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Local law school has one of worst employment records

I think the parallels to housing are pretty strong and the solutions I would recommend are similar. Big flaws in the logic used to jusity all the loans and federal programs. Cause vs. correlation flaw in logic. In both cases the basic reasoning is "X is good. (X = home ownership or more education). Therefore more of X is even better. Therefore, we should do whatever we can to encourage more X. Therefore the federal government should provide or facilitate easy loans to people so they can afford more of X.". At the same time, as has been discussed often in these forums, the financial sector has not been properly regulated to prevent excessive risk-taking at big financial firms. And the student loans have these weird exceptions (e.g. no loan forgiveness at personal bankcrupty) which also encourage the financial firms, and schools, to take short term risks. All these policies have clearly created bubbles in student loans and tuition. The only question now is do we have a catastrophic crash or a more controlled crash. We really should stop adding fuel to the bubble now. I would do the following: - Remove loan forgiveness exception for bankruptcy - doesn't seem fair. - Gradually start raising interest rates for federal student loan programs. Eventually phase out federal student loan programs. - Start putting pressure on universities to lower or at least freeze tuition rates (threaten federal research grant loss if necessary) - Start investigating trading in student-loan based securities. Based on the housing scandal, it's pretty much a sure thing that there are some risky and/or deceptive practices.
— October 22, 2012 9:15 a.m.

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