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    The College Bubble Party

    The College Bubble Party

    The “Occupy Wall Street” craze has spread to major U.S. cities. From what I can tell, the backbone of this movement are college-aged students like myself who blame corporations for their misfortunes, particularly college affordability and it’s consequences on employment.

    They should be angry at the government for their high student loans and I wish people researched the matter much better.  In the past few decades, America has seen many attempts to legislate college college “affordability” through various measures like increasing federal funding for student loans, or even preventing “bad choices” by limiting credit card options for young people. This is a popular political stunt since it holds noble aspirations, though the strategies themselves are rarely effective. For instance, a crux of the Obama administration’s goals, as stated on the website of the Vice President’s Middle Class Taskforce, is “increasing loans and grants, [to ensure that] families will always be able to count on the help they expect.” Yet Econ 101 suggests, and empirical evidence corroborates, an increase in federal loans, Pell grants, and other assistance programs results in higher tuition over time. According to a study by Bridget Long of Harvard University, private four year colleges increased tuition prices by more than two dollars for every dollar increase in Pell Grants, and public colleges increased theirs by .97 for every dollar increase. From 1979 to the present day, college tuition has increased in price by roughly 160%, while the average median family income has increased by 10%.

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    Comments


    College loans are another example of government trying to “help” us.

    Hmm. It looks like students are defaulting on their loans. That’s not good – banks will stop lending money to students! We can fix this: 1) Have the taxpayers guarantee the loan, and 2) Add student loans to the list of debts which cannot be gotten out of via bankruptcy. Mission accomplished! But only if your mission was to keep the money flowing to the colleges no matter what kind of debt load gets piled on our children.

    When Johnny comes to the bank for money, the bank should be sufficiently concerned about him defaulting that it asks him exactly what he plans to study, and how that is going to enable him to pay off the loan. And if the bank doesn’t like Johnny’s answer, it should refuse to loan the money. Now that’s an inexpensive education!

    The college loan scam is one of the biggest crimes being perpetrated on the next generation by our elected fixers.


     
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    Milwaukee | October 4, 2011 at 12:45 am

    Gibbie “2) Add student loans to the list of debts which cannot be gotten out of via bankruptcy.”

    Where have you been? I don’t know about your 1) but 2) has been true for a number of years. Loads of folks owe and manage to string out their payments for years and years. They just keep rolling them over, getting one forbearance after another. The schools don’t mind steering students to loans, and then raising their tuition and fees. What a racket! Right after they investigate the for-profits they’ll be too exhausted to investigate the not-for-profits.


     
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    Milwaukee | October 4, 2011 at 12:48 am

    What I should have said is that because students can’t discharge their student loans in bankruptcy court, the banks and schools have been willing to encourage careless borrowing. Perhaps allowing such a discharge would encourage banks and schools to be more prudent about who they encourage. Only now the Federal government is in the act, and they don’t really care. Or really don’t care. Or don’t give a rat’s ass, as long as their favorite “under-represented group” is collecting benefits.


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