> If they had, you might have doubted their claim that this is the reason that college costs $50+k/yr.
I think of this more as a capacity problem. Let's say every student has the capacity to pay for ~15k in schooling. If you have ~15k in spending power you can almost always find someone who will lend to you at around 2x your spending power. Because of this you can probably find someone to give you 30k on top. After that the government gives you an extra 5K of deferred loans.
Suppose people couldn't get that last $5k from the government. No one in the country could come up with the money. Would colleges close down?
If they wouldn't close down, and they would instead make adjustments to their pricing, then you can reasonably say that the government involvement here is making SOME change to the market effects.
We might argue here about numbers and percents but it's pretty evident: if your consumer base has a higher purchasing power you can extract more money from them. There's a load of MacOS devs that make a living selling $10 utils that can attest to this.
I think of this more as a capacity problem. Let's say every student has the capacity to pay for ~15k in schooling. If you have ~15k in spending power you can almost always find someone who will lend to you at around 2x your spending power. Because of this you can probably find someone to give you 30k on top. After that the government gives you an extra 5K of deferred loans.
Suppose people couldn't get that last $5k from the government. No one in the country could come up with the money. Would colleges close down?
If they wouldn't close down, and they would instead make adjustments to their pricing, then you can reasonably say that the government involvement here is making SOME change to the market effects.
We might argue here about numbers and percents but it's pretty evident: if your consumer base has a higher purchasing power you can extract more money from them. There's a load of MacOS devs that make a living selling $10 utils that can attest to this.