Basic economic theory states that as demand for an item increases, so does the cost of that item. This pricing behavior is easy to see when comparing concert tickets for various artist.
A person can expect to pay a lot more for a front row ticket to next summer’s Adel concert than a ticket to the local high schools’ rendition of Cats. As it relates to college education costs, as more students want to attend college, the costs to pursue that degree have also increased. But typically, consumers would apply some downward pressure to keep the cost of entry as low as possible. That has not happened largely because federal institutions have made paying for college so inexpensive. Since the students have cheap way to obtain the funding, colleges …show more content…
If you are employed by a government agency, a not for profit and similar organization, you are entitled to special loan forgiveness opportunities. As long as you work at least 30 hours a week and make 120 payments, your debt can be forgiven. The borrower does not need to make consecutive payments either, simply 120 payments over the life of the loan. A program such as this will entice more individuals to take on extra debt and find employment in the public sector instead of being a smart and cautious borrower.
In the case of loan forgiveness, at first glance, this appears to be a sound position to take as students are saddled with high levels of debt and limited means to pay them off. But such programs are only required because the Federal government enticed people with these massive amounts of money. Had the interest rates been set more realistically, or based on a person’s ability to repay the loan, few people would have borrowed the money in the first …show more content…
Economists from the New York Federal Reserve created a formula to calculate a net present value (NPV) to determine the value of a bachelor’s degree overtime. While the NPV fell from the early 1970’s to the 1980’s from $120,000 to $80,000, it more than tripled to $300,000 in the late 1990s (Able J., Dietz R.). The breakeven or time it takes to recoup to the cost of the education has held steady the past 25 years, and it requires about 10 years to pay for college now. If the only way to attend college is through the assumption of debt, it could make sense but it is an individual decision.
Until the amount of funding coming from the Federal government is reduced, the colleges will have no incentive to make adjustments to their fee structure. They will continue to add expensive workout facilities, increase the roles of the tenured, and build rock walls for entertainment purposes (Cohen). The following suggestions are ways to get these costs back in line and make college truly
A person can expect to pay a lot more for a front row ticket to next summer’s Adel concert than a ticket to the local high schools’ rendition of Cats. As it relates to college education costs, as more students want to attend college, the costs to pursue that degree have also increased. But typically, consumers would apply some downward pressure to keep the cost of entry as low as possible. That has not happened largely because federal institutions have made paying for college so inexpensive. Since the students have cheap way to obtain the funding, colleges …show more content…
If you are employed by a government agency, a not for profit and similar organization, you are entitled to special loan forgiveness opportunities. As long as you work at least 30 hours a week and make 120 payments, your debt can be forgiven. The borrower does not need to make consecutive payments either, simply 120 payments over the life of the loan. A program such as this will entice more individuals to take on extra debt and find employment in the public sector instead of being a smart and cautious borrower.
In the case of loan forgiveness, at first glance, this appears to be a sound position to take as students are saddled with high levels of debt and limited means to pay them off. But such programs are only required because the Federal government enticed people with these massive amounts of money. Had the interest rates been set more realistically, or based on a person’s ability to repay the loan, few people would have borrowed the money in the first …show more content…
Economists from the New York Federal Reserve created a formula to calculate a net present value (NPV) to determine the value of a bachelor’s degree overtime. While the NPV fell from the early 1970’s to the 1980’s from $120,000 to $80,000, it more than tripled to $300,000 in the late 1990s (Able J., Dietz R.). The breakeven or time it takes to recoup to the cost of the education has held steady the past 25 years, and it requires about 10 years to pay for college now. If the only way to attend college is through the assumption of debt, it could make sense but it is an individual decision.
Until the amount of funding coming from the Federal government is reduced, the colleges will have no incentive to make adjustments to their fee structure. They will continue to add expensive workout facilities, increase the roles of the tenured, and build rock walls for entertainment purposes (Cohen). The following suggestions are ways to get these costs back in line and make college truly