If the govt didn't guarantee student loans

Discussion in 'Politics' started by ChkitOut, Apr 4, 2012.

  1. pspr


    There is over a trillion dollars in outstanding student loans. It could be the next toxic asset.
  2. Lucrum


    I agree wholeheartedly.
  3. piezoe


    Tuition in the public institutions, overall in the U.S. has just kept pace with the consumer inflation rate computed using the 1980 method. You're suggesting that because students have access to loans, the institutions have raised their tuitions more than they would have otherwise. This does not seem to be supported by fact, since the entire increase is attributable to inflation. If students did not have access to loans, there would be fewer students, and institution could downsize some. There is, however, economy of scale in the public institutions, so downsizing could be expected to result in an increase in tuition. Your thesis is not reasonable, at least as far as the public institutions are concerned. Your bet might be right if you were to examine the tuition increases at the most prestigious private universities with large endowments. They have different constraints then the public institutions and may play the tuition game differently, if they choose to.

    The actual facts, as far as public institutions go, show that their total funding has lagged inflation, because State and Local appropriations have been cut. For example appropriations dropped by about 10% over the ten year period ending in 2008. (The most recent ten-year period I have data for.)

    The students ire is misplaced. They should be demonstrating in Sacramento instead.
  4. Lucrum


    Which "facts" are you referring to?

    Sky Rocketing College Costs

    By Gordon H. Wadsworth

    Updated 10/19/2011

    Economists predict the cost of attending state colleges will soar to $120,000 by 2015. Currently over $40 billion in student loan debt has forced many former students into financial bondage or even bankruptcy.

    In the 19 years that I have been directly involved with college financial aid, I have heard hundreds of students and parents ask the same question, “How do I pay back those expensive student loans?” Just recently, a woman called asking for help. She told me she has loans dating back to the early 1980’s. All I could do was pray with her. There are no easy fixes. Having student loan debt is like owing money to the IRS. Once caught in the snare, there is no way out.

    College tuitions soar each year, advancing far in excess of the inflation rate. The overall inflation rate since 1986 increased 115.06%, which is why we pay more than double for everything we buy. On the other hand, during the same time, tuition increased a whopping 498.31%...
  5. piezoe


    The data I quoted uses the mean for public colleges and universities and the consumer inflation rate. What inflation rate and which types of institutions are included in the study you quoted? What specific period of time is used? They say "since 1986" but how many years are included. They may have cherry picked an uncharacteristic period. Without more information the data is useless. They might, for example have used the core inflation rate. Beware of articles that use verbs and adjectives like "soar" and "whopping" and don't spare the adverbs, they are usually promoting biased viewpoints and are seldom objective. I call these "Gee Whiz" articles.

    Here is a link to another post where more specific data is given: http://www.elitetrader.com/vb/showthread.php?s=&postid=3480020#post3480020
  6. Lucrum


    Since 1986.
    26 years
    Maybe, although I'm not seeing any signs of it.
    Speaking of which care to share your "superior" data?
    Which inflation rate does your contradictory data use?
    Point taken, although the difference between 115% and almost 500% is "whopping" where I come from.
  7. piezoe


    Sorry I was editing in the link above while you were posting. See that link for more detail. If I can I'll get you a link to the actual data source.
  8. 1) Government funnels money through students to teacher unions via huge teacher salaries, tenure and pensions.

    2) Unions return about 10% via donations to Democrats. It is the Democrats 10% commission.

    3) Government takes over lending business from private business.

    4) Government creates crisis, negates debt. Debt get incorporated into national debt.

    Its called money laundering.
  9. G-Unit


    In Europe, students get free college unlike here. What's not to like. How would you like it if the government paid for your BS/BA degree?

    People complain about taxes here, but really it all goes around. People pay a ton of money here for college with lower taxes than europe. People in Europe get free college and cheap health care with higher taxes. You're paying no matter what. It doesn't matter either way.
    #10     Apr 4, 2012