Billionaire investor Mark Cuban saw the demise of century-old Sweet Briar College as “just the beginning of the college implosion” last week, BusinessInsider.com reported on Friday. Cuban’s been warning about that implosion for a long time, in addition to turning a skeptical eye toward the inflation of university tuition as easy money surges through the system. “Forgiving the debt is the worst thing you can do, because all it does is bail out the universities,” said Cuban, arguing that such a measure would lead to a fresh round of big borrowing, and inflated tuition sponges to soak up all that easy money. He was responding to new initiatives from President Obama to revise federal student loan management, which the President described as a “student aid bill of rights.” “Anything that causes lenders and service companies to act fairly is a good thing,” Cuban said in a statement to Business Insider about Obama’s plan. “The challenge is that you can’t subsidize or forgive existing debt without very strict rules. Otherwise it allows schools to tell future students not to worry. They too will get some portion forgiven. Which in turn gives the school more leeway to raise tuition.”
For more analysis on current proposals focused on student loans and bankruptcy, be sure to register for Wednesday’s ABI Live Webinar, titled “New Developments in Student Loans.”
