Authored By New Guard Staff
February 18, 2020
The government isn’t going to solve the student loan crisis.
In the 1970s, the government guaranteed loans, but banks were still involved in the credit-making decision. This meant that people requesting loans had to demonstrate to banks an ability to repay them.
When Barack Obama took office, the government stepped in to remove banks from the decision-making process on student loans. Schools have used this as an opportunity to raise tuition, raise administrator salaries, raise professor salaries, and build new buildings.
There are “unlimited” funds, and it is all coming from students who are guaranteeing, in effect, that debt. Student tuition is now funding these expenses.
As this debt builds up, education begins to cost more than what it is worth.
When the government gets involved in anything, costs always go up and quality always goes down. In this case, the students are suffering.