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View Diary: Obama focuses on actions to ease student loan debt in weekly address (38 comments)

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  •  Colleges don't loan to students in general. (2+ / 0-)
    Recommended by:
    dinotrac, HM2Viking

    Sallie Mae and others get the interest payments.  SLM is about 20% of the market.

    http://en.wikipedia.org/...

    I haven't read up on this bill so I don't know how a SLM is effected.  

    "The way to see by faith is to shut the eye of reason." - Thomas Paine

    by shrike on Sat Jun 07, 2014 at 07:52:02 AM PDT

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    •  That's not what I mean (1+ / 0-)
      Recommended by:
      Justanothernyer

      Affordability or perceived affordability is what keeps college tuition in check.

      When students take out student loans, they get a piece of paper that says "your post-college payment for this loan will be $X/month". The perceived affordability of X is what keeps base college tuition (somewhat) under control.

      Lower interest options lower X, perhaps a lot. But colleges already know from previous experience that students are willing to sign a piece of paper for $X a month, so rational behavior for them is to increase their tuition until the payment is again $X.

      So students are now in an even worse situation because costs that used to be interest payments are now principal balance. Good for overpaid college administrators, very bad for students.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sat Jun 07, 2014 at 08:32:06 AM PDT

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      •  There is that potential. Sad state of affairs if (0+ / 0-)

        supposedly non-capitalist colleges are charging what the market will bear.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Sat Jun 07, 2014 at 04:32:58 PM PDT

        [ Parent ]

        •  Well remember (1+ / 0-)
          Recommended by:
          dinotrac

          They are "non-profit" but have spectacular facilities and lots of high-paid administrators and star professors. Takes a lot of money to run that kind of operation.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Jun 08, 2014 at 06:41:28 AM PDT

          [ Parent ]

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