Posted on 08/21/2011 7:05:19 AM PDT by SeekAndFind
Borrowing looms large in American life from homes to cars. But the explosion of student debt in the last decade is a pernicious trend that the colleges themselves are encouraging.
How do colleges manage it? Kenyon has erected $70 million sports palace featuring a 20-lane olympic pool. Stanford's professors now get paid sabbaticals every fourth year, handing them $115,000 for not teaching. Vanderbilt pays its president $2.4 million. Alumni gifts and endowment earnings help with the costs. But a major source is tuition payments, which at private schools are breaking the $40,000 barrier, more than many families earn. Sadly, there's more to the story. Most students have to take out loans to remit what colleges demand. At colleges lacking rich endowments, budgeting is based on turning a generation of young people into debtors.
As this semester begins, college loans are nearing the $1 trillion mark, more than what all households owe on their credit cards. Fully two-thirds of our undergraduates have gone into debt, many from middle class families, who in the past paid for much of college from savings. The College Board likes to say that the average debt is "only" $27,650. What the Board doesn't say is that when personal circumstances go wrong, as can happen in a recession, interest, late payment penalties, and other charges can bring the tab up to $100,000. Those going on to graduate school, as upwards of half will, can end up facing twice that.
A fact of academic life is that the tuition-debt nexus keeps most colleges going. At Loyola University in Chicago, 77 percent enroll with loans, as do 85 percent in New Hampshire's Franklin Pierce. At historically black colleges, where endowments are low and students are often poor, it's usually 90 percent. Nor is soaring private tuition the only reason.
(Excerpt) Read more at theatlantic.com ...
Students in America's colleges now cumulatively more than $1 trillion in debt to their college educations, yet schools are encouraging the cycle
—here’s a link only to an editorial on one of the problems with universities—
—http://www.lvrj.com/opinion/unlv-professor-s-divine-buyout-128144273.html
Somehow, some way, the American taxpayer will be made to pay for this boondoggle.
And yes, it is a bubble.
Do I sound jaded at all?
ping for later
if the fact of their intellectual and moral bankruptcy is any indication, I guess so.
“Somehow, some way, the American taxpayer will be made to pay for this boondoggle.”
Yep, the American “education” establishment is too big to fail.
My kid brother (52 years old) holds a doctorate in chemistry. His wife has a phd in some kind of bio field. It seemed like they went to school most of their early adault life and now will pay their debt probably into their 60’s.
I’ve got a measly bachelors degree with no loans and have lived a more prosperous life than they likely will.
I have no doubt the government takeover of student loans was in part intended to give them the ability to cancel all or part of these obligations and preserve this subsidized cycle of cash flowing to their propaganda mills (Universities).
Society is also encouraging the cycle, “You are nothing if you don’t go to college”, bs.
The colleges are sucking the cash out of parents and students while giving them no direction nor a solid marketable skill to enter the “real world”. They only fill their heads with propaganda about the liberal pipe dream of utopia.
I gave my kids the choice one chose college and then went to Technical School, he found a job within 2 weeks of graduation in 2009. His college buddies are either delivering pizza or making it.
My other kid, went to Cosmetology School and hasn’t been without a job since she graduated in 2005.
Her best friend graduated in 2007 with a teaching degree and can’t get a job paying more than $12 an hour as a social worker. She is $200,000 in debt with student loans.
Not at all.
You sound like someone who understands economics as put into action by America’s socialists.
And the cost-of-education bubble (enabled greatly by government financing, grants, and scholarships) is only one of many that is going to burst and cause a lot of problems when it does.
Let’s not forget that most universities invest heavily in real estate around their campuses. A bursting of the residential and commercial real-estate bubbles combined with a bursting of the cost-of-education bubble and a decrease in the net worth of alumni who give to their alma maters (due to the depression) is going to spell fiscal insolvency for many, many colleges and universities.
I see this as a good turn of events. Upper academe has become largely a tool of the leftist state and our entire education system from K-Bachelors needs to be overhauled, returned to a locally controlled curriculum with its roots in the basics.
Its not just tuition. These loans are used for day to day living expenses...especially popular with single mothers looking to supplement income. There are already whispering campaigns about getting loans forgiven, if you enter some sort of service program...and the light bulb goes off.
So the ivory tower is real ivory (for the staff and senior academics!) Lots of teaching(?) by post grads and teaching assistants. Best scam going for illiberal academia!
I have been posting that we are witnessing the end of brick-and-mortar universities.
Their escalating prices are unsustainable. The cost-benefit analysis has tilted toward cost.
Online universities will replace brick-and-mortar institutions. Previously property-tax exempt land will go back into the pool and cities will be eager to have that revenue return.
Some lament the loss of the social aspects of college. Since the 1960s, the social aspect has been drugs, drinking and sex. I think we can live without those experiences.
Academia became the final resting place for many of the student ‘activists” of the mid to late 1960s because they couldn't get jobs in the open market. What businessman would hire someone who had occupied, or supported the ides of, a college president's office with non-negotationable demands? Once in these ex-student radicals hired their friends, and sons of their friends, and...
This new trend was fostered by the idea of education makes right. You aren't anyone in American society without a BS, MS, PhD behind your name. Where else did this thought pattern take us? Well, we see it i government - the “best and brightest” ruling us. We also saw it in job export. We also saw it within the education system where degrees are granted based on interpolation of other’s research in place of real research. Can you say climate-gate?
The Republic was built by people working with both their minds and hands. It will be destroyed by those who work with only their minds.
The American taxpayer is paying for it now. Because of changes made by the Obama Administration, funding for student loans no longer comes from private lending institutions. They now come directly from the US Treasury. And as with all monopolies, future students can expect to pay higher rates of interest than they would in a competitive market. And if a student falls outside the government's graces, they have nowhere else to go to get an unsecured student loan. Yes, Big Brother is tightening its grip on a new generation.
One solution: make tuition loans dischargeable in bankruptcy. Loan issuers will stop making loans to people unlikely to profit from going to college.
Second part of solution: make colleges co-signers for the loans. They will stop admitting people who do not belong in college, and drop stupid programs like "womyns studies".
r.i.p.
Actually, since student loan debt is not dischargeable in a bankruptcy, it seems more likely the gov’t is intent on making student loan holders into de fact indentured servants.
de facto
http://www.mymoneyblog.com/charts-college-tuition-vs-housing-bubble-vs-medical-costs.html
But, all will not be lost. Join Obama's Civilian Security Force, and you'll have your debt forgiven!
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