I Came of Age During the 2008 Financial Crisis. I’m Still Angry About It.

[Cigarbutt]

In a "no gov't backed student loans" scenario, the market would offer loans to some occupations, and the cost of education would likely decline as institutions are no longer able to fund professors who don't want to teach with student funds. I think it'd probably increase the efficiency of the economy, because you'd get more people taking actually useful degrees and people who end up in jobs that don't really need one wouldn't take one.

 

No need to answer 'cause politics is heavy today and I mostly agree here but food for thought:

What is meant by "useful"?

Who would define "usefulness"?

[rb]

Those loans are not entirely not government backed. You can't discharge them in bankruptcy. That's a pretty big thing.

[bizaro86]

"Useful" in the context I'm using it means "statistically likely to result in income sufficient to repay the loan used to acquire it."

 

I think it's quite likely the market would be able to figure that out.

[SharperDingaan]

You would just get a smaller student population, and higher tuition cost.

The fixed costs of running the university/college just divide over a smaller base, and it costs more to go to school. 

 

Our own thoughts are that the problem really isn't access to loans, it's the immaturity of students/parents at the time they are making these decisions. Hence, the practical solution may be to simply tie the loans to being older than 'X'.

 

You're still free to make poor choices (freedom), but at least you'll do it with some 'real world' experience under your belt.

ie: you've learnt the value of a buck.

 

SD

 

 

[TwoCitiesCapital]

Debt is inflationary at the start and deflationary at the end. What we've witnessed is the inflationary part as the education system absorbed tons of debt.

 

Same as with housing in 2004-2006.

 

It's not technically "debt" in the health system, but insurance works the same way. Provides monetary inflow into the system at a greater rate than would otherwise exist at that point in time. Inflationary at the front end, deflationary at the back end when society has to pay off the burden that has accumulated.

[wachtwoord]

You would just get a smaller student population,

 

Can we have that now pretty please? These days it seems every retard and his brother attend university and the levels of he university have dropped at a frightening degree. On top of that many universities are highly politically biased and the "challenge everything" attitude has made a 180.

 

This is all caused by a too large student population. On the one hand people with too low a base intelligence (no critical thinking) and on the other the universities can't handle the larger student population, degrading the level of the studies.

 

A secondary benefit would be that the drop outs would go into trade schools. And that's exactly of which supply is lacking now. So students would be happier, learning a (useful!) skill at their level of thinking with almost guaranteed job security and society would benefit greatly too.

 

All for the small price of governments minding their own damn business (w/e that is) and letting the free market do its thing.

[rukawa]

I suspect he means (and if so I agree) that the cost of tuition would come way down in the absence of government intervention in student loans.

 

Yes that is exactly what I mean.

 

You would just get a smaller student population, and higher tuition cost.

The fixed costs of running the university/college just divide over a smaller base, and it costs more to go to school. 

 

Well we can test that assumption by looking at a time when student loans and student populations were far smaller. In 1930 the tuition at Penn was 400 for School of Engineering and Applied Science.

https://www.archives.upenn.edu/histy/features/tuition/1930.html

 

With inflation that translates to:

$6,039.43

 

Current cost of Engineering at Penn is: $45,556

https://www.archives.upenn.edu/histy/features/tuition/2010.html

 

This does not even account for the fact that Penn now in addition to its massive tuition receives huge amounts of government funding and has a $18 billion dollar endowment whereas in the past it didn't.

 

Markets function very very differently when the are huge affordability problems and things are considered very expensive by most people. The tendency is usually first towards "no frills" cheap options and reducing costs as much as possible e.g. Model A by Ford or budget airlines. An extreme example of this, in education, is India where low cost private education dominates:

https://www.nytimes.com/2011/12/31/world/asia/for-indias-poor-private-schools-help-fill-a-growing-demand.html

 

We never see this in markets financed primarily by insurance or credit.

[SharperDingaan]

You would just get a smaller student population,

 

Can we have that now pretty please? These days it seems every retard and his brother attend university and the levels of he university have dropped at a frightening degree. On top of that many universities are highly politically biased and the "challenge everything" attitude has made a 180.

 

This is all caused by a too large student population. On the one hand people with too low a base intelligence (no critical thinking) and on the other the universities can't handle the larger student population, degrading the level of the studies.

 

A secondary benefit would be that the drop outs would go into trade schools. And that's exactly of which supply is lacking now. So students would be happier, learning a (useful!) skill at their level of thinking with almost guaranteed job security and society would benefit greatly too.

 

All for the small price of governments minding their own damn business (w/e that is) and letting the free market do its thing.

 

If a student has to be 21+ (vs 18) in order to get a student loan, the simple 2-3 years of post high school work experience (more maturity) should go some way to curing this. Mom/dad are no longer as influential (opting for status vs practice), and if the student is now paying most of the bill - there are going to be more rational choices.

 

Same number, or possibly fewer students - but a higher proportion in subjects/trades with more application.

The market at work.

 

SD

 

[wachtwoord]

This sounds like an improvement already (and more likely to be politically attainable).

 

Of course I always prefer the government withdrawing completely.