‘Let Them Eat Teslas’
April 3rd, 2013Why are tuition costs so high in the first place?
Government Inflated the College Loan Bubble:
The real problem is that we’ve been running a higher education bubble, one that — like the real-estate bubble — has been pumped up by cheap government money. Since 1999, student loan debt has increased by 511%, while disposable income has increased by only 73%.
That’s because when the government subsidizes something, producers respond by raising prices to soak up as much of the subsidy as they can. College is no exception. Tuition has been increasing much faster than disposable income, and families — believing that a college education is a can’t-lose investment, much as they used to think houses were — have been making up the difference with debt.
Never mind all of that. The Slashdot hive mind instead seizes upon the stupid government subsidies on the car, which are going to be noise level compared to the trillion dollar student loan boondoggle.
Now, who’s making the easiest money from all of this nonsense?
It’s the usual suspects: The banks.
Via: Slashdot:
“If you’re a bright kid who wants to prepare for the 21st century workforce (PDF) by studying engineering at Purdue, the government will help your parents pay the $100,000 or so tuition tab with a 7.9% interest loan (plus 4% fees) that’s likely to be non-dischargeable in bankruptcy and paid back with after-tax money. If, on the other hand, you want to buy a tricked-out $100,000 Model S, Tesla has teamed up with the government, Wells Fargo, and U.S. Bank on what it calls a ‘Revolutionary New Finance Product’ that enables those who play the game right to avoid paying sales tax, get the government to pick up the first $15,000 (no down payment needed!), and also receive a 2.95% bankruptcy-dischargeable loan for the balance, the payments for which could be tax-deductible. Yep, ‘Revolutionary’ may be about right!”
In Other News: Obama Administration Pushes Banks to Make Home Loans to People with Weaker Credit
