Student Loans Aren't Working

Bennett Hypothesis

The Bennett hypothesis is a theory that federal student aid has not made higher education more affordable. I am not sure if this theory is completely true, as the article claims that it cannot be properly tested, but I do believe the premise. The existence of federal student aid has resulted in colleges been given the excuse to dramatically increase prices. "Between 1981 and 1995, average tuition and gross fees...increased 88.7%; between 1996 and 2014, the increase was 70%". These dramatic price increases since federal student aid has been founded has completely obliterated the lifeboat that federal student aid has created.

How to stop it?

• I would attempt to eliminate corruption and improprieties in the system
  • I would introduce legislation that stipulates that all colleges cannot increase or reduce discounts based on federal aid given.
  • I would ensure that colleges are unable to increase tuition and fees because of more federal aid.
  • I would reduce the power of guaranty agencies, and increase the requirements necessary for a student loan, thereby removing the agencies power to wantonly offer student loans to anyone and everyone who desires them so that they may profit more.
• I would reduce the accessibility of loans like these to people who are not likely to pay them off
  • I would implement a system that finds people who are being forced to go to college and would then not offer them student loans.
  • I would reduce the number of student loans that are given to people who are attending 2 year trade colleges, as the default rate for this pool of people is double the national default rate on student loans.
  • I would eliminate the clause that says that high school dropouts are allowed to get student loans. If they can't finish high school, why would they finish college?
• I would change the way the system is run. The current structure is the reason behind the system's downfall.
  • I would reduce the interest rate of student loans, making sure that it is easier for people to pay the money back.
  • I would make sure that the federal government isn't the guarantor behind eery student loan, so private agencies are more responsible for their bad decisions.
  • I would eliminate the requirement that the federal government reimburse states for the formation of guaranty agencies.

Winners and losers

I believe that a very small portion of my college expenses will be paid by federal student loans.

• I believe that I will be a winner as I have received such a loan.
• I believe that my parents are losers, because their tax dollars are mostly dedicated to the education of others.
• My state is losing, because the subsidization of education results in an opportunity cost, basically that they could have spent the money elsewhere in a better fashion(i.e improving healthcare infrastructure)
• The state that my college belongs is also losing for the exact same reasons as my own state that I currently live in is losing
• The federal government loses big time, as they have to pay for the student loans of millions of people and a significant portion of these people default on their loans. It is a very bad situation for the federal government, as they cannot afford to continue the offering of the loans as they are currently offered, but they will never stop offering the loans as any and all politicians who support this will immediately be kicked out of office.