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Over the past year I’ve sat in Starbucks and heard many students complain and moan, then laugh about their massive student loan debt. OK, I don’t find this strange at all, nor do I approve of our government paving the way for another bubble building exercise, but this is what is happening, meanwhile colleges and universities have created more demand than supply. experience, so they’ve added new wings, new degree programs, and expanded campuses, all while raising tuition costs; Whatever the market will bear.
In some respects I find it fascinating that a left-leaning academic will relentlessly trash free market capitalism while they create a Disneyland type environment that is not based in any kind of economic reality, then use brass bells to tell us that Nuts are how run our economy.
Now, on September 2, 2013 there was an interesting piece on MSNBC Money Online News titled; “9 Ways to Cut Your Student Loan Debt” – For many people, paying off student loans is a cumbersome process. Here are some programs that can help,” in which the article sported several novel ideas ranging from getting a scholarship to having a good conversation. But I have a better idea, get a job, or drop out of school.
Want to know what’s worse? Well, the Wall Street Journal reported on September 6, 2013, “JP Morgan Will Exit the Student Loan Business” by Dan Fitzpatrick and Robin Sidell, that the company made only $200 million from its student loan activities in 2012. earned, and still lent over $6 billion. What this means is that, with the number of defaults and the potential for these student loans to go bad, they cannot afford to take a loss for such a small revenue gain. Congress and the Obama administration put price controls in place as most socialist countries did by raising interest rates in various sectors to no avail, even as more and more student loans defaulted.
If banks can’t make money in this sector or will stop making these types of loans, once they stop there will be less loans. Any time price controls are established, and we know this not only from history but as any good student of micro-economics would lack. JPMorgan though not the biggest player in this sector is still a well known name and if they decide to do this others will follow as predicted by the opponents of interest rate moratorium as I did. Please consider all this and consider that.
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