Comment Re:So what will end up happening is the states tha (Score 1) 597
The real problem is the whole student loan system. Since most people are paying for college with unlimited-balance, government-guaranteed loans, colleges can charge whatever the hell they want and they know that everyone can afford it and they always get paid. Why does the cost of tuition rise so much faster than inflation? Because colleges suffer no consequences for raising tuition.
If you took away the unlimited aspect or the government-guarantee aspect, you'd see tuitions stabilize right quick. If Uncle Sam (or I guess Aunt Sallie, in this case) said, "Colleges, go ahead and charge whatever the hell you want, but we're only giving each student $15k/yr in loans, indexed to inflation," you'd see colleges implementing some cost controls. Likewise, if Sallie Mae said, "Colleges, we pay you when the student pays us, so better make things affordable, hmm?" same thing would happen.
But no, we have a bubble like the real estate bubble because everybody's buying with other people's money, so nobody cares what it costs.
Mod parent up. US higher education debt now totals more than a trillion dollars. And it's becoming more obvious with each passing semester that students are reliving the history of the dot com and property bubbles. Take something of value, build a story around it that exaggerates its fiscal value, find some sucker to finance it (US taxpayers are born every minute.) This proposed fix won't help. There are too many ways to game the system. We've already turned our state-funded universities into glorified trade schools, funneling most students into accounting, MBA or whatever students counselors perceive to have the shortest term ROI. Basic research suffers and paradoxically unemployable degrees are on the rise. Universities win as long as there is a warm body in a classroom seat. The proposed system might help in the short term by forcing the burden of unraveling this mess onto the most educated population, but in the long term it will punish higher education, reward those horribly narrow certificate factories, give further advantage to PhDs in India and China and force even more of our best and brightest to leave the country.