Government (taxpayers) underwrite unlimited amounts to uninformed buyers paying informed sellers.
I am a seller (college boss), and I can boost my own income, and I know I have no competitive pressure to keep prices down, so why not increase the college budget and spending, hence justifying tuition increases.
Common sense is often wrong. I haven't found any reliable source yet that even mentions the availability government loans as being a driving factor. Based on the limited research I've done over the last few minutes, the main drivers appear to be:
1. A large increase in demand for College. I could imagine this may be, in part, due to more accessible student loans. But it appears that many factors have come into play, and the main one is the perception that you cannot get a liveable wage in this country without a college degree.
2. Less funding from state governments
3. Increased spending in administration and student services unrelated to education.
Common sense is horseshit. You know what was common sense in the 1600s? A gentleman is clean, so he doesn't need to wash his hands between cutting open a corpse and delivering a baby, and oh gee why do so many women get awful infections after childbirth?
Common sense is the rallying cry of people who cannot backup their claim by other means.
Because it is not 'free'.
It puts students in debt.
You are boosting your income by exploiting students through usury.
Lets say there is no government, then where was the 'competitive' pressure? How does government loans take away competition? Did they close schools to eliminate the competition?
92%
Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers.
I think it's then pretty fair game for a forum comment to then suggest there's a causal relationship between "an entity that can print the currency that denominates the debt is backing the debt" and "this drives the price of the thing up due to easier access to funding for it".
No, it doesn't. That quick-answer doesn't even mention rising tuition costs. It's only tangentially related. The existence of government backed student loans does not in itself prove they are the main cause of increased tuition.
To prove that claim, you'd need to actually demonstrate some sort of causal relationship and have data to back it up
For example, you could make the argument that:
1. Demand is the primary cause of tuition increases
2. Government backed student loans are the primary cause for the increase in demand
I believe that 1 is almost certainly the main cause of tuition cost increases. What I haven't seen any evidence for is 2. If it's true, show me the evidence. I'm open to it.
From what this article states and the research I've done, the main driver of demand is not cheap government loans. It's the labor market. The best jobs in this country require a college degree. That is what is probably driving demand, the desire to earn a liveable wage. Not the fact that you can get a cheap loan.
The claim: > Main cause: Government-backed student loans.
I've read the article. It discusses student loans and how they've skyrocketed, but never makes the claim that their availability is the cause. Instead, it argues a change in America's "labor profile" is to blame for the rise in demand (which, in turn, leads to higher tuition):
> Rising enrollment is also associated with a changing US labor profile; for example, manufacturing jobs were eclipsed by “business and professional services” jobs as well as healthcare, education, and retail jobs.
Going further, the author suggests we need to forgive/cancel the student loans:
> These loans should be forgiven/cancelled
To me, this implies the author does not believe federal student loans are to blame.
lotsofpulp|2 years ago
Government (taxpayers) underwrite unlimited amounts to uninformed buyers paying informed sellers.
I am a seller (college boss), and I can boost my own income, and I know I have no competitive pressure to keep prices down, so why not increase the college budget and spending, hence justifying tuition increases.
drew-y|2 years ago
1. A large increase in demand for College. I could imagine this may be, in part, due to more accessible student loans. But it appears that many factors have come into play, and the main one is the perception that you cannot get a liveable wage in this country without a college degree.
2. Less funding from state governments
3. Increased spending in administration and student services unrelated to education.
Here are the sources I've read through so far. https://www.bankrate.com/loans/student-loans/why-is-college-... https://manhattan.institute/article/a-new-approach-for-curbi...
mrguyorama|2 years ago
Common sense is the rallying cry of people who cannot backup their claim by other means.
FrustratedMonky|2 years ago
You are boosting your income by exploiting students through usury.
Lets say there is no government, then where was the 'competitive' pressure? How does government loans take away competition? Did they close schools to eliminate the competition?
ye-olde-sysrq|2 years ago
https://www.google.com/search?q=what+percent+of+student+loan...
92% Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers.
I think it's then pretty fair game for a forum comment to then suggest there's a causal relationship between "an entity that can print the currency that denominates the debt is backing the debt" and "this drives the price of the thing up due to easier access to funding for it".
drew-y|2 years ago
To prove that claim, you'd need to actually demonstrate some sort of causal relationship and have data to back it up
For example, you could make the argument that:
1. Demand is the primary cause of tuition increases
2. Government backed student loans are the primary cause for the increase in demand
I believe that 1 is almost certainly the main cause of tuition cost increases. What I haven't seen any evidence for is 2. If it's true, show me the evidence. I'm open to it.
From what this article states and the research I've done, the main driver of demand is not cheap government loans. It's the labor market. The best jobs in this country require a college degree. That is what is probably driving demand, the desire to earn a liveable wage. Not the fact that you can get a cheap loan.
__loam|2 years ago
drew-y|2 years ago
The claim: > Main cause: Government-backed student loans.
I've read the article. It discusses student loans and how they've skyrocketed, but never makes the claim that their availability is the cause. Instead, it argues a change in America's "labor profile" is to blame for the rise in demand (which, in turn, leads to higher tuition):
> Rising enrollment is also associated with a changing US labor profile; for example, manufacturing jobs were eclipsed by “business and professional services” jobs as well as healthcare, education, and retail jobs.
Going further, the author suggests we need to forgive/cancel the student loans:
> These loans should be forgiven/cancelled
To me, this implies the author does not believe federal student loans are to blame.