The Student Loan Crisis Analysis
An Analysis of The Student Loan Crisis
In “College Tuition: The Growing Inefficiency of the Market for Higher Education”, Zach Branson elaborates on the dire economic inefficiencies that resulted from the unprecedented increase in university tuition fees. Although Branson proposed several insightful solutions to combat the root causes, this response argues that a deeper analysis of the solutions must be considered.
Branson posits the idea of reverting to a subsidy-based system instead of the existing loan-based system. Although he pointed out the ostensible benefits of this switch for the government’s fiscal health, he failed to present its long-term benefits for college students. A subsidy-based system will result in students taking smaller loans, freeing up funds to achieve major financial milestones such as purchasing their first home, and setting up a family [1]. The additional spending power will benefit the students for a lifetime as they will no longer be slaves to their incessant debt. Moreover, Branson could have offered an alternative solution such as imposing mandatory credit checks and guarantors before students obtain a federal student loan, a loophole in the current application process [2]. Mandatory credit checks will …show more content…
However, the scope of his points seems to be one-sided as he only analysed the matter from an economics perspective. From a social standpoint, there is an increased belief among individuals that obtaining a degree is essential in their career [5]. Furthermore, the increasing trend of credentialism among employers has fuelled the demand for college graduates [6], allowing universities to leverage on this demand to increase their tuition fees. A broader analysis of the problems could have provided Branson with the tools to propose a holistic range of
In “College Tuition: The Growing Inefficiency of the Market for Higher Education”, Zach Branson elaborates on the dire economic inefficiencies that resulted from the unprecedented increase in university tuition fees. Although Branson proposed several insightful solutions to combat the root causes, this response argues that a deeper analysis of the solutions must be considered.
Branson posits the idea of reverting to a subsidy-based system instead of the existing loan-based system. Although he pointed out the ostensible benefits of this switch for the government’s fiscal health, he failed to present its long-term benefits for college students. A subsidy-based system will result in students taking smaller loans, freeing up funds to achieve major financial milestones such as purchasing their first home, and setting up a family [1]. The additional spending power will benefit the students for a lifetime as they will no longer be slaves to their incessant debt. Moreover, Branson could have offered an alternative solution such as imposing mandatory credit checks and guarantors before students obtain a federal student loan, a loophole in the current application process [2]. Mandatory credit checks will …show more content…
However, the scope of his points seems to be one-sided as he only analysed the matter from an economics perspective. From a social standpoint, there is an increased belief among individuals that obtaining a degree is essential in their career [5]. Furthermore, the increasing trend of credentialism among employers has fuelled the demand for college graduates [6], allowing universities to leverage on this demand to increase their tuition fees. A broader analysis of the problems could have provided Branson with the tools to propose a holistic range of