Should Wall Street pay off student debt

[Aquapod770]

(07-02-2019, 05:46 PM)Dill Wrote: Regarding #1, I have heard Tom Shilue, Rush and other conservative pundits make this claim, framing rising tuition as a government created problem. (It's called "the Bennett hypothesis" first articulated by Reagan's secretary of ed. back in '87.) Like you, they make the same analogy to a for-profit business, as if college administrators looking for a profit respond to a market of increasing money supply. And (they say) that's why tuition rises at private schools as well. On their view, freely flowing government money and irresponsible students are the problem, not Republican legislatures shifting previously socialized costs back on students.

If you and they are correct, and I am wrong that state disinvestment is the primary driver of tuition cost in private universities, then you should be able to find data which support your claim in the form of longtitudinal correlation between tuition increases and loan availability.  Conversely, you should not find a correlation between state defunding and tuition increases.  Do you agree that is how we each would establish our claims? Have you checked this out?

(I add that the dynamic is very different for for-profit schools, which do respond directly to money supply, and to which accrue the lion's share of loan defaults; also, I am not claiming that ready availability loans could play no role in rising tuition--just that it is not THE primary driver, or even secondary.)

Regarding #2, until 2010, most student loans were made  by private lenders, just guaranteed by the gov. Predatory lending has driven the shift from private lending to federal (the afore-mentioned default rate at for-profit institutions being one reason for the shift). Since many of those previous loans are still outstanding, I am curious as to where you got the ascription of 7.63% of outstanding loans to private lenders. From the US Dept of Ed. website? 

In any case, the vast majority of students still don't borrow at all. 

The central problem for all, borrower or non-borrower, is still too high and rising tuition. It is the cause of other problems like high student debt, and to get control of that you have to get control of rising tuition. And you do that by shifting costs back to the state--i.e. socializing the cost.

Yes I have. 

https://www.jamesgmartin.center/wp-content/uploads/2017/12/Bennett_Hypothesis_Paper_Final-1.pdf

Keep in mind that correlation doesn't equal causation. Which unfortunately is the problem with a lot of observational research. Both things can be a factor in rising higher education costs, but to ignore evidence of either is purposely ignorant. And yes, the effect is seen more in for-profit schools, as is to be expected. I'm going to let you in on a little secret. Even administrators at "non-profit" schools do their best to raise profits. 

State funding for public education has been cut. Largely in the last decade. Funding fell by about 7 billion since 2008, and certainly has contributed to increased tuition prices. As you can see on the graph in page 2 of my link the problem started well before that. Cuts to state funding have only exacerbated the problem, not been the direct cause.