Thread by @zeneraalstuff

The DMK has recently announced that they would get student loans waived off.
Here is the back story
- Between 2002 - 2006, there was a boom in IT jobs. Engineering graduates from tier-2 and tier-3 colleges, some of whom were first time graduates found jobs paying 2.5 lakhs pa /1

This created a demand for engineering college seats.
Between 2006-2011, the number of engineering colleges in TN grew to 550. Most of them had a Computer Science, an IT, a ECE, a EEE and a Mech class. Nothing more.
Between 2008-2010, there was a short lull and again another /2

bull run in IT jobs from 2012-2014. After 2014, these last 6 years have been rough going. The economy in general and IT companies in particular have not created entry level jobs proportionate to growth. Given that many of these colleges have little on offer in terms of skill /3

development, the demand for engineering college seats has dried up. Year after year, seats go abegging in counselling. Some 50 colleges have closed down in the last 4 years. Many of them have pivoted to become Arts and Science colleges.
There is a similar situation in teaching /4

jobs. Between 2001 to 2009, institutes offering DTed and B.Ed courses mushroomed. However, after 2012, when 25000 Govt teacher appointments were made, there have been no new appointments in aided or Govt schools. As a result, many of those who took out student loans for /5

engineering or teaching degrees are struggling to repay loans. A loan waiver would result in the following:
- Moral Hazard - people will take out student loans hoping that the loans will be waived.
- Renewal in demand for college seats - many of these are in the hands of /6

politicos.
- The banks would have to take a haircut once in a while, in return for a larger book of educational loans. PSBs may not mind it too much.

The State would be financing sub-standard education from private players. Unemployment among 18-29 yr olds is high and /7

employability is low, especially among engineering graduates.
A young man from a poor Brahmin cook's family took out a loan for a B.Com degree.
I know the family for 20 years and take an interest in them. I know the boy does not have much of an aptitude to /8

pick up an advanced degree. A B.Com degree does not guarantee much of a place in the knowledge economy, without the right kind of college pedigree or family background. He had a job with a bakery and picked up pizza making, baking cakes, making burger patties /9

and so on. This is a skill which will keep him employed for the next 20 years. He can then pick up whatever may be trendy food and stay employed for the rest of his life. However, his family does not want to do this low-status job. He will join the queue of unemployable youth /10

and keep doing low-end white collar jobs. However, the lad is only 23 and can still see sense. The B.Com. degree and the loan of Rs 50,000 the family took out is essentially cash put into a rich educationist's pocket, with no return. /END