<p>
</p>
<p>But you’re missing the point: who is benefiting without paying?</p>
<p>I don’t really want to lecture everybody on the economics of private goods vs. public goods, but unless everybody has a basic grounding in economics, this is a pretty asymmetric conversation, so I think I’ll stop talking about the desirability of government funding for occupational training. I suggest everybody do some reading on this from credible economists before forming opinions. What sounds good isn’t always the same as what is good.</p>
<p>
</p>
<p>We were talking about public, state-funded universities, but the higher education bubble has many sources and is expressed in different ways.</p>
<p>As for private schools, one point to make here is about the moral hazard going on. Just like during the housing bubble, it is the <em>expectation</em> that the government will bail out any defaulter debt-holder which removes the incentive for creditors to be more careful about who they loan money to. As of now, virtually nobody is turned down for even private student loans because the government has been shelling out more and more money and has been buying up more and more loans.</p>
<p>So even private lenders see this as a way of making money, not by getting payments on student debt from graduates in the future, but in hopes of lending out money and selling the debt to the government–or waiting for the government to bail out the graduates–when things go south.</p>