The loan industry has a dubious impact on higher education. It advocates, unknowingly or deceitfully, that a college degree is always an excellent investment. It helps shift focus to cost as a measure of everything, away from quality, value and utility. Students and parents should ask hard questions about fit and purpose.

“Just as buying speculative stocks makes sense for some investors but not others, so “investing” in a college education has a payoff for some–but for many others it is a mistake.”

Richard Vedder

Washington, with the pomp of a major achievement, established caps on interest rates for subsidized student loans at 3.9%. The rates, down from a dangled 6.9% levy are born of a desire to increase the number of graduates from programs ranging from one to 4 years.

Lower borrowing costs potentially increase the population pursuing degrees. As low-cost/low-scrutiny mortgages led to increased housing costs, so will low-cost loans for education lead to increased costs for students. The housing bubble was puffed-up with a seemingly well-intended political penchant to generate “homeowners”. The education bubble is inflated with the same gas: More “graduates” are good news.