[turtle777]

Originally Posted by besson3c 

So then why aren't cost controls in the discussion? After all, Canada's health care system is not in the private sector, yet it costs much less to run than the American system.

Cost controls is the equivalent of trying to using a second wrong in order to make it right (again).
The first wrong is unlimited money supply. To counteract that with a second wrong (cost controls) is a failed strategy.

Look at a simple depiction of that: countries with hyperinflation (= too much money supply).
All attempts to stop hyperinflation with cost controls have ALWAYS failed.
It creates shortages and a black markets.

-t

[besson3c]

Originally Posted by turtle777 

Cost controls is the equivalent of trying to using a second wrong in order to make it right (again).
The first wrong is unlimited money supply. To counteract that with a second wrong (cost controls) is a failed strategy.

Look at a simple depiction of that: countries with hyperinflation (= too much money supply).
All attempts to stop hyperinflation with cost controls have ALWAYS failed.
It creates shortages and a black markets.

-t

It seems like you are obfuscating matters by speaking on a theoretical basis, because I don't see failure with the cost controls put on health care in Canada (and prescription drugs), nor do I see a problem with putting cost controls on the premium you pay on tuition.

[turtle777]

Originally Posted by besson3c 

It seems like you are obfuscating matters by speaking on a theoretical basis, because I don't see failure with the cost controls put on health care in Canada (and prescription drugs), nor do I see a problem with putting cost controls on the premium you pay on tuition.

How do you even know it's classic Cost Controls that are at play ?
How do you know it's effective ?
How do you know there are no hidden negative impacts (shortages, alternative sources at higher cost) ?

I think your comment is based on your philosophy that Cost Controls are an effective means. You have neither sufficient evidence, nor data to back that up.

-t

[andi*pandi]

Aren't universities considered a free market enterprise? Capitalism, supply and demand...

[besson3c]

Originally Posted by turtle777 

How do you even know it's classic Cost Controls that are at play ?
How do you know it's effective ?
How do you know there are no hidden negative impacts (shortages, alternative sources at higher cost) ?

I think your comment is based on your philosophy that Cost Controls are an effective means. You have neither sufficient evidence, nor data to back that up.

-t

If your point is that there is a lot I don't know, you're right, and I'm sure that there is a lot that most Americans don't know about how things work in Canada and other parts of the world as well (as well as how things work in this country).

I just generally feel extremely guarded against accepting this quasi-religious thing that many conservatives seem to have going on where they are willing to put just about every issue into this little box that reinforces their quasi-religious narrow ideology. I.e. I'm uncomfortable in accepting the across-the-board notion that cost controls cannot work without further examining the issue. I've found very few conservatives here intellectually interested in entertaining something that just might be outside of their little ideological prism.

Many retorts to this line of questioning seem to come back to this notion that conservatism is all about not trying stuff that has a clear history of not working, except this accounting often seems to have its own little spin on it with some theoretical concepts thrown into the mix, and they seem unwilling to entertain the idea that maybe there is something to theoretical concepts like the idea that sometimes it makes perfect economic sense to invest in stuff that has value. The value question is sort of how I came to this thread, and that is, assessing the relationship between maximizing the number of qualified and interested college applicants, and how this might impact our own economy in the long run.

Anyway, I digress big time...

[Athens]

Originally Posted by besson3c 

So then why aren't cost controls in the discussion? After all, Canada's health care system is not in the private sector, yet it costs much less to run than the American system.

I don't know how I missed this but Besson3c you are wrong. Most of the Canadian Health Care system is private sector. The only thing that is different between Canada and the United States when it comes to health care is the insurance aspect of it.

Almost all doctor clinics are privately run businesses. Diagnostic centers and laboratories are mixed between private companies and health authorities, which are government run. BC Bio-medical Labs ltd is owned by a group of doctors for example and most blood work goes to them.

The largest and major hospitals are part of the health authorities which is government mandated, while independent hospitals and specialty hospitals are run by charity groups and religious groups. BC Ambulance service is run by the government. But in Alberta I noticed there ambulances where private companies. BC also has private for profit surgical hospitals as well.

The difference between the two systems is in BC, every man woman and child living here legally is covered by a single Insurance Company, MSP which is government owned for basic care. In the US some one has to select from any number of private insurance companies for basic care.

Health Care delivery is done by both private and public entities. The UK is more government run, with doctors getting pay checks from the government in the government hospitals and are considered government employees.

Canada is in between the UK and the US on health services. More government involvement then the US, less government involvement then the UK.

The massive savings in the Canadian system compared to the American system comes from the fact its only one insurance company to deal with. The administrative overhead is a lot cheaper. You do not need a army of staff to deal with all the insurance companies and all the different possible policies and the different levels of coverage each person could have. The province saves additional money by negotiating prices of bulk medicine then selling them to the pharmacies at a subsidized price to keep medicine affordable.

But our system is very private indeed. When I go to my doctor (private business) which gets me sent to the lab for blood work (private business) I don't get any government services from it except for the insurance which pays for the doctor visit and the lab tests.

When I had my Cat scan 2 years ago I had it done at a private religious hospital of Saint Marry's just by chance they had the lower wait list and I was willing to go to any hospital not just the closet one to my house. So saying our health care isn't in the private sector is pretty incorrect.

[besson3c]

I know that Canadian practices are privately run businesses Athens, I was referring to the insurance system, which I thought was apparent. I guess not though.

[OAW]

Originally Posted by turtle777 

You fail to see the connection.

Why "can" they just increase rates w/o adverse effects ?
Because any price asked is being paid. And that's due to student loans.

Same, btw, is true for health care. The prices go up exactly BECAUSE there is an (almost) unlimited pot of money. Amazing how people don't understand that simple aspect of basic economics.

-t

No I get what you are saying. I just think the position you are taking is essentially the tail wagging the dog. It comes down to this ...

A. College and university administrations sought to capitalize on government subsidies of higher education by raising tuition, figuring the students wouldn't notice the impact on their wallet until after graduation anyway.

or .....

B. College and university administrations have raised tuition at 3+ times the rate of inflation because a college education is an inelastic commodity ... and students began to increasingly take out loans OUT OF NECESSITY to afford it.

Now even though I get where you are coming from, I'm rolling with scenario B. And this is why ...



What this chart tells us is that since 1978 college tuition and fees have undergone an inflation rate even higher than health care! Now that is freaking INSANE anyway you slice it. But let's tuition rates to state and local subsidization rates:



From 1998 to 2005 even as government subsidies fell ... tuition rates continued to increase. In fact, the inflation rate of tuition seems to be totally unaffected by government subsidies one way or the other as it continues on a fairly steady and consistent slope.

OAW

[turtle777]

Originally Posted by andi*pandi 

Aren't universities considered a free market enterprise? Capitalism, supply and demand...

Well, sure. That's EXACTLY the at play, showing how the problem is created.

Originally Posted by Cato White Paper

It’s a simple matter of supply and demand. On the demand side, more
and more Americans have sought a college education, pushing prices
higher. Ordinarily, the upward pressure would have been restrained by
consumers’ willingness and ability to pay, but, as economist Richard
Vedder explains in Going Broke by Degree: Why College Costs Too
Much, because third parties like the federal government absorb tuition
increases, budget constraints have been diminished. "The shift to the right
of the demand curve for students—and the resulting higher tuition,"
Vedder writes, "[have] been aided and abetted by a large and proliferating
number of government assistance programs."

http://www.cato.org/pubs/handbook/hb111/hb111-21.pdf

Another nugget:

The Bureau of Labor Statistics reports that college students devote
3.2 hours to education on an average weekday, versus 3.9 hours
to "leisure and sports."

WTF ? No wonder it takes forever to graduate.

The National Center for Higher Education Management Systems
reports that in 2006 the six-year graduation rate for bachelor’s
students was only 56.4 percent.

-t

[Athens]

Originally Posted by besson3c 

I know that Canadian practices are privately run businesses Athens, I was referring to the insurance system, which I thought was apparent. I guess not though.

You are talking to mostly Americans who have absolutely NO clue about Canadian health care except for scare and attack ad's provided to them full of BS. You where not clear enough for them. Though I also thought you meant the entire system was public too.

On the case of our universities the governments provide funding to subsidize education costs for Canadians. Foreign students pay 2 to 3 times as much because they do not get that subsidy. This results in keeping education affordable for students. Universities must apply for permission to increase rates and the rate increase is controlled by the government. Just like rent increases are limited to 5 or 6% in BC. Education debt is not a serious problem here. Additionally for those that don't make a lot of money or come from poor families they also qualify for cheap student loans to allow them the same access to higher education as those from well off families as well.

[turtle777]

Originally Posted by OAW 

From 1998 to 2005 even as government subsidies fell ... tuition rates continued to increase. In fact, the inflation rate of tuition seems to be totally unaffected by government subsidies one way or the other as it continues on a fairly steady and consistent slope.

*sigh*

Seriously, are you ignoring my main point (student loans) on purpose ?

-t

[Athens]

Originally Posted by turtle777 

*sigh*

Seriously, are you ignoring my main point (student loans) on purpose ?

-t

I have to agree with OWA, the price increase appears more to do with supply and demand and what the market will bare. And as long as universities have a strong demand and people are willing to pay the prices even through loans the price will continue to go up until it hits that point the market won't pay those prices any more. Subsidy only slows this eventual price plateau down.

[OAW]

Originally Posted by turtle777 

*sigh*

Seriously, are you ignoring my main point (student loans) on purpose ?

-t

Actually I'm not. A college education has a cost. That cost is paid for in some combination of the following:

1. Direct expenditure by the student and/or his or her family.

2. Direct expenditure by government funding.

3. Indirect expenditure by government funded student loans.

4. Indirect expenditure by privately funded student loans.

5. Indirect expenditure by scholarships and grants.

The point I'm trying to get across here is that #2, #3, #4, AND #5 constitute the "subsidization" of the cost of a college education which per your position leads to increased tuition costs. But the chart I posted shows that #2 had no bearing whatsoever on the steady and consistent increase in tuition rates. So it's not a stretch to contend that neither does #3 or #4 or #5. Would you suggest that college scholarships should be eliminated because they cause the cost of a college education to increase as well? Seriously ... I'm just asking.

I'm looking for a chart that shows student loans vs. tuition rates over time. And I fully expect it'll show limited to no correlation between the two. I just haven't been able to find one yet ... but I think you get the point I'm trying to make here.

OAW

[besson3c]

OAW: so are you a socialist or a communist?

[turtle777]

Originally Posted by Athens 

I have to agree with OWA, the price increase appears more to do with supply and demand and what the market will bare.

I'm sorry, but this is stupid. OF COURSE supply and demand are in effect.
The point is that student loans make the DEMAND possible, hence driving up prices.

See my post above.

It’s a simple matter of supply and demand. On the demand side, more
and more Americans have sought a college education, pushing prices
higher. Ordinarily, the upward pressure would have been restrained by
consumers’ willingness and ability to pay, but, as economist Richard
Vedder explains in Going Broke by Degree: Why College Costs Too
Much, because third parties like the federal government absorb tuition
increases, budget constraints have been diminished. "The shift to the right
of the demand curve for students—and the resulting higher tuition,"
Vedder writes, "[have] been aided and abetted by a large and proliferating
number of government assistance programs."

-t

[turtle777]

Originally Posted by OAW 

I'm looking for a chart that shows student loans vs. tuition rates over time. And I fully expect it'll show limited to no correlation between the two. I just haven't been able to find one yet ... but I think you get the point I'm trying to make here.

Have you REALLY been looking ? Your google-fu must be fu-cked up.





And just in case the charts don't speak for themselves:

1) Median household income is basically flat, whereas college tuition is way up. How the heck can households afford it ?
2) Again, tuition grew more than CPI and home prices.
3) Lo and behold, Student Loans are on a steady rise, whereas other loans (in this case credit card loans) are falling.

You can't deny the correlation, but that's not enough.
There is causation, and it's easily explained by basic supply & demand dynamics.

Sources:

Teacher World � 2011 � June
Media | Felix Salmon - Part 3
Education: Supply Side Deficiencies or a Bubble? � Modeled Behavior

-t

[turtle777]

WTF ?

Tuition for the fall semester at the California State University system will be double of what it was for the 2007-08 academic year

The reason must be those greedy f*cking Capitalist education companies.

Oh, wait, California State University. Never mind.

Monuments instead of Education | ZeroHedge

-t

[OAW]

Originally Posted by turtle777 

Have you REALLY been looking ? Your google-fu must be fu-cked up.

We'll just note that you did not post a chart that juxtaposed student loans debt and tuition increases as I described. Furthermore, this comes down to a chicken vs egg proposition. Tuition has been rising at 3+ times the rate of inflation for well over 30 years. Median incomes have been essentially flat for decades now. Interesting correlation between that and the rise of conservatism as the dominant political force in Washington DC. In any event, the point still remains. Student loan debt is steadily rising OUT OF NECESSITY because the earning potential afforded by a college education is not readily achievable by any other legal means. The demand for it is simply inelastic compared to other goods and services. We should also note that developed countries that provide government funded higher education doesn't have nearly the tuition inflation rate as the US which relies heavily on the private sector to provide these services.

OAW

[CRASH HARDDRIVE]

I'm of the mind that my son will go to college in Europe. The quality of a lot of 'higher' education the US is low, yet the cost is outrageously high.

Almost to a person, the most successful people I know -both the wealthiest, hands-on knowledgeable and the most useful to their fellow man- have tech and trade degrees. In contrast, some of the most useless slugs I've ever come across have worthless college degrees that mean exactly squat in the real world.

[turtle777]

Originally Posted by OAW 

Student loan debt is steadily rising OUT OF NECESSITY because the earning potential afforded by a college education is not readily achievable by any other legal means.

Seriously, OAW, are you shitting me ? Has ANYBODY here disputed this ?

Stop rambling about things. Stop stating the obvious over and over again.

You come across against the idea that student loans FEED the higher cost of eduction.
So far, you have not even provided an attempt at rebuttal. So, put up or shut up.

-t

[turtle777]

Originally Posted by CRASH HARDDRIVE 

I'm of the mind that my son will go to college in Europe. The quality of a lot of 'higher' education the US is low, yet the cost is outrageously high.

Almost to a person, the most successful people I know -both the wealthiest, hands-on knowledgeable and the most useful to their fellow man- have tech and trade degrees. In contrast, some of the most useless slugs I've ever come across have worthless college degrees that mean exactly squat in the real world.

-t

[Big Mac]

Originally Posted by turtle777 

If I had kids, I would make sure they learn German in time. In Germany, Universities cost max. $1,000 per semester.

And why is Germany's system of finance so much more functional? If higher education is heavily subsidized in the US and is also heavily subsidized in Germany, why are costs of out control here and not there?

I also have asked the same question about health care in certain other western countries. Japan's health care system was created by US, and I understand it's both market oriented and cost effective. Why there and not here?

[besson3c]

Originally Posted by turtle777 

-t

If we're talking an undergrad degree, not only does is degree not designed to lead to a particular job, but these days it barely even matters what your undergrad is in anyway with so many undergraduates getting jobs outside of the field their degree was in.

[OreoCookie]

Originally Posted by Big Mac 

And why is Germany's system of finance so much more functional? If higher education is heavily subsidized in the US and is also heavily subsidized in Germany, why are costs of out control here and not there?

I can think of two reasons:
(1) Most of the top US universities are privately owned and have an incentive to make a good profit. While if a university is publicly owned, the incentive is to break even. While turtle thinks this puts pressure on US universities since they're companies, I don't see that. Places such as Princeton profit tremendously from their name, it's almost like a self-fulfilling prophecy: their good name attracts good people while the high tuition fees keeps the barrier high enough. So either you already have money to begin with or you're very determined to get in. Such places can afford to keep the tuition fees high. And I doubt »pressure from the masses« will make them reconsider, there are enough applicants.

Attending a »lesser« university may be a solution, but on the other hand, who'd you rather hire: someone who got a MSc from Princeton or someone who got the same degree from some random cheap university? And which one of those two applicants has the better connections due to him being at a place with lots of kids from influential families?

(2) Many prominent privately owned universities have lost big money during the last crisis. Of course that is just a recent phenomenon, but it can already be felt in the job market of researchers: there are less open positions at top US universities.

[OreoCookie]

Originally Posted by CRASH HARDDRIVE 

I'm of the mind that my son will go to college in Europe. The quality of a lot of 'higher' education the US is low, yet the cost is outrageously high.

Just as a side note: when I left Munich, ~10 % of the first semester students were Chinese, I think. Word has gotten around that you get a very good education for very little money. My parents told me that in the 70s, there were plenty of people from the Middle East (e. g. Persia), and after their return, they kept close ties to Germany, buying German machinery, etc.

[ghporter]

Originally Posted by OreoCookie 

I can think of two reasons:
(1) Most of the top US universities are privately owned and have an incentive to make a good profit. While if a university is publicly owned, the incentive is to break even. While turtle thinks this puts pressure on US universities since they're companies, I don't see that. Places such as Princeton profit tremendously from their name, it's almost like a self-fulfilling prophecy: their good name attracts good people while the high tuition fees keeps the barrier high enough. So either you already have money to begin with or you're very determined to get in. Such places can afford to keep the tuition fees high. And I doubt »pressure from the masses« will make them reconsider, there are enough applicants.

Attending a »lesser« university may be a solution, but on the other hand, who'd you rather hire: someone who got a MSc from Princeton or someone who got the same degree from some random cheap university? And which one of those two applicants has the better connections due to him being at a place with lots of kids from influential families?

(2) Many prominent privately owned universities have lost big money during the last crisis. Of course that is just a recent phenomenon, but it can already be felt in the job market of researchers: there are less open positions at top US universities.

US universities are not about profit, whether to be in the black or just break even. They are, especially the larger ones, in a competition for prestige. It isn't even about being "the best school for X in the country." It's about bragging rights often only for the alumni.

Similarly, university reputations are somehow important to a variety of groups. A school with a long and distinguished history might get a reputation as a "party school," (earned or not) and you can see a lot of stupidity done in hopes of changing that reputation. As an example, "Southwest Texas State University" in San Marcos, TX (between San Antonio and Austin) is a solid school with a great track record as a teaching school (it was originally called a "teacher's college"), but it earned a rep as a place to party (without losing academic credibility). So the Regents changed the name to "Texas State University" (because it's a different name, it must be different there, right...). It's still a short drive from Austin, it's still in picturesque hills with so many places for people to meet, party, etc., but it's got a different name, so it's different... Yeah, nobody really bought that. But the Regents gave it a shot.

I've attended 5 different universities, and I've found that unless you're at an extension campus or in an extremely specialized school, there are a lot of non-academic activities/functions/issues that actually get in the way of academics. Rush week...football season...alumni week...mixers... I always enrolled at a school because of the programs it offered, not because of the football team, or the other crap. (Location was not my choice-the Air Force chose that for me.) But the non-academic crap ALWAYS cropped up in one way or another. At an extension campus of Florida State, I got a letter to "come in to the Registrar's office" to fill out some paperwork. My campus was in Panama (NOT Panama City), and it took THREE letters to the Registrar to get that across. At UTSA, I had a "classmate" who came into Anatomy between 10 and 12 minutes late to every class apparently to "make an entrance," with the door held open by her sorority sisters who watched her performance... I think schools should focus on academics and get the other crap out of the way, and that would allow costs to come down. But that ain't happening.

[Athens]

Originally Posted by Big Mac 

And why is Germany's system of finance so much more functional? If higher education is heavily subsidized in the US and is also heavily subsidized in Germany, why are costs of out control here and not there?

I also have asked the same question about health care in certain other western countries. Japan's health care system was created by US, and I understand it's both market oriented and cost effective. Why there and not here?

Oh thats easy, the people that run the country are also he share holders or owners of the companies they protect.

[OAW]

Originally Posted by turtle777 

Seriously, OAW, are you shitting me ? Has ANYBODY here disputed this ?

Stop rambling about things. Stop stating the obvious over and over again.

You come across against the idea that student loans FEED the higher cost of eduction.
So far, you have not even provided an attempt at rebuttal. So, put up or shut up.

-t

Actually YOU disputed this. YOU are the one taking the position that is essentially the tail wagging the dog. YOU are the one taking the position that tuition is skyrocketing BECAUSE OF the increased use of student loans. Rather than it being the other way around.

Apparently a reminder of the very first thing you had to say in this thread is in order ....

Originally Posted by turtle777

Federal Student loans are THE REASON why college cost has gone up so much, much more than inflation. It's the same as ANYTHING where government provides free money for: COST GO UP !!!

So I'm only "stating the obvious over and over again" because YOU seem to have difficulty acknowledging it. Only when it is hammered home to you do you give it some grudging acceptance ... while you still cling to a position that is in direct contradiction to the "obvious".

OAW

[Athens]

Top Universities in North America 2010-2011

I was looking at one of the most recent school ratings, this one from a UK company and the one thing I noticed is the schools in the top spots have the highest teacher to student ratios (most of them) vs much lower teacher to student ratios at the bottom of the list. I am also shocked at how small some of the schools are. I thought Harvard, Standford, Princeton and Yale where much larger then they are.

[turtle777]

Originally Posted by OAW 

...a lot of fail...

I don't even know how to talk to you, since you seem to have problems following simple logical arguments.
It actually shows pretty quickly - as soon as you run out of understanding, you start rambling and posting long monologues that resembly copy & paste from various internet sources, w/o much inherent logic or sense.

-t

[Uncle Skeleton]

Originally Posted by OAW 

No I get what you are saying. I just think the position you are taking is essentially the tail wagging the dog. It comes down to this ...

A. College and university administrations sought to capitalize on government subsidies of higher education by raising tuition, figuring the students wouldn't notice the impact on their wallet until after graduation anyway.

or .....

B. College and university administrations have raised tuition at 3+ times the rate of inflation because a college education is an inelastic commodity ... and students began to increasingly take out loans OUT OF NECESSITY to afford it.

"What the market will bear" is not "the tail wagging the dog," it's just plain straightforward economics. You say this is an inelastic commodity, but you scoff at the notion that the only limiting factor on the price of an inelastic commodity is the amount of funds consumers are able to draw from, to throw at that commodity. It's tautologically obvious that the more they can borrow, the more they will spend, given the premise that the commodity is inelastic. Therefore, it's irrational for you to dismiss the idea that availability of (lent) funds is the primary determinant of cost, when discussing an inelastic commodity. If the commodity is truly inelastic, then the amount available to borrow will be the ONLY determinant of price.

... and students began to increasingly take out loans OUT OF NECESSITY to afford it.

This is a terribly silly thing to say. In the isolated transaction between borrower and lender, the lender's willingness to lend is what limits the amount, not the borrower's demand to borrow. The lender is (should be) concerned about the ability to repay, not the ability to "sell" as much loan as the borrower will agree to. This is what's broken when the government starts lending unlimited amounts without concern for the borrower's ability to repay.

[turtle777]

^^^

Thanks for that eloquent post. My brain tapped out after reading too much OAW.

Originally Posted by Uncle Skeleton 

The lender is (should be) concerned about the ability to repay, not the ability to "sell" as much loan as the borrower will agree to. This is what's broken when the government starts lending unlimited amounts without concern for the borrower's ability to repay.

EXACTLY. Same principle that created the Housing Bubble and Subprime mortgage debacle.

-t

[OAW]

Originally Posted by turtle777 

I don't even know how to talk to you, since you seem to have problems following simple logical arguments.
It actually shows pretty quickly - as soon as you run out of understanding, you start rambling and posting long monologues that resembly copy & paste from various internet sources, w/o much inherent logic or sense.

-t

Actually, the issue here is your inability to articulate and defend your position. The bottom line is that your "STUDENT LOAN INCREASES = TUITION INCREASES" position reflects a rather simplistic analysis. It doesn't take into account the difference between the COST of a college education vs the PRICE of a college education. It certainly doesn't take into account that the COST is never covered by the PRICE .... whether that's paid for out-of-pocket ... with grants (government or private), scholarships, work study, loans (government or private) .. or some combination thereof. Even for those institutions where tuition is through the roof there is always a SUBSIDY involved ... either from government funding, institutional endowments, patent income, sports program revenue, alumni and other charitable donations, etc. There are simply too many variables in the mix to focus solely on increased availability of student loans as the sole culprit here.

Now as well all know, the PRICE (tuition, fees, housing, books, etc.) of a college education has been skyrocketing for decades now. But the decade between 1987 - 1996 was particularly egregious. So while I fully expect you to continue to be willfully obtuse ... this ought to settle the matter with regard to the point I've been making for those for whom little things like facts matter. Some figures from a GOP-led Congressional Commission on this issue:

Changes in Total Price of Attendance and Net Prices, 1987 to 1996

These figures show the "1987 average/1996 average/% change".

Public Four-year

Total per-student % change: $5,146/$10,759/+109%

Total price minus grants % change: $4,385/$9,365/+114%

Total price minus all aid % change: $3,715/$7,262/+95%

Private Four-year

Total per-student % change: $10,896/$20,003/+84%

Total price minus grants % change: $8,307/$15,069/+81%

Total price minus all aid % change: $6,823/$11,205/+64%

Public Two-year

Total per-student % change: $2,808 /$6,761/+141%

Total price minus grants % change: $2,345/$6,067/+159%

Total price minus all aid % change: $2,125/$5,717/+169 %

Now what these figures reflect is that even after factoring in ALL financial aid ... federal grants, private grants, scholarships, work study, FEDERAL STUDENT LOANS, private student loans, etc. .... the TOTAL PRICE of a college education still increased 95%, 64%, and 169% at public four-year, private four-year, and public two-year institutions respectively in a mere decade. So clearly ... CLEARLY ... this would indicate that the expansion of federal student loan availability, which did in fact happen during this time frame, was not the predominant factor in tuition (or other PRICE related) increases!

Case in point. About 75% of college students attend a public university. Such universities receive a government SUBSIDY at the state and/or local level. Now if that government SUBSIDY is reduced ... as is often the case during budget crunches caused by economic downturns and/or the unwillingness of the electorate to shoulder the necessary tax burden to pay for the services they expect ... the COST of the college education being provided doesn't magically get reduced as well. The university has to make up the difference somewhere ... so what happens is that the payment burden gets shifted from the government SUBSIDY to the PRICE in the form of a tuition increase. REGARDLESS of whether or not student loan availability increased, decreased, or stayed the same.

OAW

[Uncle Skeleton]

Originally Posted by OAW 

OAW

Touché

[OAW]

Originally Posted by Uncle Skeleton 

Touché

Not sure what that's about. But ... ok.

Originally Posted by Uncle Skeleton

You say this is an inelastic commodity, but you scoff at the notion that the only limiting factor on the price of an inelastic commodity is the amount of funds consumers are able to draw from, to throw at that commodity. It's tautologically obvious that the more they can borrow, the more they will spend, given the premise that the commodity is inelastic. Therefore, it's irrational for you to dismiss the idea that availability of (lent) funds is the primary determinant of cost, when discussing an inelastic commodity. If the commodity is truly inelastic, then the amount available to borrow will be the ONLY determinant of price.

If the COST of a college education was only paid for by consumers then you might have a point. But that's not how college funding works as I indicated above. So trust me ... I'm not making this up. Or don't trust me ... and look it up for yourself and see if I'm tripping. Additionally, when dealing with an inelastic commodity a reduction in the "amount of funds consumers are able to draw from" doesn't necessarily limit the PRICE of that commodity. It may very well just limit WHO is able to have ACCESS to that commodity. If one were to take Turtle's position to its logical conclusion ... then ALL financial aid should be limited in order to control the rate of tuition increases. Federal and private grants. Scholarships. Federal and private loans. Work Study. All of it. Why just single out federal student loans? Don't all of these things increase the "amount of funds consumers are able to draw from"? So by that standard the PRICE of a college education should be paid for only via out-of-pocket funds of the consumer. Now let's say that Turtle was able to drink so much of the Ron Paul Kool-Aid that he woke up tomorrow and could make this happen with the snap of his fingers. Would you bet your next paycheck that the PRICE of a college education would suddenly decrease significantly more than the number of people who could no longer afford it? I'm just saying ...

OAW

[Athens]

Maybe should look at this in a different perspective. Has any one looked at the universities in China? The Chinese government has put a lot of importance to Education and its paying off when you look at how much China is changing.

[OAW]

Additional commentary from the GOP-led Congressional Commission regarding the figures I listed above:

"Cost and Price Drivers" in Higher Education

What lies behind increases in tuition? Several of the issues that Congress asked the Commission to address point to potential explanations for rising college costs with the assumption that rising costs result in rising prices. The "cost drivers" that the Commission reviewed can be grouped into six categories: (1) financial aid, (2) people, (3) facilities, (4) technology, (5) regulations, and (6) expectations.

Financial Aid: The Commission reviewed a number of studies on the connection between student financial aid in public and private non-profit institutions of higher education and costs and prices, and it commissioned two analyses of its own. (Figure 3 describes the major programs of Federal student aid grants and work-study, loans, and newly-enacted tax incentives.)

The Commission finds no evidence to suggest any relationship between the availability of Federal grants and the costs or prices in these institutions. Less than one student in four receives a Federal grant, which pays for less than 10 percent of the total price of attendance in either sector. And, although the methodology of financial need analysis is tuition-sensitive, the maximum Pell grant award is capped at $3,000.

The Commission has found no conclusive evidence that loans have contributed to rising costs and prices. One commissioned paper suggests that Federal loan availability has helped contribute to rising prices. Another paper suggests that the capital available through loans has allowed colleges to increase their charges and allowed independent colleges in particular to maintain enrollment in ways that would not have been possible otherwise. The Commission knows of other studies which come to conclusions opposite to these. This question should be studied in greater detail and with much greater attention to empirical facts.

The members of the Commission are, however, unanimously concerned about sharp increases in student borrowing. What is unclear is whether these increases have occurred because (1) higher loan limits and the new "un-subsidized" program permit more borrowing; (2) more families are choosing to finance college expenses through loans rather than from savings or current income; or (3) the price of attending higher education has increased. The Commission's judgment is that all three factors are probably involved.

Finally, the Commission looked at the relationship between institutional financial aid and increases in student prices. In this instance, there is slightly stronger evidence that increases in institutional aid have been one of the cost and price drivers, as institutional aid grew by 178 percent between 1987 and 1996. Since most of the revenue for institutional aid comes from tuition dollars, it seems reasonable to conclude that tuitions could have increased slightly less had institutions not been putting these revenues into institutional aid. At the same time, however, had institutions not generated revenue to pay for institutional aid, student borrowing would have had to increase to maintain access, or access would have had to diminish.

It would appear that this issue is not as clear cut as some would have us believe.

OAW

[Uncle Skeleton]

Originally Posted by OAW 

Not sure what that's about. But ... ok.

Come on now, you're a smart person, just look at the edit timestamp on your post and figure out what happened. Then lighten up and enjoy a laugh at your foibles.

If the COST of a college education was only paid for by consumers then you might have a point. But that's not how college funding works as I indicated above. So trust me ... I'm not making this up. Or don't trust me ... and look it up for yourself and see if I'm tripping.

The commission's findings based on the commission's numbers support the commission's business model? Quelle surprise! Are you as trustful of the tables and conclusions that Exxon produces about the causes of climate change, or that the RIAA produces about music sales' impacts from piracy? How about some corroboration from a source that isn't petting the hand that feeds it?

Additionally, when dealing with an inelastic commodity a reduction in the "amount of funds consumers are able to draw from" doesn't necessarily limit the PRICE of that commodity. It may very well just limit WHO is able to have ACCESS to that commodity. If one were to take Turtle's position to its logical conclusion ... then ALL financial aid should be limited in order to control the rate of tuition increases. Federal and private grants. Scholarships. Federal and private loans. Work Study. All of it. Why just single out federal student loans?

No one singled out federal student loans (except maybe besson3c when he started this thread?).

The real problem isn't loans/aid per se. Loans that are made using appropriate underwriting are fine. They are a sound investment on the part of the lender, because students are generally a good way to generate actual productivity, which is easily converted back to cash to repay the loan, and everyone wins, the goal of capitalism. The difference between this and government interference is that private loans have natural boundaries, they are limited by the actual value of an education, they maintain the premise of supply and demand. Underwriters won't loan more than an education is actually worth; that's a recipe for not being repaid. Government loans are free to rise without limit, that is the problem. They are immune from the actual value of what they're buying (an education). Any increase in the money supply will naturally increase prices (aka inflation), but what we're talking about here is when the increase in the money supply is arbitrarily large (and growing all the time, in a positive feedback loop with prices), rather than simply a reflection of the value of what it's buying.

Edit:

Additionally, when dealing with an inelastic commodity a reduction in the "amount of funds consumers are able to draw from" doesn't necessarily limit the PRICE of that commodity. It may very well just limit WHO is able to have ACCESS to that commodity.

I dispute this. It's just beyond naive to expect that reducing the number of people able to buy a product will not have the effect of reducing the price of the product (and the corollary, increasing the number of people able to buy it will increase the price). They still have just as much product, and letting it go un-bought is a waste. They're going to reduce the effective price by some means or another, in order to clear out that surplus inventory. And if the opposite happens and suddenly more people are able to afford it, they'll raise the price. There is simply no way that they'll keep prices low in the face of increased demand.

[CRASH HARDDRIVE]

Originally Posted by OreoCookie 

Just as a side note: when I left Munich, ~10 % of the first semester students were Chinese, I think. Word has gotten around that you get a very good education for very little money. My parents told me that in the 70s, there were plenty of people from the Middle East (e. g. Persia), and after their return, they kept close ties to Germany, buying German machinery, etc.

Interesting.

I've been talking with my wife lately about this- of course, our son is an infant so we've got a loooooong ways to go before he's really worrying about any of this. She was pleasantly surprised that I felt the same way about the possibility. She's from Europe so it's not a big leap for her. But I'm 1,000 % for it. Maybe he needs to learn German along with the 4 other languages he'll (hopefully/possibly/probably) speak.

[OreoCookie]

Originally Posted by CRASH HARDDRIVE 

I've been talking with my wife lately about this- of course, our son is an infant so we've got a loooooong ways to go before he's really worrying about any of this. She was pleasantly surprised that I felt the same way about the possibility. She's from Europe so it's not a big leap for her. But I'm 1,000 % for it. Maybe he needs to learn German along with the 4 other languages he'll (hopefully/possibly/probably) speak.

I think studying abroad is a great experience. I've spent ~2 years living abroad (10 + 4 months in the US and 10 months in Japan), and I will soon move to Japan once more for another two to three years. Each time I was abroad, I experienced a period of personal growth that was unlike anything I have experienced »at home«. As an American, it's quite easy to get residency in Germany (all you need to prove is that you have enough money to sustain yourself). If your kid also has the citizenship of an EU country, it's even easier.

[OAW]

Originally Posted by Uncle Skeleton 

Come on now, you're a smart person, just look at the edit timestamp on your post and figure out what happened. Then lighten up and enjoy a laugh at your foibles.

Oh no worries my man. I wasn't upset or anything. I just literally didn't know what you were trying to say at first.

But I have looked at the timestamp and I see the joke now. The thing is ... what I was actually doing was trying to create a table to reflect the stats I posted earlier. I'd never done it before so I was just testing out some tags I thought might work (i.e. [tbl], [table], [th], [tr], etc.). Unfortunately, nothing I tried did anything so I just erased it, reformatted the data, and then made my entire post when I had completed that. You must have responded to that "placeholder" post in the meantime. In any event, do you (or anyone else for that matter) know the tags needed to create a table in a post? Or is that simply not supported around here? Just wondering ....

Originally Posted by Uncle Skeleton 

The commission's findings based on the commission's numbers support the commission's business model? Quelle surprise! Are you as trustful of the tables and conclusions that Exxon produces about the causes of climate change, or that the RIAA produces about music sales' impacts from piracy? How about some corroboration from a source that isn't petting the hand that feeds it?

I think your analogy falls short in one key area though. Exxon or the RIAA in your example are producing reports regarding topics in which they have a direct vested interest. So one would be prudent to take the conclusions contained therein with a grain of salt. However, in this instance a GOP-led Congressional Commission doesn't have any direct vested interest in college tuitions going up or down. If the commission were sponsored by a consortium of colleges and universities and it produced a report saying "The Commission has found no conclusive evidence that loans have contributed to rising costs and prices. .... well then I could see your point ... because the consortium would have a direct vested interest in increasing its membership's revenue. But that's simply not the case in this scenario. In fact, since it was a GOP-led Congressional Commission one could argue that they had an indirect vested interest to conclude just the opposite since that would coincide with the conservative talking points regarding the issue.

Originally Posted by Uncle Skeleton 

No one singled out federal student loans (except maybe besson3c when he started this thread?).

But actually someone did just that in his very first post in the thread.

Originally Posted by turtle777

Federal Student loans are THE REASON why college cost has gone up so much, much more than inflation. It's the same as ANYTHING where government provides free money for: COST GO UP !!! (Same will happen with health care cost under Obama Care, unlike what everyone's being told).

"Private" student loans weren't mentioned. Just "Federal". Not "a" reason. Not "one" reason. Oh no ... he was quite explicit in his condemnation when he said "THE REASON". Capitalized for emphasis and everything. And this is the notion that I've been challenging. You have not taken as drastic a position which is why our conversation has unfolded quite differently. Your posts suggest that you think that increased availability of federal student loans is a "contributing factor" (among others) in increased tuition. Which is a much more reasoned and supportable position.

Originally Posted by Uncle Skeleton 

I dispute this. It's just beyond naive to expect that reducing the number of people able to buy a product will not have the effect of reducing the price of the product (and the corollary, increasing the number of people able to buy it will increase the price). They still have just as much product, and letting it go un-bought is a waste. They're going to reduce the effective price by some means or another, in order to clear out that surplus inventory. And if the opposite happens and suddenly more people are able to afford it, they'll raise the price. There is simply no way that they'll keep prices low in the face of increased demand.

But the flaw in your argument is that you are comparing apples to oranges on at least two levels. If we were talking about a capitalistic, for-profit enterprise selling a physical product then your argument about how reducing the number of people able to buy a product would result in lower prices because they wouldn't want inventory to go to waste would have merit. But in this situation we are talking about an educational, non-profit institution selling a service. There simply is no "inventory" to be wasted. Indeed a college or university has to enroll enough students in order to bring in enough revenue to cover its operational costs. But let's face it ... there's no shortage of kids who want to go to college. Not even a little bit. So the point that I was trying to make is that without student loans those seats would still get filled. They'd just get filled only by those families with the means to pay tuition out of pocket. Which in the long-run would only serve to further limit upward mobility and lead to an increasingly stratified society.

OAW

[Uncle Skeleton]

Originally Posted by OAW 

Oh no worries my man. I wasn't upset or anything. I just literally didn't know what you were trying to say at first.

But I have looked at the timestamp and I see the joke now. The thing is ... what I was actually doing was trying to create a table to reflect the stats I posted earlier. I'd never done it before so I was just testing out some tags I thought might work (i.e. [tbl], [table], [th], [tr], etc.). Unfortunately, nothing I tried did anything so I just erased it, reformatted the data, and then made my entire post when I had completed that. You must have responded to that "placeholder" post in the meantime. In any event, do you (or anyone else for that matter) know the tags needed to create a table in a post? Or is that simply not supported around here? Just wondering ....

I'm a little embarrassed to say it, but I checked back quite frequently to see what you were trying to post. It merely said "OAW" for nearly the entire hour before your next post.

It has never occurred to me to post a table, I doubt I've ever seen one. So it's probably not supported. People mostly use whitespace in code tags in order to justify.

If the commission were sponsored by a consortium of colleges and universities and it produced a report saying "The Commission has found no conclusive evidence that loans have contributed to rising costs and prices. .... well then I could see your point ...

Among the members of the commission, I see 6 university president/chancellor/professor/fellows and 3 leaders of consortiums associations or councils of universities or other education, leaving only 2 commission members that are apparently un-conflicted, based solely on their stated titles.

In fact, since it was a GOP-led Congressional Commission

I forgot, the Party and all its members are incorruptible angels, as long as it's not during a time when you're accusing them of something

Would you trust those Exxon chancellors or RIAA senior fellows just because they managed to get "sponsored" by the nominally anti-corporate Dem party?

But actually someone did just that in his very first post in the thread.

"Private" student loans weren't mentioned. Just "Federal". Not "a" reason. Not "one" reason. Oh no ... he was quite explicit in his condemnation when he said "THE REASON". Capitalized for emphasis and everything. And this is the notion that I've been challenging. You have not taken as drastic a position which is why our conversation has unfolded quite differently. Your posts suggest that you think that increased availability of federal student loans is a "contributing factor" (among others) in increased tuition. Which is a much more reasoned and supportable position.

I'm sorry, it slipped my notice (because emphasizing the explicit topic of the thread is not generally noteworthy )

Look, it's all going to be weighted by the dollar amounts. Would you ever expect student loans to eclipse grants, scholarships, and other aid (that you don't have to pay back)? Yes of course you would, why would anyone lend less than they give away? Lending is cheaper than giving, so naturally the barriers are lower. Would you ever expect that loans backed by the black hole of government debt to eclipse private loans that have to be responsibly underwritten? Yes of course you would, how could any private lender ever hope to keep up with the Fed who doesn't care about repayment? It's not at all unreasonable to say that federal student loans are THE problem, because exactly as I stated in my last post, they are the part of the system that is not working correctly. Grants that don't need to be repaid, and loans that do, are working as they should because they still reflect the underlying value of the education they are buying. Federal BS loans that aren't underwritten and aren't worried about whether they pay back, don't reflect this value.

There simply is no "inventory" to be wasted. Indeed a college or university has to enroll enough students in order to bring in enough revenue to cover its operational costs. But let's face it ... there's no shortage of kids who want to go to college. Not even a little bit. So the point that I was trying to make is that without student loans those seats would still get filled. They'd just get filled only by those families with the means to pay tuition out of pocket.

You're letting yourself be blinded by the whole "non profit" angle. If they can bring in more money, they don't send it to shareholders, but they do spend it on more stuff (including the salaries of those chancellors and senior fellows who compose The Commission), and the effect on prices is the same. Increases in demand equate to increases in the premiums they can charge for tuition, which equates to increases in the spending on infrastructure and labor within the college, which equates to more "prestige" of the college compared to its peers. I happen to work at a university, and a few years ago they were freaking out about state budget cuts, and sending mass emails to all staff and students asking for ideas about where to trim the fat, and meanwhile I saw no less than 6 new constructions sites *start* on campus at the same time. There is literally no end to the ways in which they can spend all those non-profit monies, and their appetites for upgrades are no more satiable than the private sector.

Which in the long-run would only serve to further limit upward mobility and lead to an increasingly stratified society.

Or the stigma of lesser colleges or community colleges will fade, just like the stigma of bankruptcy faded after a critical mass of people had one, due to systemic failures in the marketplace, contributed largely by government-backed debt explosion.

[OAW]

Originally Posted by Uncle Skeleton 

It has never occurred to me to post a table, I doubt I've ever seen one. So it's probably not supported. People mostly use whitespace in code tags in order to justify.

Gotcha. Well PM me if you don't mind about the "code" tag. I see the icon next to the "quote" icon ... but I really don't know what it does. Any insight would be greatly appreciated.

Originally Posted by Uncle Skeleton 

Among the members of the commission, I see 6 university president/chancellor/professor/fellows and 3 leaders of consortiums associations or councils of universities or other education, leaving only 2 commission members that are apparently un-conflicted, based solely on their stated titles.

Fair enough. And I must say ... I have absolutely no comeback to that point. A rarity indeed. Kudos!

Originally Posted by Uncle Skeleton 

I'm sorry, it slipped my notice (because emphasizing the explicit topic of the thread is not generally noteworthy )

Well, I'm just saying that position was taken.

Originally Posted by Uncle Skeleton 

You're letting yourself be blinded by the whole "non profit" angle. If they can bring in more money, they don't send it to shareholders, but they do spend it on more stuff (including the salaries of those chancellors and senior fellows who compose The Commission), and the effect on prices is the same. Increases in demand equate to increases in the premiums they can charge for tuition, which equates to increases in the spending on infrastructure and labor within the college, which equates to more "prestige" of the college compared to its peers. I happen to work at a university, and a few years ago they were freaking out about state budget cuts, and sending mass emails to all staff and students asking for ideas about where to trim the fat, and meanwhile I saw no less than 6 new constructions sites *start* on campus at the same time. There is literally no end to the ways in which they can spend all those non-profit monies, and their appetites for upgrades are no more satiable than the private sector.

And that part in bold above is precisely why I say that increases in tuition seem to be on its own trajectory notwithstanding changes in government funding! As the chart I posted above indicates:



My alma mater is no exception. The place has expanded significantly since I graduated with several facilities that didn't even exist when I was attending. But when this occurs at a public institution and there are state budget cuts as you mentioned and the chart indicates, often these costs are simply SHIFTED onto the students in the form of tuition increases. Student loans aren't the issue in that all-too-common scenario. So all I'm saying here is that there are a variety of factors that contribute to the ridiculous increases in tuition. Expanded student loan availability may be a contributing factor. But it certainly isn't the only contributing factor ... if for no other reason than because it isn't the only source of funding for colleges and universities. And we certainly can't dismiss the "because they can" factor as long as we have a dynamic of colleges and universities competing with each other in the "prestige" arena with regard to infrastructure and labor ... while at the same time the college education they offer remains in high demand because the opportunity to make a comfortable salary without one is limited at best.

Case in point. My father worked in the auto industry. Started off as a laborer on the assembly line. Eventually worked his way up to a General Supervisor position reporting directly to the Plant Manager. You simply can't obtain a position like that today without a college degree ... which he did not have. Period. In fact, you can't obtain the two positions below that today without a college degree. Positions that helped to put our family solidly in the middle class. High school kids today are facing the prospect of either getting a college degree and maybe earning a middle class salary (depending upon their major and the health of the job market) ... or being broker than the 10 Commandments. I simply don't see how eliminating federal student loans will result in significantly decreased tuition as long as that fundamental reality is driving demand for a college education.

And in case you don't want to take my word for it, here's what the guy who postulated the "Bennett Hypothesis" back in 1987 has to say about it today:

Originally Posted by William J. Bennett

While increased federal aid does not cause college price inflation, it can be a considerable factor. Many other elements influence tuition prices, such as the rise of alumni donations, the expansions of institutional services and the ever-increasing demand for higher education. Families will go to incredible, and often insane, lengths to get their son or daughter into college, and these institutions know that. Nevertheless, the federal mechanism intended to make college more affordable seems to be having little or no effect.

Stop subsidizing soaring college costs - CNN.com

OAW

[Uncle Skeleton]

Originally Posted by OAW 

Originally Posted by OAW

"Private" student loans weren't mentioned. Just "Federal".... And this is the notion that I've been challenging.

Well, I'm just saying that position was taken.

Well then... what has this got to do with it:

And that part in bold above is precisely why I say that increases in tuition seem to be on its own trajectory notwithstanding changes in government funding! As the chart I posted above indicates:

upload.wikimedia.org/wikipedia/commons/thumb/1/18/College_Tuition_State_Funding.svg/400px-College_Tuition_State_Funding.svg.png

often these costs are simply SHIFTED onto the students' loans in the form of tuition increases. Student loans aren't the issue in that all-too-common scenario.

FTFY

Case in point. My father worked in the auto industry. Started off as a laborer on the assembly line. Eventually worked his way up to a General Supervisor position reporting directly to the Plant Manager. You simply can't obtain a position like that today without a college degree ... which he did not have. Period. In fact, you can't obtain the two positions below that today without a college degree. Positions that helped to put our family solidly in the middle class. High school kids today are facing the prospect of either getting a college degree and maybe earning a middle class salary (depending upon their major and the health of the job market) ... or being broker than the 10 Commandments. I simply don't see how eliminating federal student loans will result in significantly decreased tuition as long as that fundamental reality is driving demand for a college education.

It sounds like you're saying you want everyone to be above average. Everyone should get to go to an elite school, everyone should get an exceptional education, and everyone should use that credential to work their way to the top. A "regular" school isn't good enough. Community college isn't good enough. Being better than average is what they're paying for, that's what tuition buys. It's mathematically impossible to buy everyone a "better than average" credential.

And in case you don't want to take my word for it, here's what the guy who postulated the "Bennett Hypothesis" back in 1987 has to say about it today:

Stop subsidizing soaring college costs - CNN.com

OAW

Hah! Way to make common sense sound like some sort of "mere theory." Isn't that exactly what creationists are doing when they refer to evolution as "darwinism?" Regardless, he seems to be making the same fumble that you have been: treating "aid" and "federal student loans" as interchangeable. When the analysis doesn't hold up for loans, just replace it with "aid" and hope no one notices.

[ebuddy]

Originally Posted by Uncle Skeleton 

The real problem isn't loans/aid per se. Loans that are made using appropriate underwriting are fine. They are a sound investment on the part of the lender, because students are generally a good way to generate actual productivity, which is easily converted back to cash to repay the loan, and everyone wins, the goal of capitalism. The difference between this and government interference is that private loans have natural boundaries, they are limited by the actual value of an education, they maintain the premise of supply and demand. Underwriters won't loan more than an education is actually worth; that's a recipe for not being repaid. Government loans are free to rise without limit, that is the problem. They are immune from the actual value of what they're buying (an education). Any increase in the money supply will naturally increase prices (aka inflation), but what we're talking about here is when the increase in the money supply is arbitrarily large (and growing all the time, in a positive feedback loop with prices), rather than simply a reflection of the value of what it's buying.

^^^ Kaboom!

Several higher education amendments were authored in 1992 including modifications to the Stafford-Loan which lifted the parent income restriction for the government-backed student loans. This literally flooded the college industry with millions in new aid. Government subsidized interest 'til graduation among other things make the loans appear cheap while saddling students with 10s of thousands of dollars in debt at graduation leading to perpetual deferments, a lack-luster education as evidenced by declining US productivity and increased outsourcing, but has lined the pockets of the University and the subsequent exploding staff of administrators to handle the affairs no longer bothering our increasingly idle professors. The unintended consequences of good intention once again. There are so many examples of government interference State and Federal (BTW, kind of slick to post the State-funding) - distorting market conditions that at this point it almost doesn't make sense to argue it.

[ghporter]

Unfortunately, while some overindulged in Stafford loans, the target population for the change in '92 was middle income families who were still supporting college kids though not getting a break on their taxes for that. It didn't work, because the people who needed them most still found Stafford loans hard to get, while it does seem to have encouraged other groups to "put off" paying what they would otherwise have paid out of pocket for their kids' education.

I should also point out that most of the "federal student loans" we're discussing are not actual "federal" loans. They are loans from regular financial institutions that are guaranteed by the federal government. It's been my experience that, in many cases those loans are less attractive than private loans for many reasons, including the qualification processes and the ability to do things like refinance almost seamlessly (with the originator, of course).