Saturday, March 31, 2012

Is The So-Called Student Loan Crisis One Big Exaggeration? - No, but nice try.

<blockquote class='posterous_short_quote'>Rising tuition costs are also prompting students to take on more debt.</blockquote>

Yes. That is exactly how managed and subsidized markets explode. The lenders lend more so the schools charge more and then the lenders lend more and the schools charge more... what? This is difficult to understand?

And I love this part... heh.

"I don't think it's a bubble," said Mark Kantrowitz, publisher of, a financial aid website. "Most students who graduate college are able to repay their loans."

From a guy who makes his living writing about financial aid. Well, no bias there I suppose. He doesn't think it is a bubble.

Students spending $50K on a degree in Social Science?

No collateral.
No product.
No ability to foreclose.
No resale value.

In no other area would a bank loan money to someone for something as ethereal as an 'education'. They do it because they are guaranteed repayment. And that releases them from risk.

So they can loan whatever is being asked for, and the Schools can charge whatever they want because the banks will loan whatever is asked for.


And now the students are whining they don't wanna pay.

No gratitude either.

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