The costs of university increase on a purely free-market basis because of incredibly expanding demand for a university education, now poor students can't afford to go to school. The government steps in and assures their loans so poor students can attend. Now since these loans are guaranteed capitalist institutions begin seeing just how much they can bilk students for and thus our dilemma. Our problem is the free market. Government intervention to this point has transformed one free-market problem (school only for well-to-do) into another (school for anyone but loaded with debt) because we haven't had enough government intervention. Just make it free and our problem is solved.
That's not what happened at all. The US Government didn't step in to assure the student loans of poor people. The US Government backed student loans for everyone, on a perpetually increasing basis.
You fail to address the most obvious problem with your claims:
How college costs were able to skyrocket in complete disregard to the ability to repay those loans. The lack of the ability to pay back a loan is a normal check against irresponsible lending, unless you have a printing press backing said loans and can afford to disregard defaults. The lack of responsible lending, courtesy of the US Government, is what enabled the universities to perpetually raise their costs against the lack of any economic restraints. You fail to recognize the broken core to the system: there were no cost inflation restraints, because the US Government made it possible for there to be none.
The fundamental you aren't dealing with, is what enabled the cost inflation to be so extreme, radically beyond any reasonable standards of lending or potential to repay.
The lack of a free market in education is precisely what caused the hyper cost inflation. The US Government created a system of lending backed by its ability to print dollars, which stands completely apart from normal economic reality.
Another hint: guess who is making nearly all the money off the student loans? Yep, the US Government. They're yielding tens of billions per year in interest profit, courtesy of their ability to magically make dollars appear and to put an entire generation into vast debt. The US Govt is earning about 20 times what the private sector is making off of student loans.
No, I think you're not really grasping what I'm saying. Here:
(1) College is cheap, only the few and the wealthy go.
(2) More people start to attend college.
(3) Supply and demand kick in, increasing costs, ensuring that still only the few and the wealthy go to college.
(4) The government doesn't like that poor people aren't able to afford college so they guarantee student loans.
(5) Poor people can go to school now, but price spirals out of control.
This is my timeline.
>The lack of the ability to pay back a loan is a normal check against irresponsible lending, unless you have a printing press backing said loans and can afford to disregard defaults.
You're totally right. The problem here is that it's "irresponsible lending" to give a student loan to a poor student, a black student, and especially say a poor, black student who wants to study history. We as a society though want poor students to get more education and we as a society don't want certain fields limited to just those who are already rich. So we guarantee student loans. Then a bunch of capitalists see that we've broken the loan system, pull out their Gordon Gekko hats and start robbing us blind.
>The lack of a free market in education is precisely what caused the hyper cost inflation. The US Government created a system of lending backed by its ability to print dollars, which stands completely apart from normal economic reality.
The lack of a free market in education is precisely what gave lots of kids who would never have otherwise had the opportunity to attend college that chance.
>Another hint: guess who is making nearly all the money off the student loans? Yep, the US Government. They're yielding tens of billions per year in interest profit, courtesy of their ability to magically make dollars appear and to put an entire generation into vast debt. The US Govt is earning about 20 times what the private sector is making off of student loans.
Sure, I don't like this either. College should be free.
