Student Loan Forgiveness Is A Good Example of Inflation Caused By Vote Pandering

[Singuy]

Now lets start with a few things we all agree with.

1. College tuition and living expensive are insane
2. Student loans are a major financial barrier to life.

No one can deny any of this. However people in power, in order to garnish votes, are making the problem worse and worse.

The government should focus on REDUCING student loans handout like yesterday. The massive amount of free money handed to 18 year olds just by filling out a form has caused tuition and living expenses to skyrocket because this has created too much demand and not enough supply. Our tax dollars have inflated the cost of higher education to the stratosphere..and to solve this problem the government decides to forgive these loans...which is again inflationary. "Now young folks without the burden of student loans can go and buy the house that they want"...uhhh we already have a dire supply issue with housing therefore the current inflation to house prices...so how will cancelling billions of dollars of debt for the masses help with this situation? Wouldn't it cause houses to be even MORE expensive?

The real answer to the problem will not buy you any votes. "We must cut our student loan problem" will give you 0 votes and will poison your party with hit piece commercials running 24hrs on TV. However this is the ONLY way to deflate the cost of education and the cost of living for students. You will see in real time just how fast tuition will come down if universities are having a hard time filling seats.

My friend who owns 5 houses near a major university charges whatever he feels like because he knows uncle sam will come through for these students.

[QuarterMillionMan]

Agreed 100%.

[disneysteve]

I disagree with your premise, as do many economists and financial analysts. This site is not the place for political debates. So I'll just leave that alone.

You will see in real time just how fast tuition will come down if universities are having a hard time filling seats.

This is actually already occurring at many colleges but it has nothing to do with cost or loans; it's all about demographics. The birth rate has been steadily declining for the past 15-20 years and the impact of that is starting to show up on college campuses. Enrollment is down simply because there are fewer 18-year-olds in existence. Numerous schools have started to cut tuition to try and attract students as the college market competes for fewer and fewer students. The big name schools - Harvard and Yale and Stanford and Penn State and UCLA and such aren't doing it but a lot of smaller lesser known schools are.

Here's just one article on the topic but if you search, you'll find many others. https://hechingerreport.org/colleges...ment-declines/
There was just an article on this in Kiplingers, I think. I read it a couple of weeks ago.

Assuming the birthrate doesn't accelerate, we will likely start to see consolidation in the college market with schools merging or closing entirely. There are simply more seats available than there are students to fill them.

[Singuy]

I disagree with your premise, as do many economists and financial analysts. This site is not the place for political debates. So I'll just leave that alone.



This is actually already occurring at many colleges but it has nothing to do with cost or loans; it's all about demographics. The birth rate has been steadily declining for the past 15-20 years and the impact of that is starting to show up on college campuses. Enrollment is down simply because there are fewer 18-year-olds in existence. Numerous schools have started to cut tuition to try and attract students as the college market competes for fewer and fewer students. The big name schools - Harvard and Yale and Stanford and Penn State and UCLA and such aren't doing it but a lot of smaller lesser known schools are.

Here's just one article on the topic but if you search, you'll find many others. https://hechingerreport.org/colleges...ment-declines/
There was just an article on this in Kiplingers, I think. I read it a couple of weeks ago.

Assuming the birthrate doesn't accelerate, we will likely start to see consolidation in the college market with schools merging or closing entirely. There are simply more seats available than there are students to fill them.

If that was the case, then baby boomer era of the 1960s/70s would have the highest skyrocketing tuition cost as not only were there too many 20 year olds, but schools haven't expanded as much as today so there are way fewer seats.

There was some kind of a push for higher education starting in the 1980s as prior to this tuition was pretty flat. Perhaps it was the great stagflation that caused it, but the ease of obtaining student loans certainly provided mass access which doesn't help with pricing.

[disneysteve]

If that was the case, then baby boomer era of the 1960s/70s would have the highest skyrocketing tuition cost as not only were there too many 20 year olds, but schools haven't expanded as much as today so there are way fewer seats.

There was some kind of a push for higher education starting in the 1980s as prior to this tuition was pretty flat. Perhaps it was the great stagflation that caused it, but the ease of obtaining student loans certainly provided mass access which doesn't help with pricing.

I don't think college attendance rates were nearly as high in the 60s and 70s.

I totally agree that private lenders giving out money like water has led to higher college costs. When a high school kid can go to some big college lender and literally borrow an unlimited amount despite having no means of ever repaying it, that's a problem. And the inability to discharge student loans in bankruptcy means the lenders have minimal risk in handing out those funds. That all needs to change.

[crazyliblady]

I think that students these days are either not aware of the existence of scholarships. At the college where I work, they are changing the advising arrangement to be more comprehensive and to include financial aid advisement (including a wide array of scholarships), course enrollment, and assessment of needs for assistance like tutoring. I really hope it works well, because we really need to be proactive about reducing the costs of college. There is also a movement towards OER (open education resources) to replace costly textbooks.

[ua_guy]

The first mistake is believing it's about pandering for votes when actually it's just the right thing to do. The second mistake is believing there is only one answer when it's actually a logical statement with a lot of AND operators. More than one idea at once.

This should be understood as an investment and not a handout, but, some people can't get over the politics.

[ua_guy]

Numerous schools have started to cut tuition to try and attract students as the college market competes for fewer and fewer students. The big name schools - Harvard and Yale and Stanford and Penn State and UCLA and such aren't doing it but a lot of smaller lesser known schools are.

My Alma Mater is a prime example. Enrollment has declined to a point which put the University's future in question. They have since partnered with local Community Colleges for a Direct Admission program for higher-level degrees and reduced tuition for certain programs. The graduation rate remains very high which means, in part, the University is making a concerted effort to make programs affordable and to retain students who struggle financially. I remember a few students whose families fell on hard times while we were in school together. The University stepped up to keep them in school because it was the right thing to do.

[Fishindude77]

Just one more area of our lives the government should keep their nose out of.
The loans would have not been made, had they not been guaranteed by the feds.

I don't know what the realistic percentage is, but I do believe there are too many kids going into post HS education, just because they've been told it's the thing to do.
Many will find out different when they're paying their HS educated plumber more per hour to repair their toilet than they are earning with their degrees.

[ua_guy]

Pursuing higher education is the right thing to do because K-12 is inadequate here in America. Higher education is always worth something. If we want to be competitive as a country, it starts with GOOD education. America is falling behind.

There is no reason someone in trades shouldn't also have higher education. Trades have some pretty extreme limitations too. Plumbers and electricians only make so much, and once the joints and back start going, it's over. Gotta re-tool and do something else or be left out in the cold eating cat food. I know a lot of guys who are saying at 40 they wished they would have kept more options open. Doing it over at 40 and heading back to school is not for the weak.

[myrdale]

Pursuing higher education is the right thing to do because K-12 is inadequate here in America. Higher education is always worth something. If we want to be competitive as a country, it starts with GOOD education. America is falling behind.

It is a reflection of government run public schools, and the staff and teachers they employee.

I excelled in high school. The content was trivial for me, but it didn't do as much as I wish it had for preparing me for college. In my high school chemistry class, after the curve, I had a 114. My first General Chem I class in college, I ended up with a C. I struggled all the way through Calculus I, II, & III, while I had class mates who blew through it with ease as they had AP classes in high school.

Having tax payer backed loans is an incentive for colleges to continue raising tuition cost. I have no problems with grants, or scholarships, but loans should carry a risk of not being repaid and the college should share in that risk.

I am of the opinion that government loans should be limited to in-state schools only, and there should be some idea of return on investment on the front end. If you want a degree in European Literature, that is great! But they should have statistics that say people with this degree earn $xx,xxx amount upon graduation, and $xx,xxx amount after 5 years, and the $xx,xxx cost is expected to take the average person x years to pay back.

[Fishindude77]

Pursuing higher education is the right thing to do because K-12 is inadequate here in America.

If we're talking big picture changes, wouldn't it make a lot more sense to get grades K-12 straightened out first so that anyone with a high school diploma can actually read, write, perform mathematics, etc. at a reasonable level.
Do they even flunk or hold back kids whom aren't cutting it anymore, or just push them all through the system?

[ua_guy]

Whatabout whatabout.

That takes taxpayer dollars, are you ready to spend more?

Yeah they do flunk and hold kids back. But it's needlessly punitive and can be socially devastating. Special education programs to bring those kids along are much more effective and frees up a seat for another kid entering the grade. A lot of it depends on volunteers even if districts which have good funding. Guess what? They're always looking for people to help and they can never seem to find enough.

[Singuy]

The first mistake is believing it's about pandering for votes when actually it's just the right thing to do. The second mistake is believing there is only one answer when it's actually a logical statement with a lot of AND operators. More than one idea at once.

This should be understood as an investment and not a handout, but, some people can't get over the politics.

So much tax payer dollars are being wasted and our kids are not any more competitive. It's the environment of going from the entire faculty watching their students like a hawk to...do whatever you want because you are paying. Too many students get lost in college and just end up wasting their time and entire financial future.

I am perfectly fine with government funded mandatory 4 years post HS, and then people can pay for private or higher education if they want. OR the government must put many stipulations on getting student loans. Treat it like a scholarship in which you must meet minimum GPA requirements/social work requirements. There should be a pool of money per major, meaning if all the liberal arts loans are gone, you better pick something else to get some of that loan money.

This help push students who are willing to sacrifice and are hard working into universities and weed out those who probably couldn't finish anyways. Something needs to be done because freely handing money to these multi billion dollar corporations like Stanford and Princeston while kids end up a loan they have to pay for 10+ years is not the solution.

[ua_guy]

So much tax payer dollars are being wasted and our kids are not any more competitive. It's the environment of going from the entire faculty watching their students like a hawk to...do whatever you want because you are paying. Too many students get lost in college and just end up wasting their time and entire financial future.

I am perfectly fine with government funded mandatory 4 years post HS, and then people can pay for private or higher education if they want. OR the government must put many stipulations on getting student loans. Treat it like a scholarship in which you must meet minimum GPA requirements/social work requirements. There should be a pool of money per major, meaning if all the liberal arts loans are gone, you better pick something else to get some of that loan money.

This help push students who are willing to sacrifice and are hard working into universities and weed out those who probably couldn't finish anyways. Something needs to be done because freely handing money to these multi billion dollar corporations like Stanford and Princeston while kids end up a loan they have to pay for 10+ years is not the solution.

Wrong. Most kids who attend a 4 year school graduate college and an overwhelming majority of kids repay their loans. 17% of Americans have outstanding student loans and only about 7% of student loans go completely unpaid. Try again.

The people with the highest student load debt are Oral Surgeons and not Liberal Arts majors like you would probably enjoy believing. The average student loan balance is $37k, less than the average price of a new vehicle. Not exactly "wasting their entire financial future".