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Anonymous @ 6 years, 9 months ago

Absolutely. I just read an article that Class of 2013 grads are averaging 35k in debt. What do you think should be done to address the increase in cost of tuition? What’s causing it, in your opinion?

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Kaylanna F. @crazyliberty 6 years, 9 months ago

Just like any other market, it can be flooded with “free” money. So colleges want to inflate the prices causing an imbalance of prices and services.

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kimberly @ladylibertarian 6 years, 9 months ago

There is absolutely no doubt that the college loan bubble will burst in the near future. How near is highly connected to wall street, the FRB, and how much money the gov wants to pump into SallieMae (SLMA) before they realize that giving out free money is going to come back and bite them in the ass.

In the housing bubble banks gave everyone and their mother loans they were highly unqualified for. Oh you make $50k a year but want a loan to buy a $1 million house? Sure here’s money….and then the banks turned around and acted surprised when people couldn’t pay them back. It’s the exact same with SallieMae. We want to give everyone the chance to educate themselves, but the price of college has skyrocketed bc our society believes everyone needs a college education. I’m not saying that people should be denied their rights to an education, but the prices of universities will only continue to rise while the government supplies students with millions upon millions of dollars in free money to finance education.

I certainly have no idea how to solve the problem, but it’s something that needs to be addressed. The people who truly need the loans are the ones who may be the least likely to pay them back. Graduating with a bachelors almost guarantees at least $30k in debt, and then this newly minted college graduate enters into an economy where jobs are incredibly difficult to find, most of which prefer to hire those with experience, and you, as the indebted college grad have six months to find a job before the loan payments start coming in.

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Gary @grand-vizier 6 years, 7 months ago

As a general rule of lending, the lender should have, in the absence of actual collateral , some realistic plan for repayment of the loan. This should also hold for studen loans unless we rename them “grants”.
At a minimum the college loan should be based on the expectation that the education being sought will educate the student in a discipline likely offer employment or opportunity that will generate income sufficient to live on and repay the loan.
The student should have a serious plan that analyzes how much can be profitably borrowed and repaid for the intended education.
There are many jobs for which too many people have been trained and therefore many will be unemployed in their chosen field and unable to repay the student loan.
Just like real estate lenders will not loan on developements where there are too many vacancies, lenders should reduce or eliminate loans to over populated professions.
This is not to say the courses and opportunities should be denied, just that financing should then require different criteria than for loans to disciplines where shortages exist and probabilities of repayment are more certain.
Colleges offer numerious courses which, while interesting,indeed noble, are not likely to result in very gainfull opportunites.
I suggest if the colleges had to have participation in the studen loans that they would be more circumspect in the lending reqiurements.
This would also cause students to take a much more realistic decision about the real value of college and to more fully examine the very real options.
I know a lot of extremely successful people without degrees.


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