Yeah, I totally get the sentiment. It's absolutely valid and reasonable. But at some point we have to get to a place where newcomers to the system start getting a 'better deal' then the people came before them.
That's good news! That means the system is improving!
Well, the sentiment aside there's also the issue of the fact that you are subsidizing people that made less financially sound decisions and punishing those who made financially responsible decisions. What about the moral hazard?
i.e. if two people had identical student loan balances with $500 minimum payment per month and one person decided to pay $1000 monthly to pay it off quickly and the other person paid $500 and YOLO'd the other $500 monthly into instagram vacations, takeout food, Bitcoin at 19k, etc, you are effectively subsidizing the second group of choices.
Look at it another way. In the case of universities, the costs are the tuition/fees and the value is the income earned from skills obtained. The reason we are in this student loan crisis (and it is a crisis) is because universities charge too much and the value of what they provide is too low.
So the fact that students are not able to repay the loan is telling you something important -- university education is too expensive.
All of this is above and beyond our existing subsidies of 10K/FTE -- which in many OECD nations would be enough to fully fund university education.
So like healthcare, this is a cost crisis rather than a government funding crisis. You do not decrease costs by increasing subsidies. That is not making the situation better for anyone. Subsidies may be part of the solution, but we are already subsidizing enough, what we are not able to do is control costs and increase the value of the education for our students.
And the fact that in the past, students were able to go to university and pay off their loans without it being a national crisis but now they can't does not mean things have gotten better, it means things have gotten worse.
We need to get back to a state where university education can be provided cost effectively, rather than continuously increasing subsidies, because as long as universities can charge whatever they want and know the government will step in and pay for it, then that is a recipe for declining value, not increasing value.
Macross8299|6 years ago
i.e. if two people had identical student loan balances with $500 minimum payment per month and one person decided to pay $1000 monthly to pay it off quickly and the other person paid $500 and YOLO'd the other $500 monthly into instagram vacations, takeout food, Bitcoin at 19k, etc, you are effectively subsidizing the second group of choices.
rsj_hn|6 years ago
So the fact that students are not able to repay the loan is telling you something important -- university education is too expensive.
All of this is above and beyond our existing subsidies of 10K/FTE -- which in many OECD nations would be enough to fully fund university education.
So like healthcare, this is a cost crisis rather than a government funding crisis. You do not decrease costs by increasing subsidies. That is not making the situation better for anyone. Subsidies may be part of the solution, but we are already subsidizing enough, what we are not able to do is control costs and increase the value of the education for our students.
And the fact that in the past, students were able to go to university and pay off their loans without it being a national crisis but now they can't does not mean things have gotten better, it means things have gotten worse.
We need to get back to a state where university education can be provided cost effectively, rather than continuously increasing subsidies, because as long as universities can charge whatever they want and know the government will step in and pay for it, then that is a recipe for declining value, not increasing value.
bespoke_engnr|6 years ago