Cheap money means prices can go up and it's all based on an old sales trick... "3 easy payments of $19.95!"
That makes people feel like what they are buying is $20, or closer to $20 than $60.
Imagine you are selling an expensive piece of fitness equipment like a Bowflex or Nordick Track, or Total Gym or whatever. Those things retail for $500-1,500. How many people go to the store and drop $1,000 on a home gym? Not many. However, a lot of people buy equally expensive products via infomercials, QVC, and Home Shopping Network because of the payment plans.
Low interest mortgages and student loans spread out over a 30 year period make these huge ticket purchases more "affordable". They also totally distort the cost of the purchase.
The fact is, people make decisions to solve short term pain, not for long term gain.
The universities, credit card companies, banks, etc. are taking advantage of a system that we all built and participate in. It might not be what is best, but it is certainly our own creation and at some point society should take ownership of our own flaws, not continue to blame other people.
College and homeownership are a choice. There are alternatives. If we don't like the current system, it's up to us to change it or not participate in it.
That makes people feel like what they are buying is $20, or closer to $20 than $60.
Imagine you are selling an expensive piece of fitness equipment like a Bowflex or Nordick Track, or Total Gym or whatever. Those things retail for $500-1,500. How many people go to the store and drop $1,000 on a home gym? Not many. However, a lot of people buy equally expensive products via infomercials, QVC, and Home Shopping Network because of the payment plans.
Low interest mortgages and student loans spread out over a 30 year period make these huge ticket purchases more "affordable". They also totally distort the cost of the purchase.
The fact is, people make decisions to solve short term pain, not for long term gain.
The universities, credit card companies, banks, etc. are taking advantage of a system that we all built and participate in. It might not be what is best, but it is certainly our own creation and at some point society should take ownership of our own flaws, not continue to blame other people.
College and homeownership are a choice. There are alternatives. If we don't like the current system, it's up to us to change it or not participate in it.