Do student loans mandate cost-containment?
Student loans help a lot of students get an education. They also facilitate the run-away cost of higher education. That's not a categorical argument against student loans, it is just basic econ. Availability of financing makes people less cost constricted.
In the same way, a program like Medicare would help facilitate the run-away cost of health care, all things being equal.
But all things are not equal. The government has a fixed idea of what a given medical procedure is worth. If a doctor wants more than that she is free to not take medicare and limit her pateints to the very wealthy.
I don't know much about student loans, so this is perhaps a naive question, but does the government do similar cost-containment in the arena of student loans?
For instance, an extreme approach would be loan black-listing schools with the most above trend cost increases. No government backed loans for enrollment in schools X, Y and Z that have crazy prices.
The limited size of government loans does have some cost-containment, insofar as it means you cannot plausibly loan-finance a super-expensive education, but the ability to finance even part of a super-expensive education is still a subsidy for the super-expensive school.
And let's face it... the costs of higher education are so disconnected from reality that student loan programs are really more a subsidy for schools, not students. (Imagine if all auto makers simply doubled the price of all cars. Then the government said, hey, nobody can afford a car! and started a subsidized loan program for car buyers. That program would really be a price support for the car makers who would, in the absence of such a program, find they had to lower their car prices.)
Anyway, is there any sort of cost containment mechanism in student lending?
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