Government (taxpayers) underwrite unlimited amounts to uninformed buyers paying informed sellers.
I am a seller (college boss), and I can boost my own income, and I know I have no competitive pressure to keep prices down, so why not increase the college budget and spending, hence justifying tuition increases.
Common sense is often wrong. I haven't found any reliable source yet that even mentions the availability government loans as being a driving factor. Based on the limited research I've done over the last few minutes, the main drivers appear to be:
1. A large increase in demand for College. I could imagine this may be, in part, due to more accessible student loans. But it appears that many factors have come into play, and the main one is the perception that you cannot get a liveable wage in this country without a college degree.
2. Less funding from state governments
3. Increased spending in administration and student services unrelated to education.
In 1 you're talking about a self-reinforcing effect. "I have to put on makeup to look pretty because everyone puts on makeup to look pretty". When everyone believes it, it becomes true.
Common sense is horseshit. You know what was common sense in the 1600s? A gentleman is clean, so he doesn't need to wash his hands between cutting open a corpse and delivering a baby, and oh gee why do so many women get awful infections after childbirth?
Common sense is the rallying cry of people who cannot backup their claim by other means.
Because it is not 'free'.
It puts students in debt.
You are boosting your income by exploiting students through usury.
Lets say there is no government, then where was the 'competitive' pressure? How does government loans take away competition? Did they close schools to eliminate the competition?
Good faith reading is that he means its risk free to the school, because they get paid up front even if the student doesn't graduate, much less earn enough to pay back his loan.
Government (taxpayers) underwrite unlimited amounts to uninformed buyers paying informed sellers.
I am a seller (college boss), and I can boost my own income, and I know I have no competitive pressure to keep prices down, so why not increase the college budget and spending, hence justifying tuition increases.