<p>
Wolv- I think you and Kay have reached common ground on this point. We would all pretty much agree to this, I believe.</p>
<p>MisterKâŠYep, I think we always had common ground on several points.</p>
<ol>
<li>The current system of university costs is outrageous and unjustifiable by any sane standard.</li>
<li>Universities, banks, and borrowers all share the blame for the excessive loans that have been issued and cannot be paid back.<br></li>
<li>Until universities lower their rates to a level commensurate with the rise of inflation over the last few decades, the root of the problem will still exist.</li>
<li>Access to adequate funds to attend graduate school/professional schools still needs to exist.<br></li>
<li>Fair and equitable lending practices are necessary, both for lenders and for borrowers.</li>
<li>A bailout of underwater borrowers is not an acceptable course of action. Regardless of who you place the bulk of the blame for this situation on, the taxpayers of this country are not responsible and should not be punished.</li>
<li>University rates wonât decrease until people start choosing more affordable options at local, state, or community colleges and major universities see a decline in enrollment.</li>
</ol>
<p>Finding the solutions is the tricky part.</p>
<p>The way it currently stands, if there is a bail out, I am not one of those getting anything bailed out which mean Iâll be doing some of the bailing. So absolutely, I donât want it to come to that.</p>
<p>Iâve found out recently that there are a number of high priced privates that are discounting their prices by giving some nice merit awards to truly average candidates. They are not the top name schools, but are some good opportunities. These schools are catering to those families who can afford to pay $50K prices according to formulas, but wonât do it. They have set a budget and are willing to pay $25, 30, 34, 40, maybe even 45K for their kids to go away to college in a nice college community/campus rather than to a commuter/suitcase big state school. They love that $5-10K scholarship and these schools are finding that they had better learn to survive with their costs reduced to that. When more parents refuse to borrow and only consider what they consider affordable options, and those options are lower than what the market will currently bear, then prices will go down. Not till then. Right now in my area, there are hundreds, probably thousands of families who are happy to pay BC the full close to $60K to send their kids their. Why should they lower their prices?</p>
<p>Cpt, I wouldnât get bailed out either, so we both better get our pailsâŠ:)</p>
<p>Your example of BC illustrates what Iâve said before about colleges eventually pricing according to what the market will bear. Colleges are in business to make money, no mistake about it. When full-boat enrollments peter out, they will get creative to snag likely subjects. Not that itâs a scam, itâs justâŠbusiness.</p>
<p>Flagship state Uâs donât have to worry about anything for awhile, until their own state legislatures (with no money) force them to raise in-state tuition so high AND admit higher percentages of OOS students that they price themselves out in correlation with the quality of education provided. Again, theyâve got 5-10 years easy.</p>
<p>Top 25-50 privates are OK for the time being too, because there are still plenty of very wealthy folk that will pay the shot, up to 60K per year, for their wonderful offspring to get their diploma & be off into their connected upper-crust world. And, as cpt said, if these LACâs canât get 60K, theyâll be happy with $50K.</p>
<p>Where the value will be going forward will be the other state schools and lesser-known or less âprestigiousâ privates. Candidates with top-notch stats will be able to make some good headway there.</p>
<p>It kind of reminds me of the housing bubble (again). In my area of Long Island people were lining up to pay $750K for homes â until all of a sudden they werenât.</p>
<p>In that bubble the people left holding the bag were the banks who made stupid loans and the people who over borrowed to pay those prices.</p>
<p>
Which ones?</p>
<p>Kayf, I just partially re-read this thread and it seems that your stance has changed dramatically. In the beginning, you felt a lot of empathy towards the commenters in the article,now you are unequivocally anti-bailout:)</p>
<p>hmm, say no, I think I have do have empathy, but would prefer no bailout. What do I want is to cram these terrible loans down the throats of the banks that made them. And next in line would be schools that encourage this excessive borrowing.</p>
<p>I donât think anyone on this thread has ever wanted a bailout - we just donât see eye to eye on how to turn this around.</p>
<p>I suspect somewhere there are cognitive studies on the spending behavior of consumers in a two-player system (such as buying a fancy car, where the dealer also acts as the financier for most) and a three player system where a third party provides the means to acquire the desired item (such as buying a house or an over priced college education). The extra player, in my mind, makes all the difference because it short circuits the consumers natural suspicion of sales claims made regarding the object of purchase, the focus is shifted to the âhow do I get thisâ rather than âwhy do I or donât I want thisâ.</p>
<p>If some business school hasnât already studied this phenomenon they probably should - the US is the land of the shiny automobile but somehow weâve avoided a âsports car bubbleâ for all these yearsâŠ</p>
<p>Interesting, bchan. Certainly, when it was like shooting fish in a barrel to obtain a mortgage, when 6 years ago you signed your name 10 times on a re-fi instead of 135 times like I did a few months ago, it brought more people to the table, whether they were financially qualified or not.</p>
<p>Similarly, currently itâs still pretty darn easy to obtain a college loan, for student or parent, and that continues to feed the beast. If we follow the above path of more stringent qualifications to obtain these loans as the years go on and the lenders wake up and act more prudently, the problem should take care of itself and people will out of necessity borrow or spend within their means, because thereâs no other way.</p>
<p>But if youâre saying that there should be âstupid policeâ out there saying, âHey, bud, this is a REALLY bad idea for you to do thisâ, I donât think thatâs gonna happen. Free will is a dangerous thing if youâre cluelessâŠ</p>
<p>I wrote a (joke) paper once for an econ class about how I thought the entire free market system (which is anything but free 
) was actually powered by a large furnace whose fuel source was gullible consumers depicted as clowns. Anytime weâd see someone make a foolish decision weâd say âAnother clown for the furnaceâ.</p>
<p>I can almost see that motto hanging in every university FA office and bank around the country. It would be nice if every borrower used common sense, every lender was honest, and every university got back to their primary charter of educating young adultsâŠbut when thereâs a seemingly inexhaustible supply of clowns available the furnace just keeps on chugging along.</p>
<p>jnm - totally agree that loans should not be handed out like candy - not a âstupid policeâ but lenders lending sensibly. The silly loans disappear, the bubble doesnât expand any further, and everybody is being encouraged to do what common sense, not emotion, would indicate is wise and prudent.</p>
<p>No more holding the carrot just out of reach while sharpening the stick into a lethal harpoon with the other hand! The current system only works because the banks are protected from risk.</p>
<p>Wolverine - clowns for the furnace made me laugh, thanks!</p>
<p>wolverine,do you still have that;iâd like to read it</p>
<p>saynoâŠSorry, that was back in the ancient days when we had to write papers on these antique items called typewriters. Of course, these days you could incorporate a Flash movie to accompany the paperâŠextra credit for visual aids!!</p>
<p>Sad to see nothing has changed much in the lastâŠahemâŠuhâŠâfewâ years since then. :)</p>
<p>The difference is in the dollar amounts which are now staggering. I remember being sick about what DH and I owed in school loans for an MBA as well as two ug experiences. It wasnât as much as what kids are taking out for one year in college these days. And itâs not like they are earning that much more either.</p>
<p>cptâŠIt would make for a good case study in todayâs econ classes donât you think? Do a cost/benefit analysis on several anonymous studentâs financial profile regarding their college education. Look at how much they spent, how much they borrowed, average starting salaries post-graduation, etc. Let them weigh the short term benefit against the long term implications on disposable income, credit rating, obtaining future credit for purchasing cars, homes, etc.</p>
<p>on the contrary, the dollar is predicted to lose a lot of value in the near future so the amount you borrow could be worth much less than itâs supposed to in a few years time
just saying</p>