- Joined
- Mar 26, 2012
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The student loan bubble tracks better with the rapid expansion of for-profit education than it does with the creation of the federal student loan program in 1965. For a large number of people a college education is a great investment with a 10-15% rate of return and the federal government giving itself a role as a giant CostCo to get better rates for students is a good and sensible investment. I agree with many of the points about the bubble made in that post, I just don't want reactionary sentiment to lead to actions with (un)intended negative consequences.
Nothing wrong with profit. Really, the problem isn't pursuit of profit. For example, computers get cheaper and more powerful every year and the pursuit of profit is explicit in the computer industry. The only difference between the education market and the computer market is that the computer market has to actively compete for people's dollars. Colleges and graduate schools don't, because the government *always* picks up the tab.
And I don't think this is just a problem with for-profit schools, although they're particularly obscene because their product so often tends to be of such dubious quality. But take my undergraduate institution - it's an extremely highly-rated, private, nonprofit college that's been around for over 100 years, a great school. It cost about 15K for tuition plus fees in the mid-nineties. I just looked at their website and it's now 44K.