Here’s how student loans from the government work:
I have a student loan from the government to attend Brazosport College. I get $3500 for two semesters.
Last year I paid over $7000 in taxes.
If I had not had that $7000 stolen from me, I could pay my tuition without the student loan.
So the government loans me $3500 of the $7000 it stole from me. Then, I’ll borrow another $3500, and by that time I’ll have paid another $7000 in taxes.
So that’s $7000 in loans from the government, out of $14,000 the government has taken from me.
When I finish school, I’ll have to pay the government that $7000 back (the same $7000 they already took from me), and I’ll also have to pay interest on that $7000.
Again, I could pay for my tuition myself if the government was not stealing my money.
So, the government takes $14,000 from me. I borrow $7000 from the government. I pay back that $7000 plus interest.
$3500 for two semesters.
$3500 for another two semesters.
$7000 in loan payments.
Interest on the loan.
$14,000 in taxes.
I’ve even looked at taking out the loan forgiveness program by Obama to help me repay my student loan! And, since the government guarantees these student loans, Brazosport College charges much more than it would be able to in a free market economy, because there’s no incentive for them to keep their prices low and their quality high. Not to say their quality isn’t high, it’s a great school. But the point is, they’re guaranteed money from the government that you and I pay for.