It is sadly humorous to me, but not surprising, that Elizabeth Guevara, writing for Investopedia, can only seem to offer one solution for young people considering college, now that there is a cap on available federal student loans. From a new article via Yahoo Finance:
New Student Loan Limits May Force More Borrowers to Take Out Private Loans
The ‘One Big, Beautiful Bill’ will restrict the amount of federal student loans available to college students next year. Students may have to take out riskier private loans to cover the rest of their schooling.
The average medical graduate student will not be able to take out enough federal loans for the cost of their school and will likely have to take out tens of thousands of dollars in private loans.
Some families who take out Parent PLUS loans will have to use private loans, which typically have higher interest rates and will cost them almost $5,000 more in interest during repayment.
Guevara didn’t think that maybe the kids should go to a cheaper school, a junior college, a vocational school, not go to college at all, or, heaven forbid, that colleges should reduce their highly inflated costs?
Here is an abbreviated history of student loans:
Government subsidized student loans got put on steroids in 1965, to (supposedly) make college more affordable.
In 1965, the average annual cost of tuition and fees at a 4-year public university was around $350, while private colleges averaged $1,000–$1,200 annually.
As colleges used the largesse of the government to bloat their staff and rapidly raise prices, the government just kept throwing more money at them. They never sought to control costs.
In 2009, Democrats decided to “fix” the problem with student loans by guaranteeing them. They again pretended that this would increase affordability, and further pretended that this action would bring in substantial revenue for the government, so they could falsely claim that their prize jewel, Obamacare, would be paid for.
Obama and Biden also decided that colleges needed more help, so they decided it would be a great time to destroy for-profit colleges, because their students didn’t get the results they thought they were promised. Of course, public and not-for-profit colleges were not held to the same standards, because they are a de facto arm of the Democrat party, indoctrinating students with talking points on climate change and everything else “progressive” and left. This is why so many young people falsely believe that socialism and communism are viable systems.
COVID gave Democrats another great opportunity to buy votes. They decided that students didn’t have to make payments on the money they borrowed. This moratorium lasted for years because Democrats didn’t care that most of these people were employed and could afford the payments. Who cares that the taxpayers didn’t have any money to support this generosity—current and future taxpayers could just pay the debts of others.
Then, despite the SCOTUS continuously telling Biden that he didn’t have the authority, he dictatorially and unconstitutionally “forgave” hundreds of billions in loans. Somehow, the media never called Biden a dictator, or lawless, and Democrats didn’t raise concerns about separation of power or abuse of power. Nope, they cheered! Not once did they suggest that colleges should pay some of these loans since they are the ones who benefitted the most.
By 2025, because of the government’s unlimited generosity, the tuition at a public university had soared over 33 times the amount it was in 1965, going from $350 per year to $11,610. Private college tuition has escalated from $1,200 per year to an average of $43,505, or up 36 times. Average inflation for this sixty-year period would have caused prices to be around ten times what they were in 1965, but college costs have risen three times as fast.
Yet, the media and other Democrats decry the cuts in the amount students are allowed to borrow. It is no wonder the country is so broke when the government is so generous to special interests, and any cutbacks are met with hysterical opposition.
Image generated by AI.