[throwaway189262]

A large part of why education is so expensive is massive state level cuts to public colleges. Some states have cut their budget by 2/3 even though the number of students has gone up 3x since the 70's.

The truth is, for state schools, the government largely funded our parents education. Now most of that money has been taken away and replaced with un-dischargable loans. I see it as a grift of the old generations on the young. If you look at it that way, the government should definitely discharge a large fraction of the cost

[triceratops]

Couldn't it be both less government funding + more government guaranteed loans?

[throwaway189262]

It's both. There was an education funding crisis because of declining funding and increased enrollment. This led directly to predatory non dischargeable loans.

I'm utterly convinced it's all the aftermath of our extremely large boomer generation that began voting against education funding as soon as they graduated. For decades state schools were mostly funded by the government as they are in most other countries. Dependence on loans is new and pretty unique to the US. I really see it as the old stealing from the young in this case.

[treeman79]

College is expansive because loans are super easy, and are guaranteed.

Basically zero risk for colleges.

[throwaway189262]

Sources? There's a ton of research showing that state funding for colleges has declined significantly as enrollment has increased, accounting for a large fraction of tuition increase.

I have trouble explaining this to my parents enough though it's clearly true. They don't like the reality that their votes to "cut taxes" for 30 years has doomed their own children to a decade of debt and not being able to afford a house.

[MeinBlutIstBlau]

This is purely speculative but from this source of data showing the amount of people in college now as opposed to pre-guaranteed loan days, I'd agree.

http://www.newstrategist.com/wp-content/uploads/2017/01/BB8....

When you give the masses an easy way to go to school and colleges (which are basically educational guilds nowadays) started upping the costs immensely. Colleges knew the writing was on the wall now that students didn't just need to save money and work using solely their own capital. They could get it by the government. The only one who truly bore the risk was the government backed borrowers.

[throwaway189262]

These effects are all intertwined. It used to be easy to go to college because it was cheap. It was cheap largely (not entirely) because it was government funded. As more people caught on to how great a deal it was, funding simultaneously dropped while enrollment exploded.

The cost crises led to our crazy loan system.

All speculative, but individual pieces of evidence I've found point to this being likely

[MeinBlutIstBlau]

That is actually an interesting way to put it though. I'm curious though if the number of public colleges we have today existed to the extent in which they do because of the loans or because of the government funding.

Also, in a way of looking at it, the loans are essentially pre-emptive taxation. So theoretically the people who we're going to fund these things are taxed directly instead of everybody, even those who don't go to college and get the benefit from it.

[treeman79]

I argue it was cheaper because colleges were more efficient.

Easy money leads to bloat.

100-200k a year is not a sane cost for most degrees.

Shifting who pays it hides the problem and makes it worse.

[chrisabrams]

Banks are guaranteed payment on the student loans they issue (yes there are exceptions but that’s not the norm). The norm is that either the student pays back the loan, or, the government pays back the loan. That’s why banks have decided to loan out 200k plus loans to 18 year olds. State schools or private schools, it doesn’t matter. If the customer is willing to pay more money for the same product (because loan sizes from banks keep growing), then there is an opportunity to raise prices. Sure costs have gone up for schools over the years, so have expectations for what schools provide (more amenities, more staff, more sports programs, etc). That’s only a fraction of the reason for hire school prices.

If you capped how much banks could loan on guarantee, you’d see prices for schools drop pretty sharp. Mark Cuban has talked about this a bunch over the years.

[throwaway189262]

I think this is a symptom of the problem. Schools needed a new revenue source when states cut funding and college enrollment skyrocketed. They turned to government loans to avoid raising taxes.

I'm not a history buff but this is how I interpret us reaching out current situation. Undischargeable loans is debt slavery and should be abolished. The very purpose of bankruptcy is to prevent situations like this.

The realistic outcomes are either government bailing itself out on discharged loans (after all, the school has already been paid). Or, probably a better decision, increasing state school funding to the dollars per student that existed in decades prior. Option 2 would be extremely difficult politically until mellenials overtake baby boomers as the dominant voting bloc in a decade or two

[eli_gottlieb]

This is true, and shouldn't have been down-modded.