<p>Exactly. Some lower ranked colleges have already started losing customers, and thus are offering discounts off of sticker. </p>
<p>But IMO the largest factor in future college fees is that the student bulge will be decreasing. The number of HS grads has peaked and will be declining over the next decade or so. This will hurt colleges in the rust-best states the hardest (since those states have had little-to-no population growth recently). Watch for discounts to become commonplace in rural colleges first. Eventually, the college budgets will have to come down.</p>
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<p>While I believe that government loans won’t create a bubble – ala housing or tech – there are several studies by prominent economists that indicate that the availability of loans have led to a direct increase in price (aka tuition/fees).</p>
<p>The discounting is already happening in rust belt Iowa at the lower tier LACs. Small Iowa private colleges offer the largest average discount in the nation as per a recent Chronicle of Higher Ed article.</p>
<p>As an aside, this is probably not the greatest time to be starting off on a PhD with the goal of academics! Tenure track positions seem to be disappearing, and are being replaced by “lecturers”. Eventually, those will be replaced by online courses.</p>
<p>Just my fact-free opinion. (And I hope I’m wrong.)</p>
<p>“Studies done over the past several decades have concluded that the availability of government loans has not been a factor in rising college costs.”</p>
<p>I know of 4 top Chinese faculty (UC) who have resigned or taken 1/2 year leaves of absence to return to positions in China. In addition to higher salary, they prefer working in a more pure meritocracy.</p>
<p>Student debt is nearing $1 trillion. I don’t know…that looks like a pretty large number to me. </p>
<p>CNBC is talking about this.</p>
<p>Student debt is higher than crediti card debt. </p>
<p>“Americans now owe more on their student loans than they do on their credit cards. With debt now growing at a rate of $2,853.88 per second, it will surpass $1 trillion in 2012.”</p>
<p>"While private loans still make up a relatively small portion of student debtfederal student loans account for 28 percenttheir growth troubles Lauren Asher of the non-profit Project on Student Debt. </p>
<p>Private loans really arent a form of student aid. Theyre a very risky and expensive source of credit, Ansher says. </p>
<p>Like other student loans, private loans cannot be discharged in bankruptcy. Many have variable interest rates that can change with little warning, and some have even fewer consumer protections than government loans. </p>
<p>Theyre a much more dangerous way to pay for a college education than certainly grants, which you dont have to pay back, or federal student loans, which have lots of options for how you can pay them back, says Asher. </p>
<p>Among the fastest growing private lenders are for-profit colleges, many of which have set up their own lending arms or contracted with other private lenders to keep credit-strapped students from dropping out. </p>
<p>The private loans offered through the institutions typically carry variable, double-digit interest rates, as compared to a federal Stafford Loan , which contains a fixed rate of between 4.5 and 6.8 percent. Like many government loans, the private loans typically accrue interest while the student is in school, but some private loans do not allow the student to pay that interest until after graduation. </p>
<p>But not all private loans are created equal."</p>
<p>What does this mean? There are federal loans and there are private loans (which, I think, would include institutional loans)…what other student debt could be making up the difference? Credit cards? Personal loans? I would think these are usually harder to come by for most students.</p>
<p>I’m more concerned about the default and delinquency rates than the total amount borrowed. There has been little consistency in the data collected and the effect of defaults (and delinquencies) although I’ve recently seen more news stories surfacing. This study appears to be one of the few reports that actually tracked a large number of loans through a reasonably long (5-year) period…for those who don’t want to read it, here are the numbers for borrowers who entered repayment in '05, without analysis by degree/institution type:</p>
<p>good question, dstark, but the ‘article’ did not say. It just ‘speculated’ the decline was due to folks paying down debt in the tough economy and the tightening of underwriting rules. Back in the old days, for example, credit card companies would flood college campuses with applications, but now it is extremely difficult for a college kid to obtain a credit card unless they have a real job.</p>
<p>I was just wondering because I know a couple of people that are never going to pay back their credit card debt. One filed for bankrupcy and over 100,000 of credit card debt was wiped out. </p>
<p>Another owes 85,000 and that will never be paid back.</p>