This still inflates the cost of university for everyone. Basically the govt is taxing society to funnel the money into student loans which are then ploughed into college facilities and administration staff.
It’s a massive misallocation of societal resources.
And I suspect many people earning a mediocre wage are still stuck repaying, and would have been happier had loans not existed and college have been forced not to be bloated.
Exactly, we need cost pressure. Not to mention the fact you would still have to go into debt and live with that psychological pressure until the government so generously decides to forgive you...
An obvious solution would be a comprehensive tuition cap for public institutions. Financial aid makes college more affordable, but allows colleges to raise tuition. Getting rid of financial aid could lower tuition cost due to market pressure but bring back the problem of affordability that it intends to solve.
I would like someone to point out why a tuition cap would be a bad idea, since regulation often carries unintended consequences.
one immediate unintended consequence I can think of is flattening the distribution of net tuition paid. For example, a 40k sticker price University might cost 40k to a wealthy foreigner, 25k to an upper middle class student, and be practically free to a poor student (after need based grants and scholarships, not loans). Tuition is capped at 20k, so suddenly everyone has to pay 20k, at least if the university wants to maintain the same income.
Of course, the numbers are already flatter than that at most public institutions but the general effect could still occur. Not saying tuition caps are necessarily a bad idea, but I can see potential downsides.
It’s a massive misallocation of societal resources.
And I suspect many people earning a mediocre wage are still stuck repaying, and would have been happier had loans not existed and college have been forced not to be bloated.