Soaring Student Debt Prompts Calls for Relief

Re:Soaring Student Debt Prompts Calls for Relief by btilly on Tuesday September 13, 2016 @08:11PM (#12493312)

I think the government should get out of the student loan industry entirely: stop subsidizing them and making interest rates a political issue. Let the market signal which degrees are valuable and which aren't. But also make them dischargeable in bankruptcy. At least then there would be a consequence for people deciding to take out expensive loans for education.

In economic models, one of the biggest reasons for soaring tuition is increased ability to pay. So every move to increase how easy it is to take out student loans causes tuition to go up which causes pressure to make it easier to take out student loans.

Therefore the expected result of your policy is outrage, short term dislocation, and then greatly reduced tuition. Which will move money from academic administration to the rest of the economy.

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Re:Soaring Student Debt Prompts Calls for Relief by x0x0 on Tuesday September 13, 2016 @08:18PM (#12493342)

There have also been massive cuts in state aid. Frankly, having the federal government instead of state governments pay for college seems better -- the fed always captures benefits (increased tax money) while if you leave the state you grew up in, the state takes a bath on you.

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Re:Soaring Student Debt Prompts Calls for Relief by btilly on Tuesday September 13, 2016 @09:28PM (#12493636)

I disbelieve.

The cuts in state aid were mostly due to the 2008 financial crisis. However over decades, tuition has been rising significantly faster than inflation, while state aid has mostly kept up with inflation.

Furthermore rising tuition is not just a phenomena of state schools. Private universities have seen tuition skyrocket over the decades by similar percentages as public schools, and they never received state aid.

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Re:Soaring Student Debt Prompts Calls for Relief by x0x0 on Wednesday September 14, 2016 @01:16PM (#12499166)

No, aid cuts where not due to 2008. eg in WI, which I'm familiar with, they started in approx 2001 and were cut by 50% over that decade. Eg in 2000, students paid about 30% of the cost and by 2010 60%.

https://badgerherald.com/news/2010/04/07/as-state-funding-fa...

and the cuts have continued, eg a further $250m in 2016

http://host.madison.com/wsj/news/local/education/university/...

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Re:Soaring Student Debt Prompts Calls for Relief by mjevans on Wednesday September 14, 2016 @01:29AM (#12494430)

They did receive 'aid' in two forms:

* Student loans that cannot be discharged via bankruptcy.

* Student loans that are more accessible thanks to both government loans and lending policies that encourage banks and credit unions to furnish student loans.

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Re:Soaring Student Debt Prompts Calls for Relief by btilly on Wednesday September 14, 2016 @11:26AM (#12497895)

Yes, but that is not what is meant by "state aid".

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Re:Soaring Student Debt Prompts Calls for Relief by morgante on Tuesday September 13, 2016 @08:12PM (#12493321)

Exactly. It would in the end be better for everyone except for overpaid administrators.

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