Spring Ball/General Discussion (& Happy Birthday to Me)

This is true in student loans. That demographic was actually the most stable during the housing bubble. One of the two demographics most susceptible to predatory lending in that case was those who were not in need of sub-prime lending but were not well enough “to do” to realize they didn’t need the scheme to purchase. And the biggest default demographic was the actual well to do who were driving the market with investment purchases but protected from personal liability by corporate personhood. Let your listed corporation go under, and your personal liability goes away.

That’s why student loans can’t be forgiven.

I knew what you were saying. I just wanted to clarify and differentiate the demographics involved in known bubbles. Student loans are similar in structure, but those who default are different because the predatory practices of lenders is very similar to credit card lenders.

And blaming your standard four year public college for the inflation of tuition, room and board over the last 15 years is just dumb. For-profit universities are the first to blame. They supply more than 60% of all student loan defaults, and that number rises every year. They provide useless degrees to people who otherwise would not have sought them if they weren’t contacted off the same call sheets credit card lenders use. For-profit “schools” have marketing departments who call prospective students “leads” and contact them by cold-calling them. And 90% of those who attend these debt factories receive 100% of the financial aid available to them. Worse than that, they spend four years doing so without the realization that after “graduation” they will be lucky to get the same jobs they had before they decided to attend “school” full time.

The second group of schools to be blamed are the diploma mills. Some are well-meaning but poorly run (Chicago State). Some are former vocational/tech/comm colleges who saw an opportunity about 20 years ago (when lending practices were deregulated) to suck public funds into state coffers by acting as the for-profits do (Utah Valley). Some are private religious “schools” who promote whackadoodle degrees because all those sciency schools are wrong… and hard to get into (Oral Roberts… University? Really?).

I pick on ORU because its tuition is 20K per year; it accepts just about anyone who applies to it; it’s six-year grad rate is about 50%; it’s small; it’s a pretty poorly rated degree. In other words, it’s the Harvard of whackadoodle schools, only it costs not so much more than others who operate on the hybrid whackadoodle/for-profit model (Liberty) with gobs of under-educated non-graduates incurring debt every year.

Your standard four year institutions are guilty of being under-funded during a run-up in costs. That makes them go to funding mode instead of focusing on their missions. If anything, the most guilty are the private institutions who equate cost with prestige. Their arms race to stupidity veiled the for-profit/diploma mill/whackadoodle lobby efforts for banking deregulation in student loans. Now the cost of OSU is almost four times what it was when I was in school (compare that to X4 for private schools, X3 for medical costs (the next bubble) or X2 for the CPI). Now throw in referendums like Prop 13 or Measure 5. Add the boom and bust of a deregulated monetary-based economy. States have no choice but to defund everything they once provided, passing the cost to the consumers of these services instead.

These bubbles are the hidden taxes we once didn’t have to pay. Get used to them. They are what anarchy does to the market. Large bureaucracies exist in the form of corporations as well as government. The only difference is that they have a profit-motive, and that motive turns into a thirst if unchecked.