I suppose one could say that the issue is less one of pumping insufficient money, but pumping it the wrong way. If the funding were simply a subsidy for specific state schools such that they could reduce sticker-price by x for all students, that'd be far less distorting. While it doesn't have the feedback that just making people pay up-front has, it does have some political pushback against cost increases. The Stafford Loan process not only insulates the consumer from the cost of their choices until well after the choice is made, but it also is insulated from any political oversight, because it's just 'do you qualify for any loan? yes? you get your money now' with only the barest criteria for determining if the loan is appropriate.Warren wrote: ↑18 Jul 2017, 12:30???Hugh Akston wrote: ↑18 Jul 2017, 12:15NY Fed argues that high student debts are responsible for lower Millennial home ownership rates.Looking at nine student cohorts, they concluded that the increase in public tuition and resulting student debt can account for anywhere between 11 and 35 percent of the decline in home ownership for 28- to 30-year-olds in the years between 2007 and 2015.The paper also finds that there isn’t a significant relationship between increasing tuition and the number of students seeking higher education — perhaps a sign of the increasing necessity of higher education in attaining living wage work. “Students’ price elasticity of demand for higher education is quite low,” they conclude. “As college costs increase, American students do not forego education, but instead amass more debt.”The second finding, the researchers caution, shouldn’t distract policymakers from the first one. “To the extent that the ongoing de-funding of public higher education has not been met, according to these estimates, by significant declines in educational attainment, some policymakers might be tempted to infer that de-funding public higher education is costless,” they write. “However, our estimates indicate that the cost of shifting the burden of funding higher education onto the student may arrive with a lag: Early homeownership, in our empirical models, appears responsive to the costs of higher education.”
So the problem of skyrocketing cost of higher education is the government isn't pumping enough dollar bills into it?
So by pumping the money in directly, it might actually rein in costs far better than the current Stafford process.