Posted on 06/20/2014 11:49:07 AM PDT by SeekAndFind
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 ...
I suspect that most who called for all the federal aid to “education” had no idea what they were initially proposing c. 1958-1966.
The gravy train can’t last forever.
What do you expect when kids sign and agree to pay and then don’t do it?
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.
I’m not absolving the responsibility of those who take out student loans, but many simply can’t pay them back.
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.
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.
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.
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.
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.
Oh, the humanity!
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?
“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.
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.
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.
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.
Yup. I said the same in 2008. Now we are approaching another home loan disaster.
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.
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.
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