Abolish College Loan Programs!

Discussion in 'Education' started by PoliticalChic, Jun 27, 2012.

  1. PoliticalChic
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    PoliticalChic Diamond Member

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    1. FEDERAL STUDENT financial assistance programs are among the worst of many bad federal programs, for a number of reasons. Foremost, why supplant private capital markets…. if they can lend to college students on credit cards and make car loans to college students in large numbers—which they do—there is no reason why they can’t also make student educational loans.

    2. The growth of theses programs has been enormous: The Pell Grant program did much more than double in size between 2007 and 2010. Although it was designed to help poor people, it is now becoming a middle class entitlement. Student loans have been growing eight to ten percent a year for at least two decades, and, as is well publicized, now aggregate to one trillion dollars of debt outstanding—roughly $25,000 on average for the 40,000,000 holders of the debt. Astoundingly, student loan debt now exceeds credit card debt.

    a. The median age of those with loan obligations today is around 33, and approximately 40 percent of the debt is held by people 40 years of age or older.



    3. Student loan interest rates are not set by the forces of supply and demand, but by the political process. Since student loan interest rates are always set at below-market rates, too much money is borrowed for college. Currently those interest rates are extremely low, with a key rate of 3.4 percent—which, after adjusting for inflation, is approximately zero. Moreover, both the president and Governor Romney say they want to continue that low interest rate after July 1. Politicians!

    4. In the real world, interest rates vary with the prospects that the borrower will repay the loan. In the surreal world of student loans, the brilliant student completing an electrical engineering degree at M.I.T. pays the same interest rate as the student majoring in ethnic studies at a state university who has a GPA below 2.0. The former student will almost certainly graduate and get a job paying $50,000 a year or more, whereas the odds are high the latter student will fail to graduate and will be lucky to make $30,000 a year.


    5. Perhaps most importantly, federal student grant and loan programs have contributed to the tuition price explosion. When third parties pay a large part of the bill, at least temporarily, the customer’s demand for the service rises and he is not as sensitive to price as he would be if he were paying himself. Colleges and universities take advantage of that and raise their prices to capture the funds that ostensibly are designed to help students. This is what happened previously in health care, and is what is currently happening in higher education.




    6. The federal government now has a monopoly in providing student loans. Until recently, at least it farmed out the servicing of loans to a variety of private financial service firms, adding an element of competition in terms of quality of service, if not price. But the Obama administration, with its strong hostility to private enterprise, moved to establish a complete monopoly.


    7. As federal programs have increased the number of students who enroll in college, the number of new college graduates now far exceeds the number of new managerial, technical and professional jobs—positions that college graduates have traditionally taken. A survey by Northeastern University estimates that 54 percent of recent college graduates are underemployed or unemployed. Thus we currently have 107,000 janitors and 16,000 parking lot attendants with bachelor’s degrees, not to mention bartenders, hair dressers, mail carriers, and so on. And many of those in these limited-income occupations are struggling to pay off student loan obligations.

    a. More and more kids are going to college who lack the cognitive skills, the discipline, the academic preparation, or the ambition to succeed academically. As a result, many students either do not graduate or fail to graduate on time. I have estimated that only 40 percent or less of Pell Grant recipients get degrees within six years—an extremely high dropout or failure rate.




    8. In the 1950s and 1960s, before these programs were large, American higher education enjoyed a Golden Age. Enrollments were rising, lower-income student access was growing, and American leadership in higher education was becoming well established. In other words, the system flourished without these programs. Subsequently, massive growth in federal spending and involvement in higher education has proved counterproductive.
    Hillsdale College - Imprimis Issue
     
  2. Truthmatters
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    You say people are not good so why would we want them educated at all
     
  3. PoliticalChic
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    PoliticalChic Diamond Member

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    And in your post is the echo of Vedder's criticism of individuals not having critical thinking skills.


    Since you missed it, let me reprise my response to your very same post yesterday:


    Oh, my poor sad friend....

    ...I know you pretend that I said that.

    But you know that what I, and James Madison said, is that humans are not angels.

    ....so, you believe that everyone is good?


    1. Dennis Prager: “There are mature and immature people all across the political spectrum. But Leftist positions are unusually childlike – because Left-wing positions are nearly all based on identifying one’s wishes with reality. ..The Left would like to believe that people are basically good. Therefore the Left declares people to be basically good…..The Left would like to believe that all countries, cultures, and individuals want the same things-a peaceful, tolerant, open, free society. Therefore, they believe it. Dennis Prager’s “Still the Best Hope” reviews the Evils of the Hysterical American Left « MN Prager Discussion Group

    2. So, with the question of human nature being good, answered in the affirmative, the Left is free to confront, not evil, but, it is free to be preoccupied with combatting something else: material inequality. With said child-like “Barney Loves You” view of the world, one need not confront the reality that human nature is such that people are perfectly capable of being ‘Nazis.”


    3. In the United States, which of the following groups have escaped discrimination of one kind or another: the Irish, Italians, Jews, Puerto Ricans, Poles, Hungarians, Chinese, Japanese, blacks….Right: none. See Glazer and Moynihan, “Beyond The Melting Pot.”

    4. In England: West Indians, Pakistanis, Indians. See Hepple, “Race, Jobs, and the Law in Britain,” p. 20.

    5. How about conflict between people of identical racial stock, but different ethnic and religious groups?
    Irish Catholics, and Irish Protestants; Igbos vs. Hausa in Nigeria; Tutsis vs. Hutus in Burundi; and Kikuyus vs. Luos in Kenya.

    6. Then there are Muslims vs. Christians in Lebanon; in Belgium there are Flemings vs Walloons; Sri Lanka- Singhalese vs. Tamils; Israel- Palestinians vs. Jews; Canada- English-speaking vs. French-speaking populations.

    7. In some countries of Southeast Asia, the Chinese minority populations suffers a most-despised minority, often resulting in massacres or deportations



    So, Ms. Truthie, in the face of the above, your position is, in the sense of pathos, ...

    ...laughable.


    Wise up.
    Grow up.
    __________________
     
  4. Truthmatters
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    Fuck you PC you lap up this bullshit from con land without even knowing what most of its really says.

    You dont think anything through you just regurgitate.


    anyone who would post the people are basically not good offered by some asshole who claims to be one of the good ones so he can reason why we shoud not be kind to each other is a complete asshole.

    thats you
     
    Last edited: Jun 27, 2012
  5. PoliticalChic
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    PoliticalChic Diamond Member

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    Oh, wow!


    Judging by your response, I must have hit a HOMERUN!!!

    Look at the language!

    Look how I got you to pretend that you didn't understand my position on human nature!!

    Look how you couldn't defend the silly idea that 'all people are good'!!!

    Tell me...was the one that really, really got you was the charge that Leftists are child-like in their beliefs, and say whatever they want to be reality....
    ....was that the one?

    I need to know, so I can say it again.


    Now, you have a good day....

    ...and write soon!
     
  6. WinterBorn
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    WinterBorn Gold Member

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    The actual percentage of student loans in default is fairly low, considering the economy.

    I look at student loans as an investment in the quality of life in the US. The better educated our population is, the better we as a nation will be.
     
  7. Katzndogz
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    Katzndogz Diamond Member

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    You are absolutely correct.
     
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  8. PoliticalChic
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    PoliticalChic Diamond Member

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    Total nonsense.

    It would refine your perspective to read Vedder's piece at Hillsdale, linked in the OP.
     
  9. old navy
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    old navy <<< Action Figures

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    Free and easy government money has caused the schools to increase tuition to incredible levels. The Obama economy has people going to school with this money. High unemployment in the 18-25 demographic has made it easier to make that choice. Unfortunately, many are taking college classes who never would have and will never make enough money to pay back the loans. Many grants are lost forever.
     
  10. PoliticalChic
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    PoliticalChic Diamond Member

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    Exactly....and covered in Vedder's piece.


    When I read the essay, I was surprised to learn that there are 40 million who have this college loan debt.

    Interesting that that is the exact fabrication made up to make folks think that healthcare was a crisis: 40 million uninsured.

    Not true, of course....but here are an actual 40 million with the problem and the Left is perfectly happy to throw gasoline on the fire.


    Sadly, Vedder says that Romney is ready to go along with it....
     

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