Students Defaulted Or Didn’t Pay Down Student Loan Debts

 By Seth Connell – Re-Blogged From http://blabber.buzz

If you thought the housing bubble was bad, just wait for the impending collapse of the student loan industrial complex.

Dept of Education Reveals HALF Of All Students Defaulted Or Didn’t Pay Down Student Loan Debts

Last Friday, the U.S. Department of Education released a memo stating that the department had overestimated the number of graduated students from colleges and trade schools actively paying off their loans.

The updated numbers provide a shocking view into the current economic situation, but also what will be coming in future years.

The Wall Street Journal analyzed the numbers released by the Dept. of Education, and found that the repayment rates were inflated in 99.8% of the schools analyzed.

Before going any further, just let that sink in for a moment. This was not a small technical glitch that skewed numbers in a couple of cases. No, the correct numbers were the stark exception to the rule, and that rule was that the true numbers of loan repayments were never reported truthfully.

Yet for the past several years, the Department has maintained that students are repaying their loans at a rate that is just dandy. Well, by the Department’s own admission, that is not the case (and I am not in the least bit surprised).

The new analysis shows that at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years.

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Return to Free Markets

cropped-bob-shapiro.jpg   By Bob Shapiro

The workings of the Free Market hasn’t been taught in our schools for generations. That being the case, many (most?) Americans lack the background to understand just what the Free Market is capable of achieving – or even understanding that what the US Economy is, is not a Free Market Economy in the true sense.

Lip service is paid, with various socialist economists saying such foolish things as, “We have a mixed economy – a partnership between the private and the public sector.” But in reality, when one partner has the ability to control the activity of the other, then it’s not really a partnership – it’s a command economy.

'Sure it's a partnership, Elwood, but it's a limited partnership, and you're the one who's limited.'

One problem for most Americans may be summed up in a statement I’ve heard several times: “If the government didn’t do such and such, it just wouldn’t get done. Nobody else has the strength of purpose and the resources to do that function.”

So, let’s imagine for a moment that all the computer gear in the United States – all the CPUs, the screens, the routers and modems – everything, was made by a single manufacturer, and that organization was owned and run by the US government. Prices might be the same as today, with the higher costs being subsidized by taxpayers. I expect that the wide variety of choices simply would never have been created, and the technology would advance little or not at all.

If some “nutcase” were to suggest privatizing this business, he would be laughed off the stage. “It’s too complex for private companies to do.” “There would be duplication of effort on a massive scale.” “Nobody could afford the capital investment.” “Prices would skyrocket since taxpayer subsidies also would end.” “The profit motive will hurt consumers as greedy owners will put out stripped down products at exorbitant prices.”

Greedy Businessman

Does all that sound familiar?

As we know with the benefit of what actually has happened in the computer industry, it not only is possible – is has offered amazing innovation at a breakneck speed. Not every company has survived, which is another way of saying that the best have survived.

Could there be improvements? Of course. They’re happening all the time. If today’s leader doesn’t make those improvements, then it won’t be tomorrow’s leader.

Is innovation in the product or service, in the cost to provide it, and in developing alternatives, something which exists today only in the computer business? I suggest that this is exactly what the Free Market does if the government – the senior partner – will just step out of the way.

I’ve posted on getting rid of the US Department of Education recently. But how about just privatizing education completely? Could the Free Market do better than a couple of generations worth of a stagnant or falling level of educational achievement – and that poor performance at five times the real cost of a couple of generations ago?

Greedy managers won’t care about the kids.” “They’ll provide one size fits all education.” “They won’t cater to the disadvantaged, the gifted, or the challenged students.”

Free Markets

These are the same fallacious arguments, using somewhat different words, that we heard when we looked at the computer industry. However, on closer inspection, we see that these arguments apply more to today’s dysfunctional education system than to the dynamic – if seemingly chaotic – choices which a Free Market would provide at lower cost.

I chose to look at privatizing education because this is where the workings of Free Markets – of Free Enterprise – are being hidden from our children.

Without an appreciation of the economic system which has provided the riches we now enjoy – riches which our leaders are squandering – the US will just continue down the road to being just another socialist, third world country.

Department of Education Proposed Spending Cuts

By Chris Edwards – Re-Blogged From http://www.Cato.org  http://www.DownsizingGovernment.org

The Department of Education should be closed and its programs terminated. The main activity of the department is to provide grants to state and local governments. However, channeling taxpayer dollars through Washington and then back to the states is an inefficient way to fund local activities such as education. It would be better if the states funded their own education programs free from all the paperwork that comes with federal aid.

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K-12 Education Subsidies

By Neal McCluskey – Re-Blogged From http://www.downsizinggovernment.org

The Department of Education operates a wide range of subsidy programs for elementary and secondary schools. The aid and related federal regulations have not generally lifted academic achievement. The department also subsidizes higher education through student loan programs. Unfortunately, that aid has fueled inflation in college tuition and is subject to widespread abuse.

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Not Another Liberal Republican

cropped-bob-shapiro.jpg   By Bob Shapiro

I read a piece which gives a very unflattering picture of Jeb Bush as little more than a catch-up version of Obama and Hillary Clinton. He calls for the Republicans to stop putting up “me too” candidates and actually offer American voters a choice on policy.

The possibility of a Jeb Bush, Chris Christie, or other liberal Republican being put up – again – as the party standard bearer in 2016, dismays

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