Does anyone else think that the student loan industry is creating inflation in and around universities? I mean the cost of tuition and books is outpacing inflation. The property markets around those schools remain red hot all the time. I can't help but think that part of the problem here is that 19 and 20 year old kids are able to put their hand on 15-20K in the form of student loans and start outbidding each other for housing, etc.
To me it seems likely that something like the sub prime meltdown could cause the mass EEE.
I've had the same thought. As long as the government keeps expanding the availability of easy and nearly-free credit for education, why wouldn't schools increase the price? Schools are basically competing with each via facilities, dorms, programs, and faculty, rather than cost. Until the total cost of college reaches the earning potential boost it gives you, that inflation seems pretty likely to continue.
Not only that but there is an entire student loan industry ( that Obama wants to get rid of) that has a vested interest in expanding the amount of student debt.
It becomes so easy for a student to justify taking on extra debt to keep from working at a minimum wage job. Year after year the cycle continues but at some point you have to ask is the debt worth the benefit. It seems that for liberal arts majors with advanced degrees it is becoming less justifiable from a cost benefit point of view.
Maybe the bubble will pop when business, engineering, and law degrees aren't able to make back the money spent on the degree.
Comments
Does anyone else think that the student loan industry is creating inflation in and around universities? I mean the cost of tuition and books is outpacing inflation. The property markets around those schools remain red hot all the time. I can't help but think that part of the problem here is that 19 and 20 year old kids are able to put their hand on 15-20K in the form of student loans and start outbidding each other for housing, etc.
To me it seems likely that something like the sub prime meltdown could cause the mass EEE.
I've had the same thought. As long as the government keeps expanding the availability of easy and nearly-free credit for education, why wouldn't schools increase the price? Schools are basically competing with each via facilities, dorms, programs, and faculty, rather than cost. Until the total cost of college reaches the earning potential boost it gives you, that inflation seems pretty likely to continue.
Not only that but there is an entire student loan industry ( that Obama wants to get rid of) that has a vested interest in expanding the amount of student debt.
It becomes so easy for a student to justify taking on extra debt to keep from working at a minimum wage job. Year after year the cycle continues but at some point you have to ask is the debt worth the benefit. It seems that for liberal arts majors with advanced degrees it is becoming less justifiable from a cost benefit point of view.
Maybe the bubble will pop when business, engineering, and law degrees aren't able to make back the money spent on the degree.