[quote=EconProf]We economists look at incentives resulting from public policies, and there are plenty of harmful incentives built into the emerging college debt bubble. Many have already been described in this thread.
1. Easy credit lures borrowers into too much debt, saddling them forever with non-dischargable loans after gaining non-marketable majors.
2. Colleges and universities budgets are bloated with resort-style facilities (the better to lure prospective students), overpaid and underworked administrators (faculty are now outnumbered by non-teaching staff), and reduced class teaching loads. The easy student loans enabled and incentivized this bloat.
3. Easy majors allow weaker students to coast through college in order for the students (and clueless parents) to brag about their degree. Professors in those weak majors have no incentive to warn their prospective majors about the realities of the job market.
4. Since the college experience indoctrinates students to more liberal viewpoints, the current administration has little incentive to put a stop to the abuse of credit.
There are other negative incentives, and sadly, they were all predictable.[/quote]
Absolutely 100% all true. And probably no one can see these things as clearly as someone that is/was in the educational system.
It just seems like a vicious circle that will be difficult to break unless there are some serious changes in the system. As you mentioned EconProf, there doesn’t seem to be any incentive for most of the players to want to change the status quo. The banks, Universities/schools, teachers, etc. all have an incentive to keep this going on.
