Regrettably, that model also saw higher education even more restricted to the children of well-off families.
That’s not necessarily true. There was a time when it was possible for someone to get through a private school with some combination of scholarships, grants, parental funds, part time jobs and loans, then graduate with a student loan that was about the size of a moderately expensive car. I should know, I was one of those students.
For those without parental assistance, they could go to the public schools in many states and it was still possible to get out with modest loans at most. Work part time while going to school, it was possible for the part time employment to provide a considerable portion of the expenses.
Not anymore. The loans are guaranteed by the government so the private entities love to make them because they’re going to get paid no matter what. The colleges love the additional money coming in, how do you think all those college administrators get so well paid, how do you think so many new (and expensive) facilities got built. Understand something here: that additional money is coming from the student loans and not going back into student instruction. I haven’t stepped on my college campus in many years, but I’m told I wouldn’t recognize a substantial portion of it anymore. So when they call me for donations, I tell them to stuff it, I donate to far more deserving entities.
As the amount of credit made available for college expenses rose so college costs rose to meet the newly available credit. No other way this was going to turn out. Whether the creditor is a private entity or the government, they love being a creditor because with the change in bankruptcy law making it almost impossible to discharge the loan, they got the student on lockdown and can strip his assets at their leisure. In other words, the OP’s paycheck isn’t his, he’s making the money for the entity holding his loan. Pretty much for his useful working life. What’s right about that? The students might get a 25 year forgiveness? Well the government is not done with him! There’s still the IRS to pay for that loan forgiveness considered income! Nothing like a parting shot that really smarts in the wallet.
In short, it’s truly evil what has been done to students like the OP.
Further, many students are steered to college who shouldn’t be, who would be better off attending vocational training or apprenticing themselves to trades instead. But there’s no money in that for colleges, banks or the government, so they do their darndest to steer as many students as possible into the college route where these kids can get their pockets cleaned out. As part of that, these kinds of trades don’t get the good press that colleges do. Read Mike Rowe sometime…
The answer is not in more loans, not in more government subsidies. Those courses of action are simply aimed at keeping the money gravy train flowing to the colleges, helping them continue to raise their prices, nothing more. The answer is in the following actions: (1), get the government completely out of the student loan business; (2), encourage students more suited to vocational training and apprenticeship to pursue them; and (3), student loans should not be guaranteed anymore, they should be dischargeable in bankruptcy. That would force lenders to actually evaluate students for their ability to pay the loans back. That would force lenders to charge higher interest for the risk. Which in turn would result in a considerable reduction in the money made available to colleges. Which is horror to college administrators and boards as they would be … shock! gasp! … forced to cut budgets, salaries, positions and tuition just to survive.
