I understand that there are a lot of Ron Paul supporters here and i had a questions. i was watching him on CNN and he was talking about the federal student loan and was saying how that should be eliminated. Paul said that he believes that if we do cut these loans education will be cheaper.

how first is that possible? and secondly, would cutting the federal student loan program not create a bigger gap between the rich and the poor in the US?

thanks

VINNY GOOMBA

Federal student loans and federal guarantees of private loans are what have driven education costs up. Just like anywhere else, when there is a large injection of money into a certain part of the economy by the government keeping interest lates artificially low, the people in that industry charge more and begin to take advantage of it, driving prices up. Since all of the loans are guaranteed by the government, and since these loans are structured in such a way that neither bankruptcy nor death wipes this debt away, there is a moral hazard on the part of the banks to make more loans with cheap money for these purposes. While the loans are available to more and more people maybe allowing more people to attend school, they are attending school at the cost of coming out with tremendous debt attached to it. Meanwhile, the bursting of the rest of the bubble economy has made it so that there are fewer jobs than ever for graduating students, giving them huge debt with no way to pay for it.

Years ago, people could work a few part time jobs and pay off school in a few years. While less people may have gone to college, it was more affordable for those that really wanted to attend and make the most of it.

For a better explanation of it all, I recommend this documentary:
http://www.youtube.com/watch?v=VpZtX32sKVE

It should also be mentioned that Paul, as president doesn't plan on getting rid of Student Loans on day one of his presidency, but it would be a longer term goal.

VINNY GOOMBA

fife wrote:

how first is that possible? and secondly, would cutting the federal student loan program not create a bigger gap between the rich and the poor in the US?

thanks

I see the gap increasing when a bailed out banker has a couple of dozen million in his bank account while Jane Schmoe fresh out of Private U has a degree in Education and a net worth of -$125,000.

mikepegg44

fife wrote:

I understand that there are a lot of Ron Paul supporters here and i had a questions. i was watching him on CNN and he was talking about the federal student loan and was saying how that should be eliminated. Paul said that he believes that if we do cut these loans education will be cheaper.

how first is that possible? and secondly, would cutting the federal student loan program not create a bigger gap between the rich and the poor in the US?

thanks

Vinny usually answers about as correctly as possible, so whenever in doubt about a Ron Paul point, simply look to him. and I certainly don't have a whole lot to add but it has never stopped me before

could a university charge 25,000 a year to go there if no one could pay for it? Supply and demand does not really apply to universities unfortunately...and the people who are borrowing all this money are the ones who pay the price in the end.
subsidizing. That is basically what it is. It is as much of a poor tax as anything else...in fact, if more people worked their way through college rather than borrowing, they would be better off when they graduated than someone who simply takes loans...
The similarities in the housing market and the bubbling student loan market are pretty crazy...the degree is worth less every day, and the costs keep rising...basically it is like being underwater on a house...most people are underwater on their student loans...


around 2:40 in this video is where the discussion starts for those who haven't seen/read about it
http://www.ronpaul.com/2011-10-30/ron-p ... -else-too/

do you not agree with Paul? if not, why not?

fife

VINNY GOOMBA wrote:

Federal student loans and federal guarantees of private loans are what have driven education costs up. Just like anywhere else, when there is a large injection of money into a certain part of the economy by the government keeping interest lates artificially low, the people in that industry charge more and begin to take advantage of it, driving prices up. Since all of the loans are guaranteed by the government, and since these loans are structured in such a way that neither bankruptcy nor death wipes this debt away, there is a moral hazard on the part of the banks to make more loans with cheap money for these purposes. While the loans are available to more and more people maybe allowing more people to attend school, they are attending school at the cost of coming out with tremendous debt attached to it. Meanwhile, the bursting of the rest of the bubble economy has made it so that there are fewer jobs than ever for graduating students, giving them huge debt with no way to pay for it.

Years ago, people could work a few part time jobs and pay off school in a few years. While less people may have gone to college, it was more affordable for those that really wanted to attend and make the most of it.

For a better explanation of it all, I recommend this documentary:
http://www.youtube.com/watch?v=VpZtX32sKVE

It should also be mentioned that Paul, as president doesn't plan on getting rid of Student Loans on day one of his presidency, but it would be a longer term goal.

Thanks. sorry just about the last question i asked. do you believe that people from low income families will actually benefit from cutting of federal funding?

The reason i asked is that i have a feeling that without the backing of the federal government many banks will deny students from low income thus making it harder for them to get an education which would increase the gap of rich and poor.

and yes you are right Ron Paul would not cut this out on day one.

VINNY GOOMBA

fife wrote:

VINNY GOOMBA wrote:

Federal student loans and federal guarantees of private loans are what have driven education costs up. Just like anywhere else, when there is a large injection of money into a certain part of the economy by the government keeping interest lates artificially low, the people in that industry charge more and begin to take advantage of it, driving prices up. Since all of the loans are guaranteed by the government, and since these loans are structured in such a way that neither bankruptcy nor death wipes this debt away, there is a moral hazard on the part of the banks to make more loans with cheap money for these purposes. While the loans are available to more and more people maybe allowing more people to attend school, they are attending school at the cost of coming out with tremendous debt attached to it. Meanwhile, the bursting of the rest of the bubble economy has made it so that there are fewer jobs than ever for graduating students, giving them huge debt with no way to pay for it.

Years ago, people could work a few part time jobs and pay off school in a few years. While less people may have gone to college, it was more affordable for those that really wanted to attend and make the most of it.

For a better explanation of it all, I recommend this documentary:
http://www.youtube.com/watch?v=VpZtX32sKVE

It should also be mentioned that Paul, as president doesn't plan on getting rid of Student Loans on day one of his presidency, but it would be a longer term goal.

Thanks. sorry just about the last question i asked. do you believe that people from low income families will actually benefit from cutting of federal funding?

The reason i asked is that i have a feeling that without the backing of the federal government many banks will deny students from low income thus making it harder for them to get an education which would increase the gap of rich and poor.

and yes you are right Ron Paul would not cut this out on day one.

Currently, it is almost impossible for anyone to go to college without borrowing large sums of money to do it. To me, that sounds like most of the population fits into the "low income" category if they need government assistance to attend school. So yes, I do believe that even the lowest income families would benefit from the aid being removed. Tuition costs WILL come down in the future, as they are going to be forced by market correction to come down. Look at Occupy Wall Street. A lot of them are people who are done with school and are out of work-- eventually, word is going to spread that in this economy, taking on tens to hundreds of thousands of dollars in debt isn't a great idea. Enrollment will plummet, and prices will have to adjust to keep people coming in the doors at the schools. The very idea of "education" is sure to generalize, and as well it should-- be it vocational school, internet courses, on the job training, cheaper and better alternatives are already being sought as means to replace a system that costs way too much for the amount of "real world" training it actually provides. As technology improves allowing for more people to be educated simultaneously while using less resources, prices should be destined to come down, unless of course we keep deciding to prop up a failing system.

As with anything else, choices and competition should be made as fully possible so more people will be able to take advantage of a system that seeks to provide the best product at the lowest prices. People need to broaden their definition of education, and not have it be exclusively rigorously institutionalized by grammar schools and colleges. It's a life long process. As time goes on, I think more people are going to cater to hiring people who employ this idea rather than someone who has a degree that *may* prove they are educated. I am not calling college useless, but I do believe that it can be a very overblown concept (depending the sought-after profession), and making it move available by making it more expensive for EVERYONE by printing money and devaluing the currency is not the correct approach.

This rant was brought to you buy an independent study of Austrian Economics

Go Beavers

I don't think student loans are driving tuition up. It has more to do with reduced funding from the government.

And, like fife mentioned, it would be another domestic policy of Ron Paul's that creates a wider gap between rich states and poor states. What's his reasoning to get rid of federal student loans anyway?

mikepegg44

Go Beavers wrote:

I don't think student loans are driving tuition up. It has more to do with reduced funding from the government.

And, like fife mentioned, it would be another domestic policy of Ron Paul's that creates a wider gap between rich states and poor states. What's his reasoning to get rid of federal student loans anyway?

the reduced funding from the government coupled with ever increasing amount of student loans being offered is allowing colleges to drive up tuition.
Read Vinny's post above, spells it out pretty well.

I think people who want to go to college will continue to go, those who don't won't get 10000 dollars in debt before they decide they shouldn't be in school and should try a trade....don't you think it would be better to leave school with no loans and have it take longer than leave school with a crap load of loans and not be able to find work?
College is simply a business, and if competition is taken out as a factor, all universities can continue to drive up tuition while education actually will be getting worse...It may not be perfect, but it will be better than the system we currently have

fife

VINNY GOOMBA wrote:

fife wrote:

VINNY GOOMBA wrote:

Federal student loans and federal guarantees of private loans are what have driven education costs up. Just like anywhere else, when there is a large injection of money into a certain part of the economy by the government keeping interest lates artificially low, the people in that industry charge more and begin to take advantage of it, driving prices up. Since all of the loans are guaranteed by the government, and since these loans are structured in such a way that neither bankruptcy nor death wipes this debt away, there is a moral hazard on the part of the banks to make more loans with cheap money for these purposes. While the loans are available to more and more people maybe allowing more people to attend school, they are attending school at the cost of coming out with tremendous debt attached to it. Meanwhile, the bursting of the rest of the bubble economy has made it so that there are fewer jobs than ever for graduating students, giving them huge debt with no way to pay for it.

Years ago, people could work a few part time jobs and pay off school in a few years. While less people may have gone to college, it was more affordable for those that really wanted to attend and make the most of it.

For a better explanation of it all, I recommend this documentary:
http://www.youtube.com/watch?v=VpZtX32sKVE

It should also be mentioned that Paul, as president doesn't plan on getting rid of Student Loans on day one of his presidency, but it would be a longer term goal.

Thanks. sorry just about the last question i asked. do you believe that people from low income families will actually benefit from cutting of federal funding?

The reason i asked is that i have a feeling that without the backing of the federal government many banks will deny students from low income thus making it harder for them to get an education which would increase the gap of rich and poor.

and yes you are right Ron Paul would not cut this out on day one.

Currently, it is almost impossible for anyone to go to college without borrowing large sums of money to do it. To me, that sounds like most of the population fits into the "low income" category if they need government assistance to attend school. So yes, I do believe that even the lowest income families would benefit from the aid being removed. Tuition costs WILL come down in the future, as they are going to be forced by market correction to come down. Look at Occupy Wall Street. A lot of them are people who are done with school and are out of work-- eventually, word is going to spread that in this economy, taking on tens to hundreds of thousands of dollars in debt isn't a great idea. Enrollment will plummet, and prices will have to adjust to keep people coming in the doors at the schools. The very idea of "education" is sure to generalize, and as well it should-- be it vocational school, internet courses, on the job training, cheaper and better alternatives are already being sought as means to replace a system that costs way too much for the amount of "real world" training it actually provides. As technology improves allowing for more people to be educated simultaneously while using less resources, prices should be destined to come down, unless of course we keep deciding to prop up a failing system.

As with anything else, choices and competition should be made as fully possible so more people will be able to take advantage of a system that seeks to provide the best product at the lowest prices. People need to broaden their definition of education, and not have it be exclusively rigorously institutionalized by grammar schools and colleges. It's a life long process. As time goes on, I think more people are going to cater to hiring people who employ this idea rather than someone who has a degree that *may* prove they are educated. I am not calling college useless, but I do believe that it can be a very overblown concept (depending the sought-after profession), and making it move available by making it more expensive for EVERYONE by printing money and devaluing the currency is not the correct approach.

This rant was brought to you buy an independent study of Austrian Economics

concerning the part i bolded, yes many people have to borrow money to go to school but i think you know that there is a difference between middle class and lower class. for example, my uncle help pay for his children to go to school and he had to put his house as the bank asked for assurance as his credit was not that great. many poor people don't have that options and hence may not be able to go to school. i personally don't believe that education will get cheaper cause i don't see a time in which many jobs are not going to want someone with a university degree.

VINNY GOOMBA

fife wrote:

VINNY GOOMBA wrote:

fife wrote:

concerning the part i bolded, yes many people have to borrow money to go to school but i think you know that there is a difference between middle class and lower class. for example, my uncle help pay for his children to go to school and he had to put his house as the bank asked for assurance as his credit was not that great. many poor people don't have that options and hence may not be able to go to school. i personally don't believe that education will get cheaper cause i don't see a time in which many jobs are not going to want someone with a university degree.

Sure there is a difference between middle income and low income families-- but in certain categories, there is less of a difference than ever before, college being one of them. If someone from a middle income family is borrowing 100% of their college education to go to university A (and many people are), and a lower income family is doing the same, they both owe the same amount when they come out. Both are poor at this point. These loans do NOT go away. They are absolutely win-win for the banks that are making them, so they will continue to make them, with little to no risk involved (except for a currency collapse). Colleges will continue to take advantage of this and continue to charge more unless their is a great realization that there are no jobs to be had, degree or not. In this case, less people will go to college, and tuitions will have to adjust. It really all depends on how much you believe in a degree being as important to employers in the future. I personally believe it will remain important to some professions, especially those that require a degree for licensure (accountants, architects, engineers, doctors), and far less important for others.

mikepegg44

fife wrote:

concerning the part i bolded, yes many people have to borrow money to go to school but i think you know that there is a difference between middle class and lower class. for example, my uncle help pay for his children to go to school and he had to put his house as the bank asked for assurance as his credit was not that great. many poor people don't have that options and hence may not be able to go to school. i personally don't believe that education will get cheaper cause i don't see a time in which many jobs are not going to want someone with a university degree.

could a university charge 15000 a semester if no one could pay for it. or if they would lose half of their students because of it...do you think to make up the difference of lost students they would just charge more? They charge what they charge now not solely because of easily accessible student loans, but that plays a huge part in it...There will always be expensive schools, but college is now just like homes were 3 or four years ago...too expensive for everyone, and not worth nearly what people are paying...that is a bubble and it will burst...it has already started.

Bronx Bombers

If you want to reduce education costs you need to eliminate teachers pensions and health care benefits for retirees which is the main reason they've gone up so much.

Jason P

Bronx Bombers wrote:

If you want to reduce education costs you need to eliminate teachers pensions and health care benefits for retirees which is the main reason they've gone up so much.

I don't think that alone accounts for a 100% increase in tuition over the last ten years.

It makes sense that if kids can get the loans and universities are at full capacity and turning people away, why not increase the price? Supply and demand. If loans get a "cap", that changes the game completely. As it stands now, I think we will see a paradigm shift towards online schools over the next several decades.

Go Beavers

mikepegg44 wrote:

Go Beavers wrote:

I don't think student loans are driving tuition up. It has more to do with reduced funding from the government.

And, like fife mentioned, it would be another domestic policy of Ron Paul's that creates a wider gap between rich states and poor states. What's his reasoning to get rid of federal student loans anyway?

the reduced funding from the government coupled with ever increasing amount of student loans being offered is allowing colleges to drive up tuition.
Read Vinny's post above, spells it out pretty well.

Vinny's post outlines an unproven hypothesis: "Federal student loans and federal guarantees of private loans are what have driven education costs up."

That just spells out his opinion.

mikepegg44

Go Beavers wrote:

mikepegg44 wrote:

Go Beavers wrote:

I don't think student loans are driving tuition up. It has more to do with reduced funding from the government.

And, like fife mentioned, it would be another domestic policy of Ron Paul's that creates a wider gap between rich states and poor states. What's his reasoning to get rid of federal student loans anyway?

the reduced funding from the government coupled with ever increasing amount of student loans being offered is allowing colleges to drive up tuition.
Read Vinny's post above, spells it out pretty well.

Vinny's post outlines an unproven hypothesis: "Federal student loans and federal guarantees of private loans are what have driven education costs up."

That just spells out his opinion.

it is the same unproven hypothesis that called the housing bubble as well.

Students are underwater. Huge amounts of debt when you get out of school are good for no one except the people who own the loans. If we see the same growth in costs for the next 30 years, that we saw the last 30, adjusted for inflation, tuition at a 4 year institution will cost (through quick rudimentary math) 96000... and that is in today's dollars. I realize that things can change and trends won't continue at that rate...but I am sure people thought the same thing 30 years ago...it is a terrifying prospect to think that tuition may even go up 100 percent in 30 years and that is not even close to what happened during the last 30
numbers from here:
http://nces.ed.gov/fastfacts/display.asp?id=76

so you may call it unproven, what I call it is government backed loans that allow tuition costs to rise through guaranteed money.

we can either try to get out from under the bubble and possible harm a few, or we can stay in the bubble, let it burst, and harm everyone

Go Beavers

it is the same unproven hypothesis that called the housing bubble as well.

Students are underwater. Huge amounts of debt when you get out of school are good for no one except the people who own the loans. If we see the same growth in costs for the next 30 years, that we saw the last 30, adjusted for inflation, tuition at a 4 year institution will cost (through quick rudimentary math) 96000... and that is in today's dollars. I realize that things can change and trends won't continue at that rate...but I am sure people thought the same thing 30 years ago...it is a terrifying prospect to think that tuition may even go up 100 percent in 30 years and that is not even close to what happened during the last 30
numbers from here:
http://nces.ed.gov/fastfacts/display.asp?id=76

so you may call it unproven, what I call it is government backed loans that allow tuition costs to rise through guaranteed money.

we can either try to get out from under the bubble and possible harm a few, or we can stay in the bubble, let it burst, and harm everyone

[/quote]



I see your point comparing the housing bubble to the student loan issue, but they are two different things. Housing was going up but essentially there wasn't anything to support it because basically the real estate market is a racket. Tuition costs are going up due to different factors, one includes improvement in facilities, staying on top of the latest in research, and maintaining competitive salaries. I can sell my house for double what I paid for it and the only thing done to it is 10 years of wear and tear and that I kept the grass from dying.

mikepegg44

Go Beavers wrote:

it is the same unproven hypothesis that called the housing bubble as well.

Students are underwater. Huge amounts of debt when you get out of school are good for no one except the people who own the loans. If we see the same growth in costs for the next 30 years, that we saw the last 30, adjusted for inflation, tuition at a 4 year institution will cost (through quick rudimentary math) 96000... and that is in today's dollars. I realize that things can change and trends won't continue at that rate...but I am sure people thought the same thing 30 years ago...it is a terrifying prospect to think that tuition may even go up 100 percent in 30 years and that is not even close to what happened during the last 30
numbers from here:
http://nces.ed.gov/fastfacts/display.asp?id=76

so you may call it unproven, what I call it is government backed loans that allow tuition costs to rise through guaranteed money.

we can either try to get out from under the bubble and possible harm a few, or we can stay in the bubble, let it burst, and harm everyone

I see your point comparing the housing bubble to the student loan issue, but they are two different things. Housing was going up but essentially there wasn't anything to support it because basically the real estate market is a racket. Tuition costs are going up due to different factors, one includes improvement in facilities, staying on top of the latest in research, and maintaining competitive salaries. I can sell my house for double what I paid for it and the only thing done to it is 10 years of wear and tear and that I kept the grass from dying.[/quote]


the reason prices were inflated was the expansion of easily gotten credit due to government backed loans, the reason it burst was different...but without the inflation of a bubble you don't have the problems caused when it bursts...

If no one could pay it, and the money wasn't guaranteed to come to them through financial aid you would not see a giant rise in tuition. Class rooms might be a little older, and more schools may turn to online learning but they will certainly have to change the current delivery model...either way that will have to change...they now offer more classes online...
Do you think the system can support the constant rise in tuition? How long before a degree isn't worth the money paid for it?

Jason P

Go Beavers wrote:

I see your point comparing the housing bubble to the student loan issue, but they are two different things. Housing was going up but essentially there wasn't anything to support it because basically the real estate market is a racket. Tuition costs are going up due to different factors, one includes improvement in facilities, staying on top of the latest in research, and maintaining competitive salaries. I can sell my house for double what I paid for it and the only thing done to it is 10 years of wear and tear and that I kept the grass from dying.

I agree that all those factors are behind rising tuition costs. I don't think universities are intentionally trying to bilk the system. But if there wasn't a system that allowed loans to increase at the same rate, would those same universities have built up so dramatically in the last 20 years? I think not.

edit:

You should consider yourself very, very fortunate if you can sell your house for double today.

Hail, hail, the lucky ones.

MookiesLaw

Anyone familiar with Tom Woods book "Rollback" will remember an excerpt from there that amplifies Pauls views and some other views being discussed in this thread.

**
Of course, it is the subsidies themselves that push tuition costs ever higher. Here’s the obvious point everyone pretends not to realize: colleges know the students have access to low-interest loans courtesy of government. Aware that prospective students enjoy artificially increased purchasing power, college administrations raise tuition (and cut back their own aid programs) accordingly. When tuition thus continues to rise, as any fool could predict, we hear huzzahs for the government – for however could students pay this high tuition without government assistance? It is the classic case, as Harry Browne said, of the government breaking your leg, handing you a crutch, and saying, “See? Without me you couldn’t walk.”

This, by the way, is how the government defines affordable. As with housing, government programs artificially increase prices. What makes those inflated prices “affordable,” in the government’s version of things, is that you can get a government-subsidized loan to pay them. Letting prices fall in the first place, so people might be able to pay college tuition or buy a house without enslaving themselves to debt for the rest of their lives, is not even on the table. (Incidentally, Fannie Mae, which was created in order to foster affordable housing, makes loans in excess of $938,000. Hooray for “affordable housing” programs!)
**

http://www.amazon.com/gp/product/159698 ... 1596981415

VINNY GOOMBA

MookiesLaw wrote:

Anyone familiar with Tom Woods book "Rollback" will remember an excerpt from there that amplifies Pauls views and some other views being discussed in this thread.

**
Of course, it is the subsidies themselves that push tuition costs ever higher. Here’s the obvious point everyone pretends not to realize: colleges know the students have access to low-interest loans courtesy of government. Aware that prospective students enjoy artificially increased purchasing power, college administrations raise tuition (and cut back their own aid programs) accordingly. When tuition thus continues to rise, as any fool could predict, we hear huzzahs for the government – for however could students pay this high tuition without government assistance? It is the classic case, as Harry Browne said, of the government breaking your leg, handing you a crutch, and saying, “See? Without me you couldn’t walk.”

This, by the way, is how the government defines affordable. As with housing, government programs artificially increase prices. What makes those inflated prices “affordable,” in the government’s version of things, is that you can get a government-subsidized loan to pay them. Letting prices fall in the first place, so people might be able to pay college tuition or buy a house without enslaving themselves to debt for the rest of their lives, is not even on the table. (Incidentally, Fannie Mae, which was created in order to foster affordable housing, makes loans in excess of $938,000. Hooray for “affordable housing” programs!)
**

http://www.amazon.com/gp/product/159698 ... 1596981415

Tom Woods is the man. Academia could use more guys like him.

Sludge Factory

Go Beavers wrote:

it is the same unproven hypothesis that called the housing bubble as well.

Students are underwater. Huge amounts of debt when you get out of school are good for no one except the people who own the loans. If we see the same growth in costs for the next 30 years, that we saw the last 30, adjusted for inflation, tuition at a 4 year institution will cost (through quick rudimentary math) 96000... and that is in today's dollars. I realize that things can change and trends won't continue at that rate...but I am sure people thought the same thing 30 years ago...it is a terrifying prospect to think that tuition may even go up 100 percent in 30 years and that is not even close to what happened during the last 30
numbers from here:
http://nces.ed.gov/fastfacts/display.asp?id=76

so you may call it unproven, what I call it is government backed loans that allow tuition costs to rise through guaranteed money.

we can either try to get out from under the bubble and possible harm a few, or we can stay in the bubble, let it burst, and harm everyone

I see your point comparing the housing bubble to the student loan issue, but they are two different things. Housing was going up but essentially there wasn't anything to support it because basically the real estate market is a racket. Tuition costs are going up due to different factors, one includes improvement in facilities, staying on top of the latest in research, and maintaining competitive salaries. I can sell my house for double what I paid for it and the only thing done to it is 10 years of wear and tear and that I kept the grass from dying.[/quote]

Does being able to sell your house double from what you paid for it take into account the inflation on the dollar that has occurred in those 10 years? I would argue that the true value you would get is not double of what you paid 10 years ago due to the devaluation of the dollar. I think I might be missing your point with this though. Is your point with this statement to just back up your earlier statement on the houseing market being a racket?

Go Beavers

Sludge Factory wrote:

Go Beavers wrote:

it is the same unproven hypothesis that called the housing bubble as well.

Students are underwater. Huge amounts of debt when you get out of school are good for no one except the people who own the loans. If we see the same growth in costs for the next 30 years, that we saw the last 30, adjusted for inflation, tuition at a 4 year institution will cost (through quick rudimentary math) 96000... and that is in today's dollars. I realize that things can change and trends won't continue at that rate...but I am sure people thought the same thing 30 years ago...it is a terrifying prospect to think that tuition may even go up 100 percent in 30 years and that is not even close to what happened during the last 30
numbers from here:
http://nces.ed.gov/fastfacts/display.asp?id=76

so you may call it unproven, what I call it is government backed loans that allow tuition costs to rise through guaranteed money.

we can either try to get out from under the bubble and possible harm a few, or we can stay in the bubble, let it burst, and harm everyone

I see your point comparing the housing bubble to the student loan issue, but they are two different things. Housing was going up but essentially there wasn't anything to support it because basically the real estate market is a racket. Tuition costs are going up due to different factors, one includes improvement in facilities, staying on top of the latest in research, and maintaining competitive salaries. I can sell my house for double what I paid for it and the only thing done to it is 10 years of wear and tear and that I kept the grass from dying.

Does being able to sell your house double from what you paid for it take into account the inflation on the dollar that has occurred in those 10 years? I would argue that the true value you would get is not double of what you paid 10 years ago due to the devaluation of the dollar. I think I might be missing your point with this though. Is your point with this statement to just back up your earlier statement on the houseing market being a racket?[/quote]

That was pretty much my point. The increased value of housing doesn't have anything tangible to support. Education does, and it will always carry value with individuals, society, and employers, etc.

mikepegg44

Go Beavers wrote:

That was pretty much my point. The increased value of housing doesn't have anything tangible to support. Education does, and it will always carry value with individuals, society, and employers, etc.

just like education, the reason it has gone up is the free flow of credit...a government backed program to get people money that probably shouldn't have had it. That easy loan process inflated demand, which increased prices...
The same thing happens with education. You can deny it all you want, but the only reason people can be charged an arm and a leg for a state school now is easy to receive federal loans. Without that guaranteed pot of money increasing every year, people wouldn't support it. If you think the value of a college education is equal to the cost right now, I don't know what to tell you..
you never responded to the numbers I showed earlier. Do you think the system can support in the future what has happened to tuition numbers the past 30 years? do you think that tuition can go up at the same rate...because without a change it will and where will our students be?



What do you mean by "the increased value of housing doesn't have anything tangible to support?"

Go Beavers

mikepegg44 wrote:

Go Beavers wrote:

That was pretty much my point. The increased value of housing doesn't have anything tangible to support. Education does, and it will always carry value with individuals, society, and employers, etc.

just like education, the reason it has gone up is the free flow of credit...a government backed program to get people money that probably shouldn't have had it. That easy loan process inflated demand, which increased prices...
The same thing happens with education. You can deny it all you want, but the only reason people can be charged an arm and a leg for a state school now is easy to receive federal loans. Without that guaranteed pot of money increasing every year, people wouldn't support it. If you think the value of a college education is equal to the cost right now, I don't know what to tell you..
you never responded to the numbers I showed earlier. Do you think the system can support in the future what has happened to tuition numbers the past 30 years? do you think that tuition can go up at the same rate...because without a change it will and where will our students be?



What do you mean by "the increased value of housing doesn't have anything tangible to support?"

I mean that housing values are falsely inflated, and there isn't anything people get in return for what they're paying.

I don't think tuition will increase at the same rate over the next 30 years, and as it's been increasing, you do see the system adjust. I just don't see cutting off access as the way to go about it, and I don't think schools are raising tuition in connection to federal school loans.

mikepegg44

Go Beavers wrote:

mikepegg44 wrote:

Go Beavers wrote:

That was pretty much my point. The increased value of housing doesn't have anything tangible to support. Education does, and it will always carry value with individuals, society, and employers, etc.

just like education, the reason it has gone up is the free flow of credit...a government backed program to get people money that probably shouldn't have had it. That easy loan process inflated demand, which increased prices...
The same thing happens with education. You can deny it all you want, but the only reason people can be charged an arm and a leg for a state school now is easy to receive federal loans. Without that guaranteed pot of money increasing every year, people wouldn't support it. If you think the value of a college education is equal to the cost right now, I don't know what to tell you..
you never responded to the numbers I showed earlier. Do you think the system can support in the future what has happened to tuition numbers the past 30 years? do you think that tuition can go up at the same rate...because without a change it will and where will our students be?



What do you mean by "the increased value of housing doesn't have anything tangible to support?"

I mean that housing values are falsely inflated, and there isn't anything people get in return for what they're paying. they get a house to live in
I don't think tuition will increase at the same rate over the next 30 years, and as it's been increasing, you do see the system adjust. what adjustments are you talking about? I just don't see cutting off access as the way to go about it, and I don't think schools are raising tuition in connection to federal school loans.

****these aren't large above to be a smart ass, but to show they are what I wrote in your quote.

getting rid of stafford loans does not cut off access. that is what is known as demagoguery and the main reason that crappy government programs stick around for far too long...
Working your way through college and universities having to change their delivery model will be better for everyone involved...If the government wants to provide education for people through an undergrad now they should, but the halfway half assed method of handing out subsidized low interest loans is simply a money maker that increases the cost of education for EVERYONE involved. there will come a time where the entire market is saddled with defaults...and I think we are only a few years away from it...

and you are right about the inflated housing prices, they were artificially inflated... but by what? that's right...easily gotten, government backed loans...are you purposely ignoring that fact or is it that you just don't want to see it because of some strange notion that federal loans are the only way to get the poor into college?

also, what is your reasoning behind saying that tuition won't continue to go up at the same rate? just saying it or do you have something to support it?

student loans are a great thing. they are for people who want to go to college, and want to get it done quickly. They won't disappear. The federal student loan program has had an unforeseen consequence...and they are now more needed than ever precisely because they existed in the first place...that I see as a huge problem moving forward as people are making less because of inflation and a poor economy/jobs market...

If I knew then what I know now, I would have gone to school part time instead of going to school full time working part time during the year for a few years and being swallowed by debt. It isn't something that is thought about when you are 18, 20,000 in debt isn't real at that age...as I have gone back to school I realize what that type of loan means and I am now paying for all of my classes up front. I also have work experience that makes my educational experience better...

keeponrockin

Up here in Canada, one can go to the best school in the nation (consistently ranked with the best in the world) for 4 years and get their undergraduate degree for... $40,000 MAX (Probably closer to 25 grand).

Jason P

Go Beavers wrote:

I mean that housing values are falsely inflated, and there isn't anything people get in return for what they're paying.

Kinda like education nowadays?

Jason P

Notre Dame is raising tuition 3.8% next year. That brings tuition and room & board to $55K ... per year!

http://www.indianasnewscenter.com/news/local/Tuition-Going-Up-38-at-Notre-Dame-139082979.html

That is in-fucking-sane! A little over ten years ago I received a degree for $38K ... total.

Several things have not made sense to me in that past 15 years ...

* The dot com craze and stock free-for-all
* Housing market and prices going through the roof
* Tuition prices going through the roof.

Two of these head-shakers have blown up in faces already ... is tuition next?

keeponrockin

Jason P wrote:

Notre Dame is raising tuition 3.8% next year. That brings tuition and room & board to $55K ... per year!

http://www.indianasnewscenter.com/news/local/Tuition-Going-Up-38-at-Notre-Dame-139082979.html

That is in-fucking-sane! A little over ten years ago I received a degree for $38K ... total.

Several things have not made sense to me in that past 15 years ...

* The dot com craze and stock free-for-all
* Housing market and prices going through the roof
* Tuition prices going through the roof.

Two of these head-shakers have blown up in faces already ... is tuition next?

Jesus...

Yeah, like I said, here in Canada... You could get an entire undergraduate degree for that. And have AT LEAST 15 g to spare.

blackredyellow

Even if tuition costs go down some, will any bank provide student loans without gov't backing? You are basically asking a bank to loan tens of thousands of dollars (maybe $100,000 +) with no collateral to back it. I can't imagine any bank in their right mind giving out that type of money to most people without huge interest rates.

blackredyellow

mikepegg44 wrote:

Do you think the system can support the constant rise in tuition? How long before a degree isn't worth the money paid for it?

I'd guess for a lot of people/professions, we're at the point now.