[7Figures2Commas]

> Then people will stop lending students tens or hundreds of thousands of dollars...

Let's make your comment a little more accurate:

Then the federal government, which is responsible for ~85% of the student loan market, will have to stop lending students tens or hundreds of thousands of dollars, and there will be no end to the cries that millions of young Americans are being denied a college education by well-to-do politicians who are out-of-touch with the economic realities of the average American.

[danielweber]

Maybe for a year. After that schools will lower costs and everyone will be better off. Well, except for the school administrators and the construction people who build new stuff for them.

You don't make society's huge education bills go away just because the government is paying for them.

[7Figures2Commas]

I think you're misreading my point, as I don't disagree at all. This problem is a government-created one, and it's bound to end badly, but it's important to be clear about who is doing the lending (it's not random "people") and what the "victims" of this system will complain about next.

We're in a lose-lose situation here. If student loans are plentiful, tuition costs rise and the debt must be secured by laws preventing discharge in bankruptcy, which leads to complaints about the cost of an education and debt levels. If student loans become less plentiful, the complaints will shift to focus on lack of access to education. Even if costs decrease substantially from today's levels, there is sadly a sizable market of would-be students who simply don't have the funds to go to college. Telling them they can't go to college and major in [insert wacky subject here] is political suicide for politicians.

[freyr]

> there will be no end to the cries that millions of young Americans are being denied a college education by well-to-do politicians who are out-of-touch with the economic realities of the average American.

I'm not convinced it would happen as you say, since the crippling burden of college loan debt described in this article is increasingly familiar to many Americans. Once it begins affecting us personally, it becomes significantly harder to sweep these things under the rug.

No doubt, they would try their best, perhaps suggesting that reduced loans will result in higher taxes for average Americans and will shift the financial burden onto the older generations. That would be much easier (and more desirable, to special interests) than attempting to tackle the underlying issues that have resulted in hyperinflated tuition costs.

If only there were a way to broadcast the views of an intelligent, non-partison, and informed demographic to the average American household. Though I'm not sure anybody would tune in, as people find Fox News' fear-mongering and political divisiveness so entertaining.

[wmf]

Fortunately, a more nuanced solution is possible. Want a STEM degree from an efficient school? Sign here for the loan. Want a degree in culture studies? No loan for you.

[ahomescu1]

What's the lender's incentive to do that? Their goal is to extract as much profit as possible from the borrower (even when we're talking about the government as lender).

[wmf]

I would say morality, but I realize that's an invalid argument. It seems like the government shouldn't be allowed to profit from issuing student loans (especially bad ones).

[danielweber]

That's better, but what you will end up with is colleges pricing their "good" degrees higher and higher until they have captured almost all of the wage surplus that workers get from going to college.

[dnautics]

Then people will stop getting that degree, and the competitive salary for that degree will get higher.

[danielweber]

If the NPV of the wage premium of becoming a botanist is $400K, colleges will charge $360K.

What, don't you want to become a botanist???