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/liberty/ - Liberty

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Ya'll need Mises.

File: b1bd8eaa3ba032b⋯.jpg (77.8 KB, 809x569, 809:569, Screenshot_20190313-232934.jpg)


what's the cause of this house debt and student loan debt crisis? why is student loan debt and household debt skyrocketing? why are people buying less houses? is it the government or a side effect of the free market?



>house debt

federal reserve low interest rates

>student loan debt

government laons


For future reference, the QTDDTOTT is here: >>97996

The answer to your question is the result of the degree industry getting subsidized from both sides. Widespread financial aid programs increase the ability-to-pay of every student, which causes the price to increase, similar to why inflation causes prices to increase. However, direct financial aid is relatively small when compared to tuition cost, so it's clear that there's more happening here. The other contributor on the consumer side is that even "private" student loans are almost all bought up by the government even if a private institution gives them out. Since the government will buy them up immediately, banks assume next to no risk when giving out student loans. This means they'll approve almost every application for a student loan, which increases the demand for student loans, and an increase in demand causes an increase in price.

On the supply side, private and public universities alike receive a healthy amount of government funding to subsidize their costs. As the government has an effectively infinite willingness-to-pay, any subsidized university can't go bankrupt, and there's no longer any incentive for universities to minimize cost. As a result, programs, departments, and hiring decisions which would be considered useless waste in an unrestricted market are approved without question, and university operating costs begin to balloon to ridiculous proportions. Further, government interference in other forms actively encourages universities to waste money on useless, nonproductive overhead. Thanks to Title IX and the flagrant abuses thereof, every university now spends millions on hiring diversity officers, setting up an evaluation system to deal with Title IX reports and similar accusations, gender studies departments, and other such subversive nonsense. And that's only scratching the surface of the subsidies provided.



maybe milenials take gender studies degree and then realize they dont earn money so they cannot pay debt

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