Student loans are a blessing to some, but abused by many. Instead of living a
spartan existence, too many students use their loans to live in nicer apartments
than they can afford, to eat out too much, to take too many trips home, to go on
expensive study abroad programs, to own too expensive of bikes and/or cars, and
to generally live way beyond their means.I saw it when I was in
college years ago, and by the age of the cars that some of my younger friends
and relatives have, it appears that it may be even worse today.It is
great to help make education affordable. But much of the money ends up in the
hands of professors, administrators, etc., or even worse, ends up being spent on
lifestyles that are beyond the students means, now and in the future. And
taxpayers should not feel obligated to subsidize these lifestyles.
"Not everyone agrees. Among the resistors are those who fear that fair-value
accounting will make books look bad and constrain the government from pursuing
social policy through lending."This arguement has nothing to do
with the actual financial risk and everything to do with pushing political
The student loan program and President Obama touting college for everyone is
ridiculous, if after college there are not jobs, let alone good-paying jobs, to
support the debt. College loans help colleges become bloated behemoths with
their own incumbents and tenure that like government, need ever-increasing
monies to support their gluttonous growth. It is almost better to use the
borrowed money to buy a going-concern business, earn a good living, and further
education part-time and online. Topping the abuses off is the college graduation
rate that hovers around 50% so that debt to not complete college borders on
foolish. The Bible sees it that way as well, describing someone that starts
construction without the wherewithal to finish the job, exposing the builder to
ridicule for starting what could not be finished. The government college loan
program is another failure of government thinking that individualism is
inadequate, and government alone can lift people out of poverty, which itself is
a very abused word in this godless culture.
All you need to do is read articles about the new luxury dorms many colleges are
building. Saunas, hot tubs, pools, etc. Some collegestudents are living a
higher life style than they could afford with a job. People like to complain
about thw rich getting richer and the poor getting poorer. It is mostly a
matter of behavior. If you spend more than you make you will eventually be
poor. If you save, you will eventually be rich.Why shouldn't
the government have a potential profit on student loans so that it does not lose
money do to defaults. Even with the best case scenario, 184 billion over 10
years on 1, 000, 000, 000, 000 in loans is less than 1.7 percent per year. That
is no windfall.
When I went to college, we paid about $700 a quarter (we were on the quarter
system). That was twenty years ago and now tuition has increased in many places
about 8 to 10 times as much. I know inflation is bad, but not that bad. The
government made provisions for higher student loans to compensate for rising
tuition costs and most higher education establishments raised their rates even
higher.Somewhere along the line government and institutions have
adopted a new scenario. Its not about improving the community, its about the
money. And that is fine if you are a competing business in a capitalistic
society, but not when you are a government or a government regulated entity with
the sole duty of enabling society; not controlling and profiting from it.
As an accountant I find the title of this article to be very inappropriate.
Very few people actually know what accounting really is and understand the
complexities that are involved in determining what is value and how to
objectively/numerically account for it. These so called "accounting
tricks' are better defined in the article itself as "Methods" (that
would be the official terminology) but using the term "tricks" is a stab
at the profession. While we're at it I think it would serve us to point
out the profession of choice for most of our government leaders is attorney.
While lawyers are great in their own function to society might I suggest that
when the majority of the tasks associated with being in office deal with making
and managing budgets and dealing with fiscal policy, we would do well as a
country to elect people who are specifically trained in these things. What
I'm saying is that I believe accountants would make better politicians than
lawyers. I really believe that the financial crisis of our country would
probably be solved (if not avoided) by now if accountants were running the
The more money there is to be loaned by the federal government, the more money
colleges will charge students. This is an established fact, and a problem.
The problem is the outrageous cost of attending college. Students from
middle-class families do not qualify for Pell Grants or Work Study and cannot
afford to pay the outrageous cost of a college education from savings or income,
so students loans have to close the gap. There used to be a day when a student
could get a good summer job and that would pay for almost all of the next years
college. Sadly, that day is gone. State legislatures have constantly cut
funding for colleges and the shortfall has been shifted to students. Now, given
the Republican Party's aversion to Middle-Class America, they want to stick
it to Middle-Class students via student loans.
Just like healthcare, the more government gets involved the more expensive it
is.Cheap interest isn't the answer.
EdGradyYour reply is close, but still off. Yes middle-class Americans
cannot afford to go to schools, but this in not due to budget cuts, quite the
opposite. It is due to Federal Loans being guaranteed to go to the schools, they
simply charge more because the Fed govt. gives them incentives to do so by
granting outrageous loans. If we want to end this, stop sending tax money
to college administrators pockets and the cost of education will go down. I find
it ironic that you would say the Rep. party has an "aversion" to the
middle class when it's the left that keeps enacting policies that further
burden the already inured middle class.
Are you kidding ?Government accounting ? Jumbo Shrimp ?
The solution to the problem is to get the government out of the student loan
program and let the free market run things. I can get a 2.7% auto loan for 72
months. If the government got out of the loan business competition between
lenders would drive prices down. Guess what happens when gov funded
student loans default? We the taxpayer are left holding the bag and it will be
the next big economic disaster just like the housing failure. In fact,
government should get out of the education business altogether, but we know that
will never happen because of the teachers union.