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MARK CUBAN: 'The Student Loan Bubble Is Going To Burst'
Business Insider ^ | 06/20/2014 | Myles Udland

Posted on 06/20/2014 11:49:07 AM PDT by SeekAndFind

Mark Cuban inc screenshot

Screenshot via Inc.com

Mark Cuban thinks colleges are going to go out of business.

In a clip on Inc.com, Cuban talks about the student loan bubble, which he says will burst and end badly for colleges.

The end of the student loan bubble, Cuban says, will be like the housing bubble, where tuition collapses the way the price of homes collapsed. 

These collapses will put colleges out of business.

Cuban:

"It's inevitable at some point there will be a cap on student loan guarantees. And when that happens you're going to see a repeat of what we saw in the housing market: when easy credit for buying or flipping a house disappeared we saw a collapse in the price housing, and we're going to see that same collapse in the price of student tuition, and that's going to lead to colleges going out of business."

(Excerpt) Read more at businessinsider.com ...


TOPICS: Business/Economy; Education; Society
KEYWORDS: bubble; markcuban; studentloan

1 posted on 06/20/2014 11:49:07 AM PDT by SeekAndFind
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To: SeekAndFind

I suspect that most who called for all the federal aid to “education” had no idea what they were initially proposing c. 1958-1966.


2 posted on 06/20/2014 11:50:58 AM PDT by Theodore R. (Liberals keep winning; so the American people must now be all-liberal all the time.)
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To: SeekAndFind

The gravy train can’t last forever.


3 posted on 06/20/2014 11:51:32 AM PDT by Jim Robinson (Resistance to tyrants is obedience to God!!)
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To: SeekAndFind

What do you expect when kids sign and agree to pay and then don’t do it?


4 posted on 06/20/2014 11:53:18 AM PDT by Hattie
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To: SeekAndFind

He is correct.

One major this recovery is different, is that many would be home buyers, and family starters are held back by these loans. They cannot borrow to buy homes, and afraid that children will bankrupt them.

The root cause, is not Obama for a change; but he did nothing to solve it. Democrats originate much of their power from the education industry.


5 posted on 06/20/2014 11:55:35 AM PDT by cicero2k
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To: Hattie

I’m not absolving the responsibility of those who take out student loans, but many simply can’t pay them back.


6 posted on 06/20/2014 11:57:58 AM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults)
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To: SeekAndFind

Such a crash would be a good thing for this country.

The end of cheap money and tuition decline will mean education will become focused on the practical needs of real people. Bubble money (Gov’t funding and debt) are the main drivers of political indoctrination on college campuses. Top research institutions and highly competitive schools with deep pockets will not go away.

Let’s hope it happens soon.


7 posted on 06/20/2014 12:00:13 PM PDT by PGR88
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To: SeekAndFind

Of course when you go to a college campus the opulence is unbelievable.

My niece had a nicer dorm room than the first several apartments that I had. Most colleges have massive student life programs with climbing walls, workout rooms and natatoriums better than any sport club or country club, even the most expensive in the country.

College has very little to do with learning anymore. It is a four year party.


8 posted on 06/20/2014 12:04:16 PM PDT by Jim from C-Town (The government is rarely benevolent, often malevolent and never benign!)
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To: SeekAndFind

The federal government is always involved and, in effect, creates bubbles with their involvement - price increases are the outcome - cars, houses, student loans, solar crap - it’s always more than obvious from day one. Federal government subsidies will always cause something to blow up down the road. But, a lot of money is made - by a few people - along the way.

We sure seem screwed in America.


9 posted on 06/20/2014 12:05:23 PM PDT by relentlessly
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To: PGR88

The exact same thing is true with the health care industry. The more the Federal government gets involved the more expensive and less effective it becomes.


10 posted on 06/20/2014 12:05:39 PM PDT by Jim from C-Town (The government is rarely benevolent, often malevolent and never benign!)
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To: PGR88

It’s better to get it over with asap. The longer it can be put off, the greater the pain and adjustment that must be made.


11 posted on 06/20/2014 12:06:05 PM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults)
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To: SeekAndFind
All those effete college perfessers having to look for real jobs?!

Oh, the humanity!

12 posted on 06/20/2014 12:07:08 PM PDT by E. Pluribus Unum ("The more numerous the laws, the more corrupt the government." --Tacitus)
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To: PGR88

RE: Such a crash would be a good thing for this country.

What about:

1) Graduates who have not paid off their loans?

2) The financial institutions who loaned them the money?

The National student loan debt is now $1.2 Trillion total.

According to the US Dept. of Education, The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010.

SEE HERE:

http://www.ed.gov/news/press-releases/default-rates-continue-rise-federal-student-loans

We are now heading towards the 16% default rate.

16% of 1.2 trillion is : $192 Billion !! ( Nearly $200 Billion ).

Are we going to spend another $200 Billion to rescue financial institutions?


13 posted on 06/20/2014 12:07:26 PM PDT by SeekAndFind
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To: Jonty30

“I’m not absolving the responsibility of those who take out student loans, but many simply can’t pay them back.”

I’ve always asked people who take art history or Russian art literature if there’s a job waiting for them. They usually look at me as if they’d never thought of that. They’re at school to party on somebody else’s dime. Remember when there were dental clinics opening in shopping malls. They looked like barber shops. They’re all gone now. But they were there because universities over-sold dentistry. Now they’re over-selling pharmacy. Dentistry and pharmacy are being automated so many fewer jobs will open in the future. Pharmacy is already cutting back. Publix will soon be filling all orders in Florida from a single automated pharmacy and by male. They may send certain drugs to a store for you to pick up if the law requires ID. If you have a question you’ll ask a pharmacist in India who will have all your information on his screen.


14 posted on 06/20/2014 12:09:12 PM PDT by Gen.Blather
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To: Jim from C-Town
Of course when you go to a college campus the opulence is unbelievable.

Yes, absolutely true. I couldn't believe how dorms had evolved from a cell with cinder block walls to luxurious condos. The kids don't realize that they are paying for all of this, with interest. I had to be the "bad" father that said to my son, "you simply can't afford this."

I know he was disappointed but he doesn't have crushing debt today.

15 posted on 06/20/2014 12:10:11 PM PDT by Straight Vermonter (Posting from deep behind the Maple Curtain)
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To: Jonty30
I’m not absolving the responsibility of those who take out student loans, but many simply can’t pay them back.

The blame lies in government policies that dispensed with any pretense of due-diligence when underwriting education loans. Students could borrow whatever the colleges charged, so they did. That's why college tuition has risen 1200% in the past thirty years.

Most eighteen year old kids don't understand what a burden repaying a loan can be, since most of them have never earned a single honest dollar in their lives.

16 posted on 06/20/2014 12:10:31 PM PDT by E. Pluribus Unum ("The more numerous the laws, the more corrupt the government." --Tacitus)
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To: SeekAndFind

The university professors are the high priests of the Democrat Party. They are charged with teaching others the doctrine of the Democrat Party. They are used to the good life now. You can’t defund the high priests and hold the Democrat Party religion together.


17 posted on 06/20/2014 12:11:10 PM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: Jonty30
It’s better to get it over with asap. The longer it can be put off, the greater the pain and adjustment that must be made.

Yup. I said the same in 2008. Now we are approaching another home loan disaster.

18 posted on 06/20/2014 12:12:45 PM PDT by Straight Vermonter (Posting from deep behind the Maple Curtain)
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To: SeekAndFind

I believe the education debt bubble will turn out like sub-prime much more than people realize.

The simplistic, emotive narrative is that its all about “education” (how wonderful!) just like the previous bubble was all about “housing for everyone” (also how wonderful!)

Like the housing bubble, I bet we will see that 1) normal people who behaved prudently will generally not be hurt, 2) many of the loans taken will wind up involving some kind of fraud, 3) the institutions that peddled them will get little sympathy and should wind up going broke, and 4) it will cost the taxpayers a sh**load of money via stupid, political government involvement.

Its better it burst now, than just get bigger and worse in the future.


19 posted on 06/20/2014 12:14:21 PM PDT by PGR88
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To: Gen.Blather
Dentistry and pharmacy are being automated so many fewer jobs will open in the future.

Serious question, why does a pharmacist need any degree, much less an advanced? All they do is repackage pills. They're not manufacturing lipitor behind that counter.

20 posted on 06/20/2014 12:15:11 PM PDT by Straight Vermonter (Posting from deep behind the Maple Curtain)
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To: Jim from C-Town
Your statement is correct. There has been a building boom ever since I graduated from UW Madison in 2007. They are now talking about knocking down the rest of the dorms build in the 1960's in the southeast area and replacing them with "modern" posh dorms.

witte hall room:

Today's Ogg Hall


21 posted on 06/20/2014 12:16:03 PM PDT by Thunder90 (All posts soley represent my own opinion.)
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To: Gen.Blather

I think it’s great to have an interest in some exotic part of education, like Russian art history or whatever. The thing I’ve never been able to figure out about such interests is why does one need to go to a formal school to learn that stuff?

You only have to pop down to the local library and take out books, or pay $8 bucks to attend a lecture. There is also more information on the internet than one could ever use on whatever interest one has.


22 posted on 06/20/2014 12:16:06 PM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults)
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To: E. Pluribus Unum
The blame lies in government policies that dispensed with any pretense of due-diligence when underwriting education loans. Students could borrow whatever the colleges charged, so they did. That's why college tuition has risen 1200% in the past thirty years.

Most eighteen year old kids don't understand what a burden repaying a loan can be, since most of them have never earned a single honest dollar in their lives.

Exactly right. What sensible lender would give someone an equal amount of money to pursue a chemical engineering degree or a history of dance degree? If college loans were a free market then lenders would be checking your transcripts and potential even more diligently than do colleges.

23 posted on 06/20/2014 12:17:58 PM PDT by Straight Vermonter (Posting from deep behind the Maple Curtain)
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To: Straight Vermonter

“Serious question, why does a pharmacist need any degree, much less an advanced? “

To protect the pharmacy from lawsuits. One doctor prescribes drug A. Another doctor prescribes drug B. A and B together are lethal. The pharmacy gets sued. (Although, I get one drug from Canada and one from Costco. They don’t talk to each other.)

Also, if you give the wrong drug to, say, a diabetic, you’ll kill them. A pharmacist is also expected to tell everybody what a drug does and how it works. So, it’s also for customer expectations.

But, mostly, it was a way for schools to suck more money out of students and states to require more paid certifications and tests.


24 posted on 06/20/2014 12:21:08 PM PDT by Gen.Blather
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To: Thunder90
Apartment at UNCW.


25 posted on 06/20/2014 12:22:31 PM PDT by Straight Vermonter (Posting from deep behind the Maple Curtain)
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To: Straight Vermonter

My daddy was a pharmacist who had no degree. He took a test right after WWII to get his certification. I think it was associated with the GI Bill, but I am not sure. Anywho, he was the only person to ever pass the test or maybe there was one other person who passed. They discontinued the test because it was so difficult for someone to study all of the materials and to also have hands on learning. Daddy had worked at a pharmacy prior to the war, so he was an apprentice of sorts. Back then, pharmacists did more than count pills. Actually, daddy was still mixing drugs for doctors in the late 80s. He also took care to know what his customers were taking and what customers could not take what drugs among other things. I was at the drugstore one day when he called a physician and asked the doctor to change a customer’s prescription because the one the customer had would kill him. The doctor was grateful to say the least. I wish I knew more stories about my daddy. He was 53 when I was born and passed away when I was in college.


26 posted on 06/20/2014 12:33:45 PM PDT by petitfour
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To: Thunder90

I stayed in a dorm at Oshkosh and it felt like going back in time to the early 70s when I went to EAA last year.


27 posted on 06/20/2014 12:40:34 PM PDT by wally_bert (There are no winners in a game of losers. I'm Tommy Joyce, welcome to the Oriental Lounge.q)
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To: SeekAndFind

As the parent of a rising college junior, I say pop the bubble. My daughter is a double engineering major at a top school. She works. I work. She saves. I save. We pay 100% of all her tuition and fees in cash. CASH! No strings attached. AND, this summer, she is working at an internship and making a higher wage than many of the adults I know. No, it’s not easy, but it can be done. I’m tired of the blood suckers out there who game the system, study crap, and try to tempt her away from doing the right things. < rant off >


28 posted on 06/20/2014 12:46:28 PM PDT by kdot
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To: Straight Vermonter

Because when it comes to chemistry nomenclature, the naming of chemicals, it only takes one letter change, from an ‘e’ to an ‘i’, which can be completely unnoticeable by a lay person, will have a completely different effect.

And that simple letter change can honestly mean the difference between a benign effect and death.


29 posted on 06/20/2014 12:58:26 PM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults)
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To: PGR88; All

Really, folks? Do you really think the democrat/communist controlled federal government of the United States is going to let their largest brainwashing machine, the democrat/communist controlled academia complex, go belly up?

Does the phrase “too big to fail” sound familiar?


30 posted on 06/20/2014 1:04:09 PM PDT by henkster (Do I really need a sarcasm tag?)
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To: Straight Vermonter

That’s not a counter; it’s a bar!


31 posted on 06/20/2014 1:06:50 PM PDT by henkster (Do I really need a sarcasm tag?)
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To: cicero2k

Love him or hate him, Mark Cuban is one smart guy...kind of a DB, but if you have that kind of jack you can be whatever you want!


32 posted on 06/20/2014 1:10:51 PM PDT by gr8eman (A good rant should have the word "crap" in it at least 4 times!)
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To: cicero2k

Love him or hate him, Mark Cuban is one smart guy...kind of a DB, but if you have that kind of jack you can be whatever you want!


33 posted on 06/20/2014 1:10:51 PM PDT by gr8eman (A good rant should have the word "crap" in it at least 4 times!)
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To: SeekAndFind

The student loan scam/bubble will exist as long as there are taxpayers.


34 posted on 06/20/2014 1:11:24 PM PDT by St_Thomas_Aquinas ( Isaiah 22:22, Matthew 16:19, Revelation 3:7)
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To: Straight Vermonter

Look what I missed out on all those years in undergrad when I commuted to and from school and worked for a living.

Good thing I did, otherwise I’d still have student loan debt to pay! I get nauseous just thinking about what the “tuition” cost must be when you factor in the four-year party pad in that picture.


35 posted on 06/20/2014 1:24:15 PM PDT by LostInBayport (When there are more people riding in the cart than there are pulling it, the cart stops moving...)
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To: henkster
Does the phrase “too big to fail” sound familiar?

You're probably right. Bailouts all around, with the excuse for more government takeover

36 posted on 06/20/2014 1:24:21 PM PDT by PGR88
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To: SeekAndFind

How does one short this market?


37 posted on 06/20/2014 1:25:08 PM PDT by Wyatt's Torch
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To: SeekAndFind

Just keep paying your taxes. The college industry will need a bail out.


38 posted on 06/20/2014 1:54:31 PM PDT by Organic Panic
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To: blueunicorn6

Re your post 17, you made a good point.

Our country would greatly benefit if almost all of these professors found themselves on the street and not able to indoctrinate students with the Democrat “philosophy” of the role of government and other tenets of liberalism.


39 posted on 06/20/2014 2:27:14 PM PDT by OldPossum ("It's" is the contraction of "it" and "is"; think about ITS implications.)
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To: SeekAndFind

The noticeable tuition and real estate price collapses will come with the bond collapses and austerity programs ahead (government layoffs, pension haircuts, etc.).


40 posted on 06/20/2014 2:53:21 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: Straight Vermonter

Serious question, why does a pharmacist need any degree
***********************
They don’t ,, anyone with really good reading comprehension can do it , the problems come in with mis-interpreting doctors writing ... which is why there is a push for plain english RX’s in block letters ,,, another “dead” profession is optometrist ... it can be fully automated and is in many areas.


41 posted on 06/20/2014 4:31:43 PM PDT by Neidermeyer
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To: SeekAndFind

Wow, he’s so smart. How does he know so much?


42 posted on 06/21/2014 7:54:55 PM PDT by 1010RD (First, Do No Harm)
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To: 1010RD

Captain Obvious Man saves the day again!


43 posted on 06/21/2014 7:55:26 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: Jim from C-Town

Off the Kennedy in Chicago there’s a very expensive, modern extension school being built for some 2nd tier college. One of those more money than brains-type projects.


44 posted on 06/21/2014 7:56:25 PM PDT by 1010RD (First, Do No Harm)
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To: Jim Robinson

**The gravy train can’t last forever.**

Why are you so racist?


45 posted on 06/21/2014 7:56:42 PM PDT by Tea Party Terrorist (Why work for a living when you can vote for a living?)
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To: GeronL

I guess money = brains.


46 posted on 06/21/2014 8:30:08 PM PDT by 1010RD (First, Do No Harm)
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