Hollow promises

Aviation students are being sold "hollow promises", many racking up tens of thousands of dollars in student loans without ever finding jobs as pilots, aviation operators say.

Story here.

But aviation is just an extreme example; the same applies to graduates in general. The good thing about the student loan scheme is that it has made tertiary education more accessible; the downside is that by increasing the supply of graduates, it has decreased the payoff for getting a degree - undermining the "private good" which is supposed to justify the scheme in the first place.

The market solution is that students will respond to market demand by focusing their studies in areas where they are more likely to gain employment, or even forgoing tertiary study entirely. This sounds perfect in theory - the market will eventually reach equilibrium - but due to imperfect information and a five-plus year timelag, what it means for individuals is ruined lives and debt that can never be repaid.

(And when the market does work as intended and the signals reach students, the result is that we don't have enough teachers or nurses. Fantastic)

One of the reasons we have a State in the first place is to insulate people from risk - both the risk of other people using force (hence police and a justice system), and the vicissitudes of fortune (hence a health system, welfare, and anti-discrimination legislation). Our current market model of education - tuition fees and restricted student support - dramaticly increase the risks individuals are exposed to - and for what? To save the government money. Why do we, as citizens, tolerate this?