Paul Combe: Student debt crisis goes beyond interest rates
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#1 Jul 1, 2013
The problem is that the mere fact that there is easy credit and access to these loans helps create tuition inflation. The schools know a third party will wind up paying for their tuition even the student is taking a loan it's that access to those loans that spike prices and lead to price gouging.
This is why many schools and colleges have financial aide offices that coach students who are chasing dreams to take out loans to pay for their dreams.
We give the high school student to much expectation and spend too much time selling them a career when they should be taught general jobs skills that keep one employed. High school students need to be taught the difference between a job and career. And that working a job is cool, it's ok you're not dumber because to didn't go off to school somewhere. High school students need to be taught things like basic accounting and contracts because when they takeout those loans they are signing a contract to pay it back.
Students and parents need to be counseled on post graduation employment chances but parents so eager to get their kids off on the right foot and don't want to interfere with their kids dreams-at least they're in school/college.
In the end though all these schools are pricing their tuition based on the fact someone else other than the student is paying for it. Wether it's loans, scholarships, grants, parents, va etc they rely on third party funding period. Thirty party funding leads to inflation because the person actually buying/using the product doesn't get to see or realize how much it's really costing THEM.
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