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-- man tomorrow with a big day seven million college students will see their student loan costs double.
In less than 24 hours.
No agreement was reached believe it -- not with congress to prevent the automatic hike and now rates will jump to nearly seven.
Per -- for round 3% so will this be the next big thing to hurt our struggling economy is right now is Glenn Reynolds.
Law professor at the University of Tennessee and author of the higher education.
Bubble it's all about opt out the top -- thanks for being here thanks for -- It should we be outraged about the interest rate itself what is the principle of this whole it's really the principle that's exactly right I mean the real problem driving this is the college costs have.
Grown much faster than the rate of inflation much faster than incomes about seven and a half percent.
A year on average over the last thirty years most -- that would put up a graphic -- -- talk here look at this college tuition.
Outreach all sorts of other things that we you know.
In blue -- down there for the bottom that's the housing bubble suits to just to give right respect of the Red Line is medical cross so Costa which is way above all of this.
And people of made up the difference with -- and he used to be -- go to college you -- wait tables you can -- -- are you get through.
Four years of college even -- cheap public university is a six figure proposition and people borrowing to make up the difference.
And the reason because college costs have gotten out of control and it's not that the product has gotten better and -- just -- more expensive it seems like there's.
But also mentioned were faculty and students at some of these colleges well it's not so much faculty a lot of the problem is administrative bloat -- -- -- Goldwater institute found that about 65% of the increasing college costs comes.
From hiring administrators is -- a lot of universities now have more administrators and they -- teaching faculty.
-- You know there's an and nobody's quite sure what they do most of us.
And what about half -- college students -- like that are now not working at all.
Or they're working -- job that they don't need it a degree for that's -- students graduates 125 about half -- -- either unemployed or the working a job doesn't require price agreements.
Well I can't fix the economy.
But the student loan problem you fix a controlling costs and one of the things I would do is -- colleges some skin in the game I would say that after some reasonable period five or ten years.
Student loans to be discharged in bankruptcy people can't -- -- and -- -- -- have to eat part of the cost that you have to -- -- 20% of it.
That's a real incentive not to get students in the majors are -- -- any money while they run a big student loan debt okay you'll -- -- -- storm maybe congress to get their act together could you could fix this.
And do it retroactively.
Get those interest rates down below 4% get it going thank you.
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