So you're saying if we didn't have government guarantees on student loans or any other form of government subsidy, banks would just give 20somethings who want art degrees $200,000 completely unsecured?
> banks would just give 20somethings who want art degrees $200,000 completely unsecured?
Of course they wouldn't. That's the idea though. Back-pressure. The idea is that it would then become unrealistic for institutions to try and charge 200k for an arts degree which no one can afford, even with loans. This should lead to lower tuition.
Bear in mind that that what any institution wants to charge is the absolute maximum the student can borrow, plus any government subsidies or fees they can extract.
Of course they wouldn't. That's the idea though. Back-pressure. The idea is that it would then become unrealistic for institutions to try and charge 200k for an arts degree which no one can afford, even with loans. This should lead to lower tuition.
Bear in mind that that what any institution wants to charge is the absolute maximum the student can borrow, plus any government subsidies or fees they can extract.