We all hate the idea of bailing out the banks because it socializes the loss and privatizes the gain.
How is backstopping student loans any different ? The risk of default is on the backs of taxpayers and the student receives all the benefit.
Plus, because the government is pumping money into an industry, it increases the the amount of money people are willing to spend on educations and the cost goes up. And, they loan to anyone, not those who are most likely to repay the loan.
Thus, the government loan program seems to be the direct cause of the outrageous cost of education, which makes it more and more difficult for students to afford an education – which is the problem that the loans are intended to solve in the first place.
It is a perfect example of the government trying to solve a problem and making it worse because of the unintended consequences of their own actions.
Some limits or curbs have to be put in place or we will have ever more who cannot afford an education. Maybe the loans should be limited to degrees and colleges that turn out productive income-earning gradutes. Or we have hiring businesses backstop the loans and decide who receives them.
