The subsidies to banks are incentives to loan. Fewer incentives seems likely to result in a fewer loans at higher prices.
If the price of education was set entirely by the market, the price of education would be equal to the expected reward - which would imply student payments so high they leave a graduate making little over the minimum wage for their entire lifetime. Even more, the student is more likely to overestimate their expected reward from education (everyone thinks their above average) than the bank is likely to underestimate it so some students today can wind-up with truly absurd debt loads (think of the people who drop out of medical school with no degree but owing $150K).
This situation provide such perverse incentives that it's in the interest of society to prevent it through lower-priced state education as well as private education subsidized by scholarships. During the 1950's, when America happen to be growing and productive, this was the paradigm. In the present era, the movement towards the marketization of education has only accelerated the country's decline. Why providing even more marketization now is "good thing" is beyond me.
Education and basic health care should be provided free to each citizen (to extent, forced on each individual) because they are a good, benefit for society as a whole rather than being merely a good for each individual. You benefit when everyone is healthy and smart (unless you're a con-man looking to outsmart your fellow citizen). The willingness of this society to go in the opposite direction has been a powerful force moving downwards.
If the price of education was set entirely by the market, the price of education would be equal to the expected reward - which would imply student payments so high they leave a graduate making little over the minimum wage for their entire lifetime. Even more, the student is more likely to overestimate their expected reward from education (everyone thinks their above average) than the bank is likely to underestimate it so some students today can wind-up with truly absurd debt loads (think of the people who drop out of medical school with no degree but owing $150K).
This situation provide such perverse incentives that it's in the interest of society to prevent it through lower-priced state education as well as private education subsidized by scholarships. During the 1950's, when America happen to be growing and productive, this was the paradigm. In the present era, the movement towards the marketization of education has only accelerated the country's decline. Why providing even more marketization now is "good thing" is beyond me.
Education and basic health care should be provided free to each citizen (to extent, forced on each individual) because they are a good, benefit for society as a whole rather than being merely a good for each individual. You benefit when everyone is healthy and smart (unless you're a con-man looking to outsmart your fellow citizen). The willingness of this society to go in the opposite direction has been a powerful force moving downwards.