"In many cases, the choices that student borrowers make are just common sense, based on the financial realities they face. Taken together, they seem to be having a substantive — many would say negative — effect on the economy.
Is that enough reason for schools or the government to step in with a solution? Not many schools are like Anon U (as the researchers above called it), which could afford to take loans off the table. If society wants to change the skewing effect of student loans, some tough decisions about allocating educational resources may well lie ahead."
In what ways can government step in to minimize the ripple effects of rising student debts?
Here is the link to the article.
I had no idea that the value of outstanding student loans has more than tripled in the last decade. It seems like a very bleak future. This article reminds me of the figure that Dr. McKinney posted earlier showing how the costs of healthcare and education have increased significantly while the costs of other goods such as TVs have decreased. Education should not be a luxury but it seems to be becoming more and more of one.
ReplyDeleteI found the correlations quite interesting. It's quite problematic as it stands and there are ways the government can take measurable actions to stop other spill over effects.
ReplyDeleteI find it interesting that "having a college loan appears to reduce the likelihood that people will choose a low-paying public-interest job" (i.e. teaching or a nonprofit job). When people have debts, their motivation to work seems to be driven by money rather than intrinsic motivations (such as to better the society or to do what they like doing).
ReplyDeleteLy, I can definitely attest to that. I have a sizable amount of loans as a result of my study abroad choices, and that plays a big role in the direction I choose for myself after graduation.
ReplyDeleteThis is convincing and makes perfect sense. Forcing students to incur massive amounts of debt really places an emphasis on finding a well-paying, "safe" job.
ReplyDeleteI think the government needs to find ways/incentives for colleges/universities to lower their tuition. This will have a positive effect on lowering the debt that students have to take on in order to attend college. Those students might be able to pursue professions that they are passionate about. I think the government needs to develop an educational reform that makes education affordable to everyone.
ReplyDeleteI saw a statistic the other day from a former K Grads study that said that the average Teach For America Corps members' parents combined income was over $118,000. These students do not have debt and can pursue something they are passionate about and take a lower paying 'public-interest' job. Just some more fuel for the argument. Tuition is a major issue that could solve many other problems if fixed.
ReplyDeleteYoung people are really the new wave of the country, so with the educated young people being in student debt, it is really just a way for the government to drain the energy from them until they are all paid up. It can effect business interactions in many ways.
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