Economics of Student Loans

I am fascinated by the rising cost of secondary education, how it seems to be spiraling out of control, how students can no longer afford to take out students loans, and how nobody in a position to care seems to do so.  Student indebtedness is hindering our economy and the notion that certain companies are making huge amounts of money on student loan interest is a shame. 

Now I understand the racket so much more.

As long as government is willing to “help out” with student loans, universities and colleges will keep raising prices, and the total cost of an education will keep soaring until one day it blows sky high, just as happened with mortgages.

Note that the loans are guaranteed by the government. Also note that student loans are not discharged in bankruptcy. Those two facts are all you need to understand why the financial industry as a whole consistently champions the promise of postsecondary education and its value to American society. No one really gives a damn about the students. Worse yet, were funding cut off, there would be student outrage over it when stopping funding is exactly what is needed to bring costs down.

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