“Unlike other kinds of debt, student loans can be particularly hard to wriggle out of… ditching a student loan is virtually impossible, especially once a collection agency gets involved. Although lenders may trim payments, getting fees or principals waived seldom happens.”
Some governments believe that the future of their country lies in a well educated healthy population. With this in mind they make post secondary education free (tax payer subsidized, remember) to all who wishing further education as long as they can pass the academic standards and complete the course in the allotted time frame.
Without the worries of incurring massive debits or mooning lighting in minimum wage jobs after hours to pay expenses, students can concentrate on their studies. Upon graduating, student who are loan free, will not be forced to find just any kind of work to keep the lending institutes off their back.
Starting into the work force with thousands of Dollars of debit is not conducive to the students mental health or a healthy nations, it is a form of economic slavery for the students and degeneration of a nations competitiveness.
While this sounds like a good idea — that is, having education tax payer subsidized fully or partially — you should look at the ultimate alternative and that is having tuition as low as possible. Why is it as high as it is now? Mostly because education has become a government monopoly represented by public service workers’ unions who refuse to negotiate with the prevailing market conditions. How could they? Unions and governments are monopolies of power. This is not a hit on unions, but it brings up a good point that many countries’ educational systems are constantly threatened with striking teachers and educators who should be considered “essential services” just like police who cannot strike.
Why not make publicly-funded educational institutions “essential service” workplaces where employees there cannot strike? This certainly would lower tuition costs for students as the unions would not be able to hold the state by the proverbial testes. In the same vein, why not make more market incentives in this sector of the economy and allow more privately (or public-private) institutions to open up and compete with other similar institutions? Take a look at these graphs showing how much tuition has increased throughout the years in the USA and other countries:
Comparing public vs. private insitutions we see that the latter is often more expensive simply because it is attended by only select groups of people who can afford it while the others are forced to attend public institution which are afforded by tax payer money. What if more private colleges were allowed?
The $555,000 Student-Loan Burden
As Default Rates on Borrowing for Higher Education Rise, Some Borrowers See No Way Out; ‘This Is Just Outrageous Now’
By MARY PILON Wall Street Journal
When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.
It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.
“Maybe half of it was my fault because I didn’t look at the fine print,” Dr. Bisutti says. “But this is just outrageous now.”
To be sure, Dr. Bisutti’s case is extreme, and lenders say student-loan terms are clear and that they try to work with borrowers who get in trouble.
But as tuitions rise, many people are borrowing heavily to pay their bills. Some no doubt view it as “good debt,” because an education can lead to a higher salary. But in practice, student loans are one of the most toxic debts, requiring extreme consumer caution and, as Dr. Bisutti learned, responsibility.
Unlike other kinds of debt, student loans can be particularly hard to wriggle out of. Homeowners who can’t make their mortgage payments can hand over the keys to their house to their lender. Credit-card and even gambling debts can be discharged in bankruptcy. But ditching a student loan is virtually impossible, especially once a collection agency gets involved. Although lenders may trim payments, getting fees or principals waived seldom happens.
You can read the full article from Wall Street Journal