I always end up writing in these threads because of my unabashed lividity towards the higher education system, and I by god it is nice to hear this finally acknowledged and spoken by someone in the Fed, even if Bernanke doesn't fully agree. It's a fresh change hearing this is a problem by people who actually have some power and education in this matters as opposed to hearing the empty words from politicians.Just as the mortgage lending boom pushed home prices upward, student loan lending has put upward pressure on tuition. The bankers said both examples showed a "lack of underwriting discipline."
It's one of the biggest financial distortions that I can think of. The cost of college education doesn't reflect the return on investment, but it's become a trap, because your earning potential without a college education is still quite a bit worse. Tuition rates have almost created an obligatory debt for the white collar work force. Add that on top of a mortgage, and it's no wonder that the middle class is losing wealth to those at the top. A very large number of people spend a decade working for lenders.