President Joe Biden has announced that up to $10,000 of student loans will be forgiven, and another $10,000 for those who were given Pell Grants, so up to $20,000 forgiveness for some people. The cost of this “student loan forgiveness” as announced by Biden will be approximately $300 million and it has to be paid by somebody. Guess who that somebody is. It is you. Even if you or your children did not go to college and/or even if you or your children went to college and you already paid for your college education, you will pay for this program.
Now let’s talk economics. In many cases the cost of a college education is highly overpriced for the possible return on investment. Many people owe well over $50,000 in student loans because of the excessive tuition and fees charged by colleges. This is all happening while most colleges have endowments that could help offset much of the tuition being charged. Let’s see the amount of some of these endowments: Harvard, $41 billion to $50 billion; University of Texas, $32 billion; Yale, $31 billion; and even the University of Virginia almost $15 billion. Believe it or not, colleges with these huge endowments still receive government subsidies.
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Folks, we are being suckered by these educational institutions as they continue to raise tuition while students go deeper into debt.
If a person takes out a loan to pay for an overpriced education, I don’t want to be on the hook for repaying for that person’s mistake and I’ll bet you don’t either.
Some possible adjustments that could be made would be to charge different tuitions for different degree programs. An example would be to charge more for an engineering major versus a philosophy major, since the earnings potential for engineers is much higher than for a person with a degree in philosophy, etc.
Another possibility would be to have the government get out of the loan business and leave that to the private sector, since I believe the private-sector lenders would do a better job of monitoring the loans they make. And ,of course, tuitions could be lowered since, in the past 10 years, according to several economic studies, tuitions have increased at a much greater rate than inflation.
If students and parents take a firm stand against unreasonable tuitions, especially at state schools, maybe tuitions will be set at a reasonable level.
I suggest that you contact your congressperson and ask them to help in seeing that reasonable tuitions are charged, especially at our state universities.
Who knows, maybe reason will prevail.
Dick Robers, Roanoke