Rising tuition trumps interest rate among students’ worries
Sometimes, it’s the “principal” of the thing. Particularly when “the thing” is a loan.
As lots of homeowners learned, borrowing too much money can lead to trouble even if interest rates are relatively low. If college students are wise, they’ll realize the current debate about the interest rate for their loans is a sideshow compared to rising prices.
President Barack Obama visited college students last week to argue for keeping the interest rate for federal student loans at 3.4 percent. He urged them to tell Congress, “Don’t double my rate” to 6.8 percent, as current law requires.
He was arguing against … no one. Republicans and Democrats alike propose holding the rate steady. As is often the case, they differ only over how to offset the cost (Republicans would cut spending; Democrats would raise someone’s taxes). Obama’s presumptive GOP opponent, Mitt Romney, also favors holding down the rate.
No doubt, a higher rate would be a blow to students. And the job market, still stagnant almost three years after the recession ended, means they’ll have a hard time finding a job to pay off their loans, whatever the interest rate. But the student-loan interest rate has fallen each of the past three years, and student debt rose sharply anyway. It now tops $1 trillion, more than Americans collectively owe in credit-card debt.
The root of the problem is the soaring amount of principal students are borrowing due to the rising price of tuition.
Tuition at Georgia’s public colleges has doubled during the past 10 years. Add the mandatory fees that figure more and more prominently into their prices, and the price has nearly tripled at both Georgia Tech and the University of Georgia.
In fact, given the past decade’s growth rate, students can expect a four-year degree to run them more than $47,000 at Tech and some $46,000 at UGA. And that’s just for tuition and fees: Living expenses for four years add thousands more.
Ten years ago, the cost of two semesters at either school was about $3,600, for an expected cost of $14,500 over four years (again, for tuition and fees only). It’s much the same story at Georgia’s other colleges. Is a degree really worth three times as much now as then?
Now, like most state agencies, colleges have been getting less from the Legislature: an average budget cut of 3 percent a year since 2008. So they’ve jacked up tuition and fees by 10-14 percent a year since then, depending on the school.
But that doesn’t explain why in the previous five years, when their take from the state budget was growing 5 percent annually, tuition and fees were still rising 6 to 8 percent a year. General inflation was about a third as fast. (The generosity of the HOPE scholarship almost certainly explains part of the faster growth for college prices.)
Had tuition and fees grown at even a 4 percent clip during the past decade, a loan to cover them at UGA for four years — even at that doubled federal interest rate — would wind up costing a student about $31,000, according to the feds’ online calculator.
At current rates of tuition growth and even assuming the lower interest rate, that same student is looking at $54,000. That’s an extra $200 a month in loan payments. For 10 years.
If this tale sounds similar to that of health care, you must have aced the SAT. Health care, education, energy: Markets in which the government plays a large role have seen prices grow wildly. And that’s a big reason many Americans feel they aren’t getting ahead, college degree or not.
– By Kyle Wingfield
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199 comments Add your comment
Jefferson
April 30th, 2012
10:03 am
Romney’s answer — shop around. If he borrows for his kids, its only to make money on the loan.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
10:07 am
“Here’s what you can expect:”
“Can expect” and “will expect” are two very different things, Finn. Obama claims he didn’t pay off his and Michelle’s student loans until just 8 years ago, much later than when they began raking in the big money. They obviously weren’t being pressured to pay them back, and it had nothing to do with his elected status, but everything to do with lax or non-existent enforcement.
Morning Reads – April 30, 2012
April 30th, 2012
10:09 am
[...] higher education tuition, Kyle Wingfield reminds us that it’s the smoke, not the mirrors, that get you every [...]
JKL2
April 30th, 2012
10:12 am
carlosgvv- There’s something to be said about not going past the 8th grade, and you’re definitely the one to say it.
You can always go back to school and get an education. It’s not too late. I had an aunt who started college at 46. Became a computer programmer at the college.
I had to take an upper level math class for my second degree. I hadn’t had a math class in 9 years at that time. Know what I did? Studied. Maybe you should try that instead of making excuses.
Kyle Wingfield
April 30th, 2012
10:20 am
JDW @ 9:36: Certainly, health care and education rely on highly skilled workers. But don’t you think there are also a lot of private industries where people are the main cost input? Particularly when the costs associated with health care are driving up the cost of labor? For example: When I was in college, the rule of thumb was that half a newspaper’s costs were people and half were everything else (paper, ink, etc.). Given the rise in health costs for employees and the decline of printed media vis-a-vis digital, I would expect that ratio to be more skewed toward people in my industry, at least. The same would be true for most service industries, which of course make up a larger and larger share of the economy.
As for reasonable data: I spent 600 words in this column describing just the local increases in higher education prices, and that didn’t even touch k-12; I didn’t think I needed to describe the rise in health costs, given the amount of discussion we’ve had on this blog about them during the past three years. Your distinction between public and private colleges doesn’t address the key point, because government loans apply to either one — and it’s the ability to borrow sky-high amounts without regard to one’s ability to repay the loans that most distorts this market. (It’s similar to third-party payments in health care, and government programs account for the largest portion of those.)
Interestingly, your point about the slower growth in private tuition undermines your point, because it would appear private institutions have been able to keep their costs from rising as quickly. The absolute dollar amounts are misleading, because looking only at tuition prices for public colleges requires us to ignore public appropriations that supplement tuition — private tuition was growing from a larger base because tuition isn’t the whole story at public colleges, so of course its absolute increase was larger even if its growth rate was slower.
As I noted in the column, public tuition in Georgia was rising quickly even when public subsidies were also rising in the early part of the last decade. The report you linked does not address that on a nationwide basis. So, it seems highly unlikely that declining appropriations tell the whole story, or even most of it.
ragnar danneskjold
April 30th, 2012
10:20 am
If you want a price to rise, increase “access” to it. Subsidies are the surest way to inflate profits for the receiver. I suspect those on the college payrolls want taxpayers to continue to keep them in the manner in which they are accustomed.
If you want to rein in unreasonable costs, eliminate subsidies. For colleges that would simply mean abolishing taxpayer subsidy of college loans, which by coincidence would also be beneficial for the student’s post schooling financial health.
Healthcare is a more complex problem – the health insurance industry has bred two generations of “someone else pays the bill throughout the lifetime” mentality. I cannot conceive of a cure that would not require (a) curtailing freedom of contract (i.e., mandatory a $500 minimum co-pay for any service, prohibit insurors paying more than $10,000 in bills in any month), and (b) serious constraint of malpractice actions. I cannot blithely endorse restrictions on economic freedom. The only steps I can support without reservation are elimination of tax deductions for medical expenses (which would add a minimal constraint on “demand”) and elimination of federally subsidized medical research (which would suddenly increase the supply of providers.) As to malpractice, I could live with adopting a scheme similar to workers’s comp as a compromise between legitimate need for recompense and punishment, and runaway juries.
grated
April 30th, 2012
10:28 am
Obama is the white Bill Clinton.
Cherokee
April 30th, 2012
10:30 am
On the issue of the interest rate: First, this rate increase they are talking about affects only subsidized Stafford loans and reverts the rate back to where everyone else with an unsubsidized Stafford loan (i.e. the ones working through school and independent of mom and dad) are. It’s an important nuance that I have not heard one pundit, the President or congressional leader mention.
On the issue of repayment: at 6.8%, the repayment per month for a standard repayment schedule over a 10 year period is about $110 per $10,000 financed (plus or minus). So, given a $60k loan, which should cover a modest lifestyle with roommates, tuition and fees at Tech, we are looking at $660 a month. A lot for sure, but not insurmountable. For a Tech grad in engineering, this should be no problem, given average starting salaries that will get you about $4000 a month after taxes. But I guess where the problem comes with the liberal arts and the relative worthlessness of those degrees. Starting jobs in those fields are $35-40k at most, but the pay climbs quickly once you are in. The income-dependent repayment would take a similar $60k loan down to $250-300 a month, which is very manageable. The debate is very emotional now and I think it’s important to have some perspective here.
There are so many bigger questions than just the amount of debt and the main one revolves around how and why we are educated in higher ed the way we are. Is nearly two years of BS “core” classes necessary for an engineering student? Why does the “college experience” revolve completely around the institution itself. Why do we insist on directly subsidizing majors like “General Studies.” Why are the basics for higher level work not taught at a university and the rest of the knowledge gained in the field through apprenticeship programs?
Maybe it all comes down to this: isn’t the relegation of higher ed to the new high school just the chickens from the decades of garbage education we are providing our kids coming home to roost? Why do companies demand a BA from a receptionist? Because K-12 education in this country stinks and a BA is the only way to guarantee that the employee knows how to subtract without a calculator. Even the “good schools” are terrible at preparing kids to be functional adults. The issue of the actual need for college is one that must be addressed over the next 15 years – we need a complete shake-up. In the end that is what is going to solve this issue.
Kyle Wingfield
April 30th, 2012
10:30 am
jd @ 8:39: In FY2008, the Legislature appropriated $2.142 billion for the university system. In FY2013, $1.829 billion. That’s an average decline of 3.11 percent per year during those five years. All data are taken from state budget reports.
You’re right that enrollment has increased during this time period. But it has grown at a slower rate (3.1 percent a year on average, from FY03 to FY12; figures are not yet available for FY13) than the university system’s total budget (5.4 percent a year on average from FY03 to FY12). These data are taken from USG reports.
ragnar danneskjold
April 30th, 2012
10:31 am
Reformed Rightie @ 7:54 and Carlosgvv @ 8:08 perhaps point to appropriate and do-able solutions. The lower costs of online colleges will have a beneficial effect on the industry. Carlosgvv correctly observes the shortage of math and science graduates and the surplus of psychology and history majors. The obvious solution for the latter is to limit the Federal loan program to the final two years of higher education, and only for math and science majors.
Progressive Humanist
April 30th, 2012
10:35 am
And within just a few minutes of my prediction that the clowns would roll in with their ignorance one did just that at 8:20. We may need a little instructional session for the less-than-well educated:
This poster uses anecdotal information about one professor to suggest that those numbers generalize to the greater population: “[Elizabeth] Warren lists $350k per year from Harvard working as a part-time professor.” This is high school level thinking. First, the pay of a Harvard professor is not representative of the pay of professors across the country. At most public colleges professors start out at $55k to 65k, even at top flight research universities. A tenured professor with administrative duties and many publications may make $100k. Business and law professors make a little more, but unless they’re administrators are unlikely to break $150k. You think that’s too much for someone with a PhD who is likely among the nation’s leading experts in their field? In most cases the only professors who make $300k are the ones at medical colleges, but hey, they’re professors AND medical doctors who do things like perform heart surgery and brain surgery and show others how to do it. Overpaid, right?
So based on the salary of one professor at Harvard, the poster comes to this conclusion: “The one place wages aren’t stagnating and layoffs aren’t occurring at the same rate as in the real world is on our college campuses.” More ignorance. Just like teachers in the public school system, college professors haven’t had raises in years and fewer are getting hired, so when attrition is factored in the workforce would be shrinking. The only thing that is keeping the raw numbers from shrinking is that many people have been going back to school because they are realizing that they don’t have the education to succeed in the current employment market. More college students means more demand for college professors. This is why there aren’t layoffs. But the professors certainly aren’t getting paid more and they aren’t making vast amounts of money.
The uneducated hick @ 8:20 blogging from his trailer might not have a whole lot of facts, or even the capacity for critical thought, but he does have a political agenda, and nothing can get in the way of that. It’s a pitty he couldn’t trade in that blind indoctrination for a more advanced education. Then he would actually be able to contribute something positive to the nation.
Jefferson
April 30th, 2012
10:41 am
Put a needs basis on the HOPE money and heads will explode. A loan without collateral, is just asking for trouble.
Intown
April 30th, 2012
10:43 am
Kyle: Your Georgia public college figures for costs show that those schools are an incredible bargain compared to the cost of a private 4-year college education. By the time my kids want to go to school, 4 years at a private college will cost half a million dollars. Factor in the increasing need for advanced degrees and the rising cost and you have an unsustainble situation. Do we have an education bubble?
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
10:45 am
Progressive Humanist needs to look up the term, “tip of the iceberg”.
It wouldn’t hurt if he/she also understood the meaning of “cause and effect”
Educating themselves on the effect of subsidies artificially inflating costs wouldn’t hurt their quest for knowledge, either.
Knowing the difference between being laid off and not getting a raise while still keeping your job would also be a good place for Progressive Humanist to start learning, either.
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
10:47 am
Obama claims he didn’t pay off his and Michelle’s student loans until just 8 years ago,
Tiberius, you don’t get out much, do you? Student loans come with a repayment schedule – to be paid back monthly over the course of umpteen years. The loan writers aren’t chasing people down trying to get them to pay them faster – they don’t want you to pay faster.
Let me tell you how a bank works, ok? A bank makes a loan to an individual and provides a repayment schedule at a certain rate. They want you to pay it back but they don’t want you to pay it back early! If you pay it back early then the bank doesn’t get the interest earnings on the months after you’ve paid off the loan early.
Does that make sense? A bank wants it’s borrowers to pay them back – that is it. No rush and don’t be delinquent.
Richard
April 30th, 2012
10:53 am
Thank you Kyle!
This is another example of the government trying to put a bandaid on a bullet wound. The problem is that people are actually buying this garbage.
To assign some real numbers, let’s say you ran up $50,000 in debt. At 6.8% over 10 years, you’re looking at $558.33/month (approximate). At 3.4%, it’s about $487.50/month. The government wants us to believe that the $70.83 difference is causing defaults rather than the $416.67 principal. It’s total BS.
The other thing is the 5% default rate which is another bogus number. If we’re looking at the number of people that can’t afford to make loan payments, it’s 90%. That’s the defaults plus the 85% that move back home to mom and dad so they don’t default.
Thank you Kyle for addressing the real issue here.
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
10:54 am
Yeah, let’s pay our collee level teachers and professors minimum wage. Let’s see what quality edumacashun we get then!
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
10:54 am
collee = college
Richard
April 30th, 2012
10:54 am
Here’s the scary question: At what point is a college degree no longer worth the cost?
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
10:55 am
Finn, responsible people on the government dime (as in student loans they received via the government) should be repaying those loans as fast as they financially can, so that funds can be made available to others who need them.
Holding onto those loans much longer than your ability to pay them off is doing a disservice to the rest of the people who are waiting in line for that money.
Not to mention it is lazy and irresponsible to not pay them off once you’ve “made it” when the money wasn’t yours to begin with.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
10:58 am
“Yeah, let’s pay our collee level teachers and professors minimum wage. ”
Well, considering that absolutely NO ONE has actually called for that to happen, this is known as manufacturing an issue – something liberals like Finn McCool specialize in.
See: GOP war on women, “access” to contraceptives, and college loan interest rates as proof.
JDW
April 30th, 2012
11:00 am
@Kyle…”Given the rise in health costs for employees and the decline of printed media vis-a-vis digital, I would expect that ratio to be more skewed toward people in my industry, at least. ”
Media is a perfect example to use to draw a contrast. Media has been disintermediated by the internet while the same is not true, as yet, for education. While the raw percentages of the cost of people in media have increased the supply has exploded driving down the cost. You now compete with an untold number of low cost providers i.e. anyone with a computer and internet connection. The same is not true in education thus higher costs have been the result.
Now to this point…”government loans apply to either one — and it’s the ability to borrow sky-high amounts without regard to one’s ability to repay the loans that most distorts this market.”
First off there is not “disregard of one’s ability to repay”. The very nature of an education is that it creates the ability to repay and there are significant collection measures in place to enforce this repayment. Second, you can’t seriously be postulating that via government spending we are overeducating our population…
“The evidence for the individual economic benefits of college is overwhelming. While the wage premium for a college education is not at its highest level ever, it is larger than it was five years ago, and typical four-year-college graduates earn more than 50 percent above typical high-school graduates.”
http://chronicle.com/article/Are-Too-Many-Students-Going/49039/
With returns like that it would be impossible to “overspend” in the near term.
Lastly…”Interestingly, your point about the slower growth in private tuition undermines your point, because it would appear private institutions have been able to keep their costs from rising as quickly.”
Nope…the raw cost is per student and includes all funding sources. Fact is private institutions spend more than twice as much per student and that gap is not closing. The irrelevant data is the percentage increase in tuition. The important part is how many dollars an institution spends to produce an end product of comparable quality. Public universities simply get more value for the dollar than private ones.
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
11:00 am
LOL, Tiberius thinks one student won’t get a college loan because somebody else hasn’t paid off their loan already. The money isn’t available yet?
mwuahahahahahaha
The interest on the loans go to offset the cost of providing them. Well, I know your eyes are glazin’ over so I won’t go on.
Just ludicrous.
Lil' Barry Bailout (Revised Downward)
April 30th, 2012
11:02 am
But rising tuition is so much less fun to talk about than the War On Women.
Just another distraction from the last four years and:
- higher unemployment
- higher deficits
- more families on welfare
- higher gas prices
Obozo: Fail.
curious
April 30th, 2012
11:04 am
If charging a higher interest rate on a student loan is okay, why not increase taxes on the rich?
According to the arguments here, the increased cost for a loan will be minimal, so why bother?
The increased tax on the rich will only provide a minimal impact on the deficit, so why bother?
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
11:04 am
You Cons are cutting off the face to spite the nose.
Starve the institutions, drop teacher wages, take away alot of the government funding for education. And you expect America will thrive?
When Bolivia passes us by on the schedule of educated nations what will your plan be then? Hope you folks like manual labor. You are arguing for more of it.
Rafe Hollister
April 30th, 2012
11:05 am
Kyle, one of the big cost drivers you missed is the devaluation of the dollar. Why is oil so high? The same reason education costs tend to rise. Bernanke running that printing press in an effort to bring down the deficit and debt by inflating the dollar causes prices to rise. The libs just whine on and on about tax “fairness”, while they miss how this administration is causing their paychecks and savings to evaporate before their eyes. Oblamer keeps the focus on “Fairness”, big oil, and Wall Street, to shift their attention.
The Hope scholarship also served as “free money” for the schools. For awhile they could spend at will and the legislature would just up the amount paid for tuition. We got condos in Atlanta, “research centers” in Costa Rico, etc, because they were flush with money. They have not been forced to austerity yet, and as long as students are competing to get in, they will not be.
How long before students realize that only 50% of them are finding jobs upon exit from college? Obama hopes that he can keep them distracted from their situation until after Nov.
That Black guy
April 30th, 2012
11:09 am
DeborahinAthens
April 30th, 2012
6:39 am
why did they have to take money from healthcare and why did they specifically target the part of healthcare that was for women?
________________________________________________________________________
You DO realize that is the EXACT same cut that Obama proposed in his 2013 budget, right.
Of course you knew that.
Road Scholar
April 30th, 2012
11:09 am
Reformed Rightie: “Colleges have to change with the times. They currently have way more infrastructure then necessary. Online courses have made much of the cost of traditional college unnecessary.”
So how do students get to share ideas and solutions if courses are offered on-line? And what is to keep “students on line” from cheating? Did you see the news last night about groups of kids of different age brackets taking an “unsupervised ” test? Rampant cheating was filmed by hidden cameras; some of the kids said that they would “never cheat”! A college professor my wife works with was giving final exams recently when she found a student with an I phone between his legs looking at his notes while trying to take his closed book test. He violently denied he had done anything wong! My wife requires students to work on projects in groups to not only master/understand the study, but to improve inter-personal skills….needed to work in business!
As for facilities, GT CE program has increased the enrollments by a factor of at least 2.5 times. It is the 3rd ranked CE program in the US by US News and World Report. Students can’t fit into the classrooms, sit on the floor or stand during class. Conducive to learning? Labs over crowded…
Deborah: Even with your misspellings, your report was a very factual and pertinent response.
Oh, and Kyle, good column!
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
11:09 am
Government, like a bank, issues a loan with an expected reimbursement rate. You know what that rate and term give to both the government and to banks? An expected stream of income! DOOH! It can expect to receive so many millions of dollars each month from it’s outstanding loans. This revenue stream goes to supporting long term investments.
Why do i even bother?
Jefferson
April 30th, 2012
11:10 am
At this rate Nancy will be busy next year.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
11:12 am
“The very nature of an education is that it creates the ability to repay and there are significant collection measures in place to enforce this repayment.”
Yeah, ’cause that degree in French Literature is sure going to pay the bills in ANY market.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
11:15 am
“LOL, Tiberius thinks one student won’t get a college loan because somebody else hasn’t paid off their loan already. The money isn’t available yet?”
Apparently, Finn never learned the basics of banking, where you must first have capital in order to loan it out.
But then, he’s so wrapped up in government, which in his mind never has to worry about whether actual money is available, that solid fiscal rules need not apply in the real world.
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
11:21 am
Tiberius – hopefully you’re not working as a financial planner.
When you have loans at different rates, it’s best to focus on the higher rate loans first because those are costing you more money. I’m 47 years old and just finished paying off my student loans 4 years ago – the loans with 6% interest. The student loans I had at 12% were paid off within two years of leaving college.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
11:27 am
Thanks for mooching off the taxpayers for about 20 years, Finn.
The difference between you and me will always be one of personal responsibility, Finn.
I have it in spades, and you don’t believe in that concept very much.
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
11:28 am
Finn never learned the basics of banking, where you must first have capital in order to loan it out
This is like you cons comparing private debt (personal credit cards, Home Equity loans, etc) to federal government debt. Totally clueless.
The money isn’t going to “run out”, Tiberius. and one of the reasons it isn’t going to run out is because it’s being repaid with interest.
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
11:29 am
I have it in spades, and you don’t believe in that concept very much.
You announce your low self-esteem like 30 times a day, Tiberius.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
11:31 am
“The money isn’t going to “run out”, Tiberius. and one of the reasons it isn’t going to run out is because it’s being repaid with interest.”
More manufacturing of an issue, Finn, since no one has ever said it was going to run out. However, availability is an issue when too much debt is outstanding and people aren’t paying back their loans. That’s how banking works in the real world, Finn.
Not your manufactured one.
MrLiberty
April 30th, 2012
11:32 am
What a shame that you waited until nearly your last sentence to point out the HEART of the matter. Every market in which government money plays a role sees unnaturally rising prices. This is the heart of the Austrian economic explanation for all bubbles and bursting bubbles, and has been the primary driving force behind ONLY ONE presidential candidate – Ron Paul of course.
Only he understands the connection between low interest rates and malinvestment. Only he pointed out the building bubble in the early 2000s. Only HE bothered to warn everyone about the impending housing crisis.
But of course Romney and Obama are huge recipients of Goldman Sachs money so they love the low interest rate lie that fosters chronic dependency on fiat money and and failed economy.
The race is far from over. Plenty of delegates remain unselected. The convention has not happened. In the early 1900s a republican convention was held in which a candidate was not selected until the 10th ballot. His name was Warren Harding. For all his other flaws, he allowed the economic collapse of 1920 to simply resolve itself without Federal Reserve or government intervention. The pain was great. In real numbers, the situation was even worse than at the beginning of the Great Depression. It was right at the end of WWI, dependency on government spending combined with cheap money and Federal Reserve expansion of credit for the war led to the collapse. He let the market resolve the malinvestment and the crisis ended in just over a year. His idiot sec. of state Hoover demanded massive intervention in the economy. Thankfully Harding was a man of principle. It would take Hoover’s massive intervention after the crash in 29 to show the folly of that approach. Hoover began the New Deal policies of FDR that caused so much pain for so long.
Dr. Ron Paul may come out of Tampa as the nominee, and given the massive collapse the US economy is in for, that will be the best thing we could hope for as certainly both Obama and Romney would do everything to make things worse for the rest of us while making sure their friends on Wall Street are protected from any serious misery.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
11:35 am
“Dr. Ron Paul may come out of Tampa as the nominee,”
Yeah, and the Zapruder film proves that JFK shot first . . .
Two sentences that have no basis in reality.
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
11:35 am
Tiberius must have gone to a bank for a loan and the banker said “Um, no, not today, we don’t have any more money…come back next month and try us then.”
Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)
April 30th, 2012
11:37 am
However, availability is an issue when too much debt is outstanding and people aren’t paying back their loans.
So, there is a repayment problem so bad it’s affecting the government’s ability to provide loans? I guess the default rate nationally must be over 50%, there, Tiberius?
Rafe Hollister
April 30th, 2012
11:37 am
Dr. Ron Paul may come out of Tampa as the nominee,
Yeah, and he and Louis Farrakhan will join hands and board the mother wheel and ascend into space.
Rafe Hollister
April 30th, 2012
11:39 am
Finn, you are actually right about one thing, as long as Bernanke is in charge of the money supply, there is no chance of ever running out of money. Printing wheel keep on turning…
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
11:43 am
Finn, get this through that thick skull of yours. EVERY slow repayment and EVERY default affects the ability to get new capital into a financial system, unless that system is fiscally unsound as this government is.
But hey, if you think that $1 TRILLION in outstanding loans, many of which will likely never get paid back or at the very least be delayed for decades is a good situation to be in, that’s your problem, not mine.
Kyle Wingfield
April 30th, 2012
11:45 am
JDW @ 11:00: I’m sorry, but it simply isn’t true that the 56% vs. 32% figure includes all funding sources. It is a specific reference to tuition increases. Tuition, of course, does not cover all funding sources.
On your other points:
1. You note “the same is not true, as yet, for education.” The question is: Why? When I was in high school more than 15 years ago, we could take distance-learning classes in Japanese, Russian and other subjects not offered by my high school. Given the rapid advances in technology since then, why has education (especially higher ed) not taken advantage of them to reach more students with fewer teachers — and probably increased quality along the way, by having more students taught by the best teachers? My belief is that education simply hasn’t faced the same competitive pressures, because it essentially can increase its prices at will: either by raising property taxes at the k-12 level, or by increasing tuition and telling 18-year-olds they’ll be failures in life unless they pay up (and then supplying loans underwritten by the federal government to make sure they can pay, at least up front).
2. Of course there’s a disregard of one’s ability to repay. Do the lenders charge lower interest rates for students pursuing finance degrees vs. those studying art history? Is there a differentiation based on GPA, SAT scores, etc.? Based on the number of people studying a given subject relative to the number of jobs expected to be available for graduates in it? Of course higher education makes one more likely to be able to repay the loan than if they had taken out the same loan and not gotten more education — but that’s not the issue. The issue is whether you can get the same loan, at the same terms, to study, say, journalism as to study engineering. And the ability to repay will be very different among various courses of study and, let’s face it, aptitude of students.
Kyle Wingfield
April 30th, 2012
11:47 am
Rafe @ 11:05: Good points.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
11:53 am
Great points @ 11:45, Kyle.
Cobbian
April 30th, 2012
11:54 am
The question of why costs are going up so much in colleges and universities is a good one. One of the things that has driven costs is demand itself – it has been drummed into all our heads that a college education is a must if you are going to make a reasonable living. And, turns out it is either true or we made it true. But other than that, I don’t think we know what is driving college costs.
Romney’s advise to students is to borrow money from their parents. Really love that one.
As for health care, we have had health care costs out-pacing inflation for decades. It is not government involvement that drives health care costs. What is tricky about trying to parse the problem is that health care demand is “relatively inelastic.” When you need health care, you really need health care. The most costly forms of treatment are for terrible accidents and diseases which treating would literally bankrupt most anyone, except the 1%. But, since life itself is at stake, most families would pay down to their last dime. Health care dynamics don’t fit capitalism very well. Health insurance has come between what should be a natural relationship between the service provider and the consumer. Instead both are now customers of the insurance companies.
We won’t solve it with “tort reform” either, mostly because it hasn’t worked to reduce health care costs in states where it has already been enacted. The bigger danger, though, is that it is a direct assault on the Bill of Rights. The 7th Amendment to the Constitution provides for a trial by jury “where the value in controversy shall exceed twenty dollars…” What we do with tort reform is substitute the wisdom of politicians for a judgement of our peers. No system is perfect, but I would rather live with the imperfect jury system than the wisdom of politicians.
Tiberius - Banned from Bookman's and proud of it!
April 30th, 2012
11:59 am
Cobbian, you’ve just posted 4 paragraphs of opinionated statements, yet provide no proof for those opinions.
Facts work so much better when trying to sway someone to your beliefs.