BEGINNER

Student Loan Crisis

We have a crisis on our hands.

The Student Loan Crisis:

Government subsidies through student loans and grants have artificially inflated the cost of tuition in American higher education.  Similar to the housing bubble that was fueled by cheap and easy-to-obtain credit, student loans increase demand for degrees and inflate the price. Unlike the housing bubble however, student debt doesn't go away once you file for bankruptcy.    

 

Are Student Loans the Next Housing Bubble? by EconomicFreedom.org:

Related Freeman Articles

BLOG

Government Is Always the Answer, Even if Government Was the Problem

JUNE 25, 2014 by LAWRENCE W. REED

The President's plan to further subsidize college just repeats the mistakes of the housing bust--but what matters is that it will buy him votes.

THE CALLING

Bubbles, Malinvestment, and Higher Education

Artificially low interest rates wreak havoc again.

MAY 17, 2012 by STEVEN HORWITZ

Thus just as inflation induces people to invest too much in longer term production processes at the expense of consumer goods, so subsidizing of college induces people to invest too much in the longer term production process and higher order human capital associated with higher education.

ARTICLE

Why on Earth Do We Have a Student Loan Crisis?

Student Loans Are Largely a Creature of Federal Intervention

NOVEMBER 01, 2008 by GEORGE C. LEEF

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December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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