As conservative as I am, I will be the first to admit that this country is better off with more college educated people than with less. Further, the cost of a college education isn't that onerous. My in-laws have seven kids with degrees, including two surgeons (one who attended Johns Hopkins,) and they didn't give any of their kids a dime for college.
http://www.cougarboard.com/noframes/...tml?id=5396929
http://www.cougarboard.com/noframes/...tml?id=5396929
Ever wonder why the cost of tuition has increased far more than inflation over the past 30 years? Or why it continues to increase? Given that innovation tends to make goods and services cheaper, this doesn't make sense, and whenever costs increase as much as tuition has, there's usually a reason: it's being subsidized by the government. That's what's happened with tuition, too.
As explained in the below post, the federal government guarantees student loans. This incentivizes lenders to lend who otherwise would not. Lenders don't worry about whether lending to students is a good investment, and they don't charge an interest rate that accurately reflects the speculative nature of the investment, which might otherwise drive kids away.
This practice allows tuition to increase, because much more money is available. If colleges actually had to depend for their existence on kids and families being able to pay out of pocket, costs could NEVER have risen as they have. But if kids can just borrow the money they need, then no worry. Just charge more, and tell them to borrow it.
You could not get a better example of a program that is well-intentioned, but based on economic ignorance, and therefore harmful. What we wanted was college for everyone. What we've gotten is a permanent class of indentured servants. Colleges make a ton of money, and pass the cost directly on to the student, who leaves college with a diluted degree (often influencing him to spend even more time in school and incur even more debt), and thousands of dollars of student debt, which gives him no real option other than to work for wages. This limits his mobility and creativity, so it works as a drain on entrepreneurship as well.
The worst part is that we would have had college education for everyone anyway (or at least anyone who really wanted it). Schools could run on half their budgets and educate our kids/lawyers/dentists/businessmen as well as they do now, except that they'd actually be competing on price, and therefore doing it much more efficiently.
As explained in the below post, the federal government guarantees student loans. This incentivizes lenders to lend who otherwise would not. Lenders don't worry about whether lending to students is a good investment, and they don't charge an interest rate that accurately reflects the speculative nature of the investment, which might otherwise drive kids away.
This practice allows tuition to increase, because much more money is available. If colleges actually had to depend for their existence on kids and families being able to pay out of pocket, costs could NEVER have risen as they have. But if kids can just borrow the money they need, then no worry. Just charge more, and tell them to borrow it.
You could not get a better example of a program that is well-intentioned, but based on economic ignorance, and therefore harmful. What we wanted was college for everyone. What we've gotten is a permanent class of indentured servants. Colleges make a ton of money, and pass the cost directly on to the student, who leaves college with a diluted degree (often influencing him to spend even more time in school and incur even more debt), and thousands of dollars of student debt, which gives him no real option other than to work for wages. This limits his mobility and creativity, so it works as a drain on entrepreneurship as well.
The worst part is that we would have had college education for everyone anyway (or at least anyone who really wanted it). Schools could run on half their budgets and educate our kids/lawyers/dentists/businessmen as well as they do now, except that they'd actually be competing on price, and therefore doing it much more efficiently.

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