Education loans: The Sweeping Federal Takeover You May Not Know About. One quote:
...perhaps the most troubling aspect of this new federal intrusion in the higher education marketplace is its underlying assumptions about the best way to control college costs. Whether it has been efforts to increase Pell Grants, or now this student loan fix, President Obama and his allies in Congress, driven I believe by the best of intentions, have assumed that increasing federal aid will help students better afford college. And there is no doubt that college costs have skyrocketed recently, more than doubling the rate of inflation over the past twenty years. However, every time the federal government has increased aid to students, colleges have turned around and raised tuition and fees accordingly.
Similarly from Michael Macchiarola's ''Too Big to Fail'' Goes to College:
Aided by the government-encouraged extension of credit, education costs have skyrocketed. In fact, it is fair to describe today's higher education price tag as having been reduced to a formula - where tuition seems to equal all the money a student can pay plus all the money a student can conceivably borrow. And, this same access-for-all government policy has made loan-eligible middle- and lower-income students easy prey for aggressive higher education and student-loan marketing. The end result has been an unprecedented, debt-fueled wealth transfer from students of modest means to the increasingly affluent higher education industry and its student-loan lenders. Unfortunately, as this damage continues to reveal its depth, its consequences are likely to become more evident by the day.
A generation of students has been reduced to the equivalent of the underwater homeowner: resigned to a fate where the amount owed to finance their schooling might be greater than the value of the education they received (and, therefore, beyond their capacity to repay it).
Government student loans and grants are little more than indirect handouts to the academic institutions in whose pockets they end up.
Tracked: Jun 22, 13:22