Cost of college and financial aid

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Is it possible that the cost of a college education and the financial aid available for it are in a positive feedback cycle? Increases in available financial aid I think lead to increases in the cost of college education. Whatever amount is willing to be shelled out is precisely what schools want to take, so they'll adjust their arbitrary costs so as to maximize their income, often at the cost of students being required to take on permanent loan debt. IDK, is it possible that this could explain how incredibly expensive college is? Or do people think that a 4 credit hour class using a coffee table book for a textbook is worth $2,000 somehow?

I am not really sure, I know I would have no way to be in college and no income whatsoever if it was not for college loans and grants. But there is no way for me to be sure I will find a job that pays enough to pay back the loans...so it's kind of a gamble I suppose but If I don't well they can't take from me what I don't have. There probably are ways to improve this system but I am not really sure how that could be done.

That might be part of it, though I think the universities still get the money that they say they want even if you have financial aid. If I understand correctly, my full-tuition scholarship is funded by private donors, so the university isn't actually giving me an education at no charge- someone, somewhere, decided to foot the bill.

Actually, haven't there been cases of people unable to pay student loans having what property they do have taken from them and/or having them placed in prison?

Yes, TANSTAAFL.

I found a website about the consequences of defaulting on a student loan and they are financial, not prison:

http://www.nolo.com/legal-encyclopedia/ ... 29859.html

We don't have debtor's prisons (isn't there a sinking thread about that?). But financial consequences still mess up your life.

Why do I think it's so expensive? Because people try so hard to get in. The more applicants a school gets to turn away (because so many are trying to get in), the more tuition it can charge. It is a sellers' market, more so than any other commodity. I can't think of any other commodity so fiercely fought over than entrance to college. This is supply and demand in its' purest form. If you want to pay a reasonable tuition, you have to go to a college that few others want to go to, that is scrabbling to attract the students who were rejected from more elite colleges.

And yes, I agree that this is enabled by the financial aid industry. If people only applied where they could afford to pay tuition out-of-pocket, the price of mid-level colleges would go down. People would be limited by a combination of what their parents could chip in for and/or what they could pay for while simultaneously working. That would mean a lot of people would take 6-8 years to complete their degree (being able to only afford/have time for a few classes at a time) or be limited to what their parents could afford.

High-end colleges would still be ungodly expensive and would function as the sort of sanctuary for the wealthy that they started out as. But I bet you would see a drop in the tuition of mid-level colleges. Of course they would axe programs and higher less qualified professors (or "professors") right along with that drop. But they wouldn't be able to support themselves at the current tuition rate since the only people who could afford it would be the wealthy who academically couldn't get in to the high-end colleges. And there aren't enough wealthy kids to support the U.S.'s giant number of mid-level colleges.

if a 4 hour course costs 2000 dollars...I would run to the hills.

Yes. Increases in loans also increase the cost of a college education. Plentiful aid and loans for the student do not give enough of an incentive for the universities to lower their costs.

For the University of California system, if they raised the tuition without raising the financial aid then the majority of students would be forced not to attend. And then the University would have lost it's main revenue. So there is an incentive to provide some financial aid for the students.

Unfortunately, now financial aid is drying up so instead of lowering the tuition for students by cutting off some of the fat, they ask the government for more loans. Education will be the next bubble.

When I see an art major or some other dead-field major $45,000 in debt, they are going to default. It's the governments fault for lending to people who have no chance of paying back.

The analogy to the housing bubble is very apt. It will pop. You can't pay that loan back as a Starbucks barrista. Defaults on student loans will happen as surely as defaults on mortgages did. Hoepfully the consequences won't be as dire. I don't know enough about economics to guess the consequences of large scale student loan default.

Technically, you cannot default on a government student loan but people still will. Like others have said, you cannot squeeze blood out of a rock or in other words if people don't have the money to pay back you cannot expect to be paid back.

I don't think the government is realizing that yet, because they just came out with a new loan due to the tuition increases at the UC system. My University, to avoid more student fees, cut the administration of the colleges. Now if only they will cut the gym and other entitlements I never use...

I think the consequences will be good and bad. It will get to a point that the government will make it harder for students to get loans so students will be forced to leave, which the public universities don't want, and so they will cut the fat. Services might not be the best but at least it is affordable.

College will become an investment (if it is not already) instead of something that is required which will weed out the druggie-party kids who feel pressured to be there by society, and allow the hard working passionate people to stay. So it will increase the value of a college degree.

My guess is that there will be a whole lot of people, who have pieces of paper earned by churning out busywork that kept them occupied while they served as their college's cash cows, who can't find work in their field because there's too high a supply of similarly credentialed applicants, can't find work at more common jobs because they are "over-qualified", can't afford anything because of their financial situation, and will probably be fairly ticked off at a system they thought would be their ticket to success or something like that. As for it's economic effect, it will be adding to the percentage of unemployed and further contributing to making the economy in general into an employer's market which sucks for everyone else.

I think this would also explain part of the reason healthcare is so expensive nowadays.

lol what property are they going to take? I don't have anything worth anything....and how can they put me in prison because the economy or my mental issues prevent me from getting a high paying job.? Yes obviously it would be great if college does help me get a decent enough job.......but I cannot predict the future.

I guess if they try that the fact I have mental problems is a good thing that might interfere with the whole prison thing....but I don't see what they would expect to accomplish by putting someone in prison for not being able to pay back college loans(I can always defer the payments as well.)

I think there are more then druggie-party kids who feel pressured to be there by society and hard working passionate people......there are lots of variations actually especially at community colleges. But when we start trying to say who can get an education and who can't it starts looking like facism actually.

Here is another option: run up as much student debt as you want, and then emigrate and never, ever look back.

Yeah, now that sounds moral....