WASHINGTON – President Barack Obama on Friday renewed his call for the government to stop backing private loans to college students and replace them with direct financial aid to young people.
Obama said the surest test for success in the challenging economy is a college degree or other training, yet access to higher education continues to shrink as costs rise. To reverse that, the president repeated his campaign proposal that would eliminate the Federal Family Education Loan program that costs taxpayers $15 million a day.
Friday, April 24, 2009
College Loans
I don't know if this is a good idea or not, but here's the information:
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5 comments:
One reason college costs have increased at such a rapid rate, relative to inflation, is because the feds stuck their noses into the marketplace and started subsidizing student loans. Colleges, knowing full well that many students pay with borrowed money, responded predictably... by making arrangements to capture as much of that money as possible.
I've always thought it would be a good business practice in the long run for college to be free. Well, state colleges anyway. College grads make much more over a lifetime and would more than pay it back in income taxes.
No doubt someone will tell me what's wrong with this thought.
Richard
For one, you couldn't guarantee that the college grads would stay in the state that gave them the free education--so their tax money would go elsewhere.
Also, when something is "free" you have to deal with the "tragedy of the commons".
But it's an intriguing idea. Could it be made workable?
It's not just tuition, it's also the fees that are tacked onto the per hour payments. Many of these support programs that students will never access. Some of these programs are more monuments to the egos of department heads than educational necessity. "Free" college in Europe has created a generation of people who stay in school for years to enjoy the aura of the academic world. I admit, under a free system, I might be still in school. But if you offer education to everyone regardless of their abilities and don't somehow limit access to those who are cluttering the system rather than doing actual learning, it becomes a social catch-all for those who want to appear to be working while not really doing anything.
College tuition is bubbling for the same reason housing bubbled. You throw cheap credit at something, and the price explodes. The relationship is as certain as gravity.
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