MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘student loans’

What Has Government Done to Our Universities?

Posted by M. C. on September 7, 2022

by David Brady

The real spike in prices was primarily due to government guaranteed student loans. The government’s Federal Family Education Loan program guaranteed that if a loan from a private lender or Sallie Mae defaulted the government would take over the loan and pay the loss. This guarantee ended in 2010, but the consequences were in these lenders giving out more student loans than they ordinarily would.

The natural incentive is for the government to send money to those most likely to justify the actions of the government. Harvard University is the recipient of over $1.9 billion in grants from the National Institute of Health and one is for pushing ideas of “Transforming Transgender Care.” 

https://libertarianinstitute.org/articles/what-has-government-done-to-our-universities/

Joe Biden has stoked more fire into the debate over higher education. The president unveiled a plan to forgive $10,000 of student debt for those making $125,000 a year or less, or $20,000 if that borrower was a recipient of a Pell Grant. While one can argue about the economic or moral implications of the decision, the question that many seem to have missed is: why is a college education so expensive? Is it even worth it? What has the government done to our higher education system?

In the United States, there is over $1.75 trillion in student loan debt with an average of $28,950 plus interest for each borrower. What made college so expensive? That is a gross combination of issues, including how students pay for their college education.

2013 12 06 collegecosts thumb
  • Facebook
  • Twitter
  • Pinterest
  • reddit
  • LinkedIn
  • Buffer

Traditionally a college education was paid for either by a family saving up for a child to seek a higher education, or the young adult working almost full time alongside their education to pay it off. That is no longer the case amongst Americans. Rather than alternatives such as entrepreneurship, apprenticeship, or simply requiring a GED or high school diploma, almost half the jobs in the United States now demand some form of college education according to the Bureau of Labor Statistics. The cultural demand for a college education certainly could have driven up costs, but almost 570% almost seems impossible.

The real spike in prices was primarily due to government guaranteed student loans. The government’s Federal Family Education Loan program guaranteed that if a loan from a private lender or Sallie Mae defaulted the government would take over the loan and pay the loss. This guarantee ended in 2010, but the consequences were in these lenders giving out more student loans than they ordinarily would. Borrowers who would be unable to get a loan for the career they seek out were less of a risk to these lenders, and those banks were willing to give out more loans to students. The subsequent result was rising prices. If loans are being given out so easily, then colleges can afford to raise prices as students will simply take out more loans.

Title II of the Student Aid and Fiscal Responsibility Act of 2009 (Subtitles A & B) demolished the Federal Family Education Loan Program and directed the Department of Education to issue loans directly to students. This misuse of loans has resulted in much the same issues and costs described above. Students choose majors that provide no real skills for actual jobs and waste years of their young lives while progressive ideology spreads.

Progressive ideology runs rampant in universities for to two reasons: heavy government investment and the embrace of ESG in their financiers. Between student aid, grants, and contracts the United States government has sent $149 billion to colleges and universities. The natural incentive is for the government to send money to those most likely to justify the actions of the government. Harvard University is the recipient of over $1.9 billion in grants from the National Institute of Health and one is for pushing ideas of “Transforming Transgender Care.” Harvard benefits from:

“…Tax privileges conferred by the federal government have helped institutions like Harvard build extraordinarily large endowments. So-called private colleges have willingly forfeited some of their independence to federal bureaucrats in order to keep the federal bounty coming.”

All the while, Harvard continues to promote progressive philosophy like Critical Race Theory that can be found explicitly in their law program and their website.

Universities and their endowment funds have even gone so far as to embrace ESG as part of their priorities. ESG—short for environmental, social, and governance—is a credit rating by large investment firms for businesses and companies based upon those three factors. ESG has become weaponized by progressives against companies that appear disfavorable to them. For example, Tesla, an electric car company, remains in the 58th Percentile, while Exxon, an oil company, is in the 38th. Clearly these have little to do with actual environmentalism and far more with what upsets the progressive dogma and ideology. Such schools as the University of California, Georgetown, Harvard, and Oxford have embraced ESG, and along with it the “social” governance scores that push a progressive agenda. ESG is used by the largest corporate firms in the world such as BlackRock, which manages around $10 trillion. Their CEO Larry Funk has intimate connections with the Federal Reserve Chairman.

A combination of government investment in loans as well as grants by progressive dogma has resulted in not only a more expensive higher education but also a progressive indoctrination camp. Students leave college with largely useless degrees, a thorough brainwashing, and tens of thousands in debt.

Government and ESG has our universities.

About David Brady

David Brady is an At-Large and Social Media Contributor for the Libertarian Party of Minnesota and host of The Road to Providence Podcast on YouTube & Odysee. Follow him on Twitter @realDavidBJr.

Be seeing you

Posted in Uncategorized | Tagged: , , , , | Leave a Comment »

Watch “Lawless! Biden Side-steps Constitution In Promise To Write Off Student Loans” on YouTube

Posted by M. C. on August 26, 2022

https://youtu.be/ibKJIteBlQo

Be seeing you

Posted in Uncategorized | Tagged: , , | Leave a Comment »

How Government-Guaranteed Student Loans Killed the American Dream for Millions – Foundation for Economic Education

Posted by M. C. on December 4, 2019

The government’s backing of student loans has caused the price of higher education to artificially rise; the demand would not be so high if college were not a financially viable option for some.

He is talking about Fed (“government”) money.

https://fee.org/articles/how-government-guaranteed-student-loans-killed-the-american-dream-for-millions/

n Basic Economics, Thomas Sowell wrote that prices are what tie together the vast network of economic activity among people who are too vastly scattered to know each other. Prices are the regulators of the free market. An object’s value in the free market is not how much it costs to produce, but rather how much a consumer is willing to pay for it.

Loans are a crucial component of the free market because they allow consumers to borrow large sums of money they normally would not have access to, which are later paid back in installments with interest. If the borrower fails to pay back the loan, the lender can repossess the physical item the loan purchased, such as a house or car.

Student loans are different. Education is abstract; if they’re not paid back, then there is little recourse for the lender. There is no physical object that can be seized. Student loans did not exist in their present form until the federal government passed the Higher Education Act of 1965, which had taxpayers guaranteeing loans made by private lenders to students. While the program might have had good intentions, it has had unforeseen harmful consequences.

The Problem with Government-Backed Student Loans

Millennials are the most educated generation in American history, but many college graduates have tens of thousands of dollars in debt to go along with their degrees. Young Americans had it drilled into their heads during high school (if not earlier) that their best shot—perhaps their only shot—at achieving success in life was to have a college diploma.

This fueled demand for the higher education business, where existing universities and colleges expanded their academic programs in the arts and humanities to suit students not interested in math and sciences, and it also led to many private universities popping up to meet the demands of students who either could not afford the tuition or could not meet the admission criteria of the existing colleges. In 1980, there were 3,231 higher education institutions in the United States. By 2016, that number increased by more than one-third to 4,360.

Secured financing of student loans resulted in a surge of students applying for college. This increase in demand was, in turn, met with an increase in price because university administrators would charge more if people were willing to pay it, just as any other business would (though to be fair, student loans do require more administration staff for processing).  According to Forbes, the average price of tuition has increased eight times faster than wages since the 1980s. In 2018, the Federal Reserve estimated that there is currently $1.5 trillion in unpaid student debt. The Institute for College Access and Success estimates that in 2017, 65 percent of recent bachelor’s degree graduates have student loans, and the average is $28,650 per borrower.

The government’s backing of student loans has caused the price of higher education to artificially rise; the demand would not be so high if college were not a financially viable option for some. Young people have been led to believe that a diploma is the ticket to the American dream, but that’s not the case for many Americans.

Financially, it makes no sense to take out a $165,000 loan for a master’s degree that leads to a job where the average annual salary is $38,000—yet thousands of young people are making this choice. Only when they graduate do they understand the reality of their situation as they live paycheck-to-paycheck and find it next-to-impossible to save for a home, retirement, or even a rainy-day fund…

How to Fix the Problem

There are two key steps to addressing the student loan crisis. First, there needs to be a major cultural shift away from the belief that college is a one-size-fits-all requirement for success. We are beginning to see this as many young Americans start to realize they can attend a trade school for a fraction of what it would cost for a four-year college and that they can get in-demand jobs with high salaries.

Second, parents and school systems should stress economic literacy so that young people better understand the concepts of resources, scarcity, and prices. We also need to teach our youth about personal finances, interest, and budgeting so they understand that borrowing a large amount of money that only generates a small level of income is not a sound investment.

Finally, the current system of student loan financing needs to be reformed. Schools should not be given a blank check, and the government-guaranteed loans should only cover a partial amount of tuition. Schools should also be responsible for directly lending a portion of student loans so that it’s in their financial interest to make sure graduates enter the job market with the skills and requirements needed to get a well-paying job. If a student fails to pay back their loan, then the college or university should also share in the taxpayer’s loss. Only when the demand for higher education decreases will we witness a decrease in its cost.

Be seeing you

Posted in Uncategorized | Tagged: , , , | Leave a Comment »

Doug Casey: The Democratic Party Is a “Freak Show” – Casey Research

Posted by M. C. on May 18, 2019

No, to come up with ideas like hers means that you’re purposefully trying to create a disaster; that’s the definition of an evil person.

You only have to look at John Bolton to know progressives don’t have a on lock on freaks.

https://www.caseyresearch.com/articles/doug-casey-the-democratic-party-is-a-freak-show/

Justin’s note: Elizabeth Warren could cost America trillions of dollars.

Warren is, of course, a Democratic senator from Massachusetts. She’s also running for president.

And like many fellow Democrats, she’s full of wacky ideas. Most recently, she made waves by saying she wants to forgive more than $1 trillion worth of student loans if she becomes president. She also wants to issue reparations to African Americans, which could also cost trillions.

These sorts of ideas used to be considered extreme. A candidate would get laughed out of the race for suggesting them. But those days are over.

A recent poll found that just 27% of Americans oppose Warren’s debt forgiveness plan. As for reparations? Well, fellow Democratic presidential candidates Bernie Sanders and Kamala Harris both support the idea.

Of course, not everyone’s a fan of these ideas. Doug Casey is one of those people. Below, Doug tells me why these ideas are not only ridiculous but destructive. He also tells me why he thinks Warren is part of a much bigger problem.


Justin: Doug, what do you make of Elizabeth Warren’s plan to forgive student loans? Surely, student loans are a major problem.

But I’m not sure this is the best solution. What do you think?

Doug: Well, it makes perverse sense that she’d suggest something like this. After all, a new Democratic presidential candidate enters the race every day now. I think we’re up to 22 candidates now. But who’s counting?

They seem to be competing with each other in an actual freak show. The Evil Party is trotting out its most bizarre nomenklatura, each trying to outdo the other in being socialist, black, queer, transgender friendly, or a professional female. By which I mean a female who parades as a female for a living. They’re vying over who has the most outlandish, rabid and nonsensical ideas about how they’re going to transform the very nature of what’s left of the United States.

Meanwhile, the Stupid Party, the right wing of the Demopublicans, populated by neocons, has-beens, and assorted non-entities, seems mainly interested in hyping the stock market with phony money, and looking for a major war somewhere in the world.

Alexandria Ocasio-Cortez (AOC) kind of set the tone for all this. It amazes me that a 29-year-old Puerto Rican bartender comes from out of nowhere, apparently as a result of an actual casting call, and now everybody in the country takes her ideas seriously.

Perhaps the most stupid of her ideas is Modern Monetary Theory (MMT). This basically amounts to unlimited printing of dollars.

All these other candidates have to call her bet, raise it, and wait for the next player to reraise. They all have some signature goofball idea at this point… Read the rest of this entry »

Posted in Uncategorized | Tagged: , , , , | Leave a Comment »