Mises Wire contributor Kevin Van Elswyk, in his November 29 article "Student Loans: The Continuing Crisis That Is Getting Worse," nicely summarizes the current confusion and scandal of federal student loan programs, which at this point appear a miasma that will likely turn into an outright student grant program as more and more of these loan balances are forgiven.
As Milton Friedman told us, "If you want more of something, subsidize it; if you want less of it, tax it." In this case, the "It" is college attendance, and the "Subsidy" takes the form of student financial aid, particularly federal student loans.
Guaranteed Student Loans were private bank loans, not federal government loans.
Fast-forwarding to more recent years, it became apparent that not only was the federal student loan program not making a profit as anticipated but was becoming an albatross around the government's neck as marginal returns on investment in college degrees didn't automatically produce more favorable earnings for college graduates after all, and borrowers were struggling to make their required monthly loan payments.
There is a direct relationship between student financial aid-particularly student loans-and rising tuition.
It has become clear in recent years that the existence of federal student loans has given colleges and universities an open invitation to increase tuition.
It is clearly not acceptable to forgive outstanding loan balances, forcing all taxpayers-including those who did not attend college at all, or who attended college without the benefit of loan financing, or who attended college on loans and have now repaid them-to bear the cost.
https://mises.org/wire/federal-student-loans-drive-college-tuition-levels
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