Anytime the government injects itself into the free market between buyers and seller, such as helping more students be able to pay for college by applying for government back loans, it creates market distortions. And, let’s face it, after more than a couple of decades of college costs rising, often well above inflation, the result of the stimulus created by liberal lending policies is U.S. higher education is one of the greatest bubbles in modern times. Students and families continue to take on higher and higher amounts of student loan debt to pay for, what is almost mandatory today, a college degree. Of course, the hard reality is some college majors are more lucrative then others in terms of future income potential and career growth. Less financially rewarding majors leave many American college graduates saddled with debt that will take many years to pay off.
One of the ways to reduce the inflationary effect of government backed student loans on rising college costs is to phase the government out of student lending, leaving it to the private sector, such as banks.
As the future U.S. Senator, I don’t advocate free tuition which only shifts the burden of cost to taxpayers who are forced to comply. I do believe that free market forces without government intervention, such as government backed student loans, will force colleges and universities to align their pricing and affordability to the ability of students and families to pay.