from The Gray Area:
3/17/22:
There is no question our student loan program is broken. It is a failure by design.
The government took over student loans in 2010 to help fund Obamacare. Prior to that, government loans were an option and only 20% chose that option. Afterward 100% took government loans. This was followed by political cries for loan forgiveness consistent with the socialist view of society.
This is the design problem.
- The system was set up for students to get as much money as they needed or wanted for a college education. Irresponsible borrowing like this creates many problems.
- Repayment of irresponsible loans creates problems that political activists can pounce on as unfair.
- Price increases by colleges naturally follows the government take over of student loans as colleges know the market does not react to their price increases, the government loan program just pays them. Political activist jump on this weakness calling for more government control of college pricing, another socialist dream.
- Then, when any issue that develops can be tied to the college or its trustees, the government will sue them, collectively and individually. This sets up through coercion complete government control of education.
- With all the above comes curriculum control.
- Like Obamacare, set to fail for eventual evolution into single payer (government) program, this program was set up to fail so that a government take over and free college for everyone, paid for by everyone thru higher taxes, could happen.
Below you will be introduced to a recommended solution to this problem from the Texas Public Policy Foundation which makes sense. The solution has 4 parts.
1. Student loans should have income contingent repayment
2. Student loans should have no loan guarantees for lenders or interest rate subsidies or loan forgiveness for students
3.Student loans should have annual and aggregate caps
4. Student loans should exploit continuous competition among private lenders.
In addition to these program changes, responsible buyer decisions should be recognized as critical. The basic tenet of 'Let the buyer beware' should apply to college loans as it does to every other individual purchase.
from TPPF,
3/15/22:
What to Know: Our student loan system is broken.
The TPPF Take: We can make our student loan system more fair and transparent.
“I borrowed over $30,000 for college, and after many years of repayment, I am now officially (student loan) debt-free,”
says TPPF’s Andrew Gillen. “With any luck, by the time my kids are taking out student loans, we will have designed a better system.”
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