Replies to post #27415 on The Rising Influence of Rising Affluence

[n4807g]

Now how to get this type of practice applied across the educational institutions

Probably not in my lifetime. Powerful political block......

[10nisman]

“Perhaps the schools should have to underwrite student loans with the risk of default held by those institutions. That would be a real incentive to perform and provide a cost effective education.”

This makes little to no sense. Institutions are in the business of providing a quality education, and the vast majority of U.S. universities and colleges do just that. Institutions have fulsome application and acceptance practices to ensure qualified students are admitted. But, now you want institutions to have skin in the game on whether each of their qualified students actually pays their bills, and you think that will lead to a more cost effective education? How do you think the cost of default would impact the cost of education?

Today's tuition is based largely on supply and demand and expected return on investment... Every potential student assess their return on investment and decides whether to go to school or not, which school to attend, etc., and overall, ROI's will vary significantly across the spectrum --- some economic returns unbelievably high while others very low economically but might provide significant value to society (social workers, etc.). This is no different than investing, except now you want Morgan Stanley or Schwab to backstop its Etrade or Ameritrade individual investors who don't get a good return on their investment decisions.

It's one thing if an institution isn't providing a good quality education (i.e., Trump University), then yes, students / families should be able to recover damages from said institution. However, if someone gets accepted to Harvard, graduates with a liberal arts degree and $150k in student debt, and says screw it I'm going to turn down an I-Banking gig at Goldman to be a beach bum... You want Harvard to cover that student's laziness? That's absurd.

If you're going to do that, why not make retail stores, restaurants, etc., liable for consumers credit card debt? They shouldn't be selling goods to consumers that may not pay it back.

BTW, if you think you can provide a high quality education at a much cheaper price --- you should create your own private university. For some reason, nobody does this and I wonder why?