Monday, February 23, 2015

The student debt crisis is first and foremost a consumer protection issue

According to the New York Fed college debt and delinquencies are reaching crisis levels.
Commenters uniformly opine on the "student debt crisis" but the crisis really isn't caused by students taking on too much debt as it is by colleges conning too many barely of age kids into buying more years of "education" that won't pay off and then quadrupling the real cost of that education while delivering the same product.

We have a consumer protection issue: so called "not for profits" have misled students and profiteered off of their naive desire to better themselves. And because they are NFPs they are getting a pass from the press and the government. They even have ginned up their own economic theory "Baumol's Cost Disease" to justify why college (along with K-12) - alone among all information services - is experiencing  rapid inflation while all other information services experience rapid deflation.

We need to break the college cartel's back by reversing the current administration's policy of ever greater subsidies promoting more and more useless college attendance. Before they rape everyone's kids.

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