student loans driving tuition costs?

Just a thought:
Students, in record numbers,are thousands of dollars in debt after graduation-taking years to repay these loans. If the government provided no student loans many , if not most students, would not be able to go to college. IF student loans were not available many schools would close or go bankrupt. Universities would be forced to drop fees and tuition to make college more affordable. What is their incentive now.
In many countries in Europe education is free from preschool to the PH.D. Also healthcare and childcare. Of course they have higher taxes. But graduate from college with no student loans to pay, and no worries that if you get ill you'll go bankrupt and thats a pretty good start in life.
I know about the financial issues they are having in Europe and maybe they were too generous. But come on -the cost of college in this country is ridiculous.
The government by aiding students with loans appears to be a major contributor to the high cost of education. They can charge what they want because the students can obtain loans to pay and education is a needed commodity.Stop loans and bring tuition down or fold.
Am I wrong ?

 

Because they allow students to loan maximum $22,000.00 per year; then they also allow to borrow another loan. Therefore, school start to jack up the tuition and fee. But students have to smart about it.... look at me, after my second degree at Georgetown University. I still owe ZERO student loan; in fact, I received approximated $20,000.00 after fees into my pocket.

 

No, you are absolutely right. Because loan money is readily available, many students foolishly take out huge loans assuming that their degree will pay off. IMO, this gives schools great leeway in charging whatever they want, whatever the market will bear, and the market apparently will bear quite a bit when the government is doling out student loans. Sadly, the truth hits when the student graduates only to find that they cannot find employment but must begin paying on the loan. It's a very sad and scary situation.

 

Basic economics. The government has artificially supported the price of tuition by giving out grants and subsidized loans. The combination of easy money policies and subsidies drives up the price of consumer goods like education. The same thing happened in the mortgage market when Fannie and Freddie lowered standards and everyone started buying real estate thinking that any investment was a good investment.

The government should roll back educational subsidies and loan limits to 1990s levels to take pressure off of tuition costs.

 

laferney, I totally agree... Didn't Milton Friedman talk about this extensively back in the 70's and 80's ???

 

Here is an article from the NY Times that is relevant.

http://www.nytimes.com/2012/05/25/business/us-subsidies-to-for-profit-colleges-keep-growing.html?_r=1&ref=education