Skip to comments.Mark Cuban: The Student Debt Crisis Is The Biggest Economic Problem In America
Posted on 05/26/2012 7:51:11 AM PDT by SeekAndFind
This is what I see when i think about higher education in this country today:
Remember the housing meltdown? Tough to forget isnt it. The formula for the housing boom and bust was simple. A lot of easy money being lent to buyers who couldnt afford the money they were borrowing. That money was then spent on homes with the expectation that the price of the home would go up and it could easily be flipped or refinanced at a profit. Who cares if you couldnt afford the loan. As long as prices kept on going up, everyone was happy. And prices kept on going up. And as long as pricing kept on going up real estate agents kept on selling homes and finding money for buyers.
Until the easy money stopped. When easy money stopped, buyers couldnt sell. They couldnt refinance. First sales slowed, then prices started falling and then the housing bubble burst. Housing prices crashed. We know the rest of the story. We are still mired in the consequences.
Can someone please explain to me how what is happening in higher education any different?
It's far too easy to borrow money for college. Did you know that there is more outstanding debt for student loans than there is for Auto Loans or Credit Card loans? That's right. The 37 million holders of student loans have more debt than the 175 million or so credit card owners in this country, and more than all of the debt on cars in this country. While the average student loan debt is about $23k, the median is close to $12,500. And growing. Past 1 TRILLION DOLLARS.
We freak out about the trillions of dollars in debt our country faces. What about the TRILLION DOLLAR plus in debt college kids are facing?
(Excerpt) Read more at articles.businessinsider.com ...
Tell them to pay their way through community college, then pay their way through the closest 4-year college.
Don't tell us we owe them a bailout for ignorant decisions they made.
My daughter graduated from college, is living at home, and is working to save money for graduate school. Her friends ALL think she's crazy for not taking loans and going to school. They say she'll never go to school if she doesn't go now. What they don't realize is that, in two years, when they are finishing grad school 40K in debt and looking for a job, my daughter will have 40K in the bank AND a job (in which she's already received a promotion).
You tell me who's going to be better off.
Well gee Mark, you’re a big liberal, just how the hell do you think this happened. Money for nothin and chicks for free.
Gosh, I wonder if the bubble of huge arenas put up at taxpayer expense for the benefit of professional sports team owners, long term player contracts, etc, will ever burst, Mark, you big-time Obama sucker.
If I were leaving home and starting out today, I would not go to college - there’s plenty of opportunities elsewhere. There are so many people who’ve been sold on the idea that you need a college degree to make it in life that we have an overabundance of educated but unskilled people with useless degrees and a shortage of skilled people with useful and practical knowledge (i.e. tradespeople). The influx of illegals ready, willing and able to work hard should have taught us that you don’t need a college degree to make it in America. Additionally, if you really want and education (not college, but an education) you can get that outside of a brick & mortar institution. There are cheaper alternatives than going in hock up to your eyeballs, getting a useless degree, and being forced to live in your parent’s basement because you can’t get a job as CEO after graduating.
A degree in Community Organzing with a minor in Sexual Justice ain't gonna get you a job as a : Nurse, CPA, or Bakken Drilling Engineer of which the marketplace sometimes screams for.
The parents, kids, and guidance counselors are all to blame at that point....
Ya, what happened to the concept of working your way through college?
I may get flamed, but, I think part of the issue is that money is a taboo topic. Families and their students do not ever sit down and have frank discussions about family finances, or talk about how these loans will have to be repaid. Some families tell their kids to reach for their dreams at whatever private university they choose, and never think about how it gets paid for. Getting loans defers the day of reckoning on the money side of things.
Another matter is that so many people are enamored of sending their kids to Harvard and Yale and other expensive private universities, regardless of cost. This ties in with borrowing and not thinking about how these loans ever get repaid. Going to the state university is beneath certain “yuppie” types. My God, they need to go to Harvard, Yale, Stanford, or Princeton, not old State U.
Financially, the best way for most middle class people to go to college is to work their way through. It might take them longer than the standard four years to get a degree, but financially, they will be much better off at the end.
There are also ancillary benefits to working your way through college. If you have to be responsible about studying and your work schedule, you learn some good life lessons along the way. Some college kids have too much time on their hands, and go out drinking and God knows what else when not in class.
Hey Mark, suck on a big Cuban cigar!!!
Hey Mark, all the debt is a problem. Also Mark you voted and promoted the people who create more of the problem.
Nobody tells them that indebtedness is slavery by another name. What they need is an understanding of the nature of freedom and how to identify its enemies.
Back in the late 1970's, there was a small book entitled, "Freedom in a Nutshell," by Dr. Kenneth W. Ryker. It was, and is, a priceless work which was published in two parts by FEE, the Foundation for Economic Education, and now can be read in two parts, here, and here.
"Freedom in a Nutshell" should be widely distributed today to the youth of our country. They could look around them and see evidences of the truths he outlines in such simple, yet profound, terms.
While I agree that the best way to go these days is to start out at community college and then finish up at a local, public, or otherwise affordable 4-yr college is the way to go--
Price out that 4-yr college. Have you attended college lately? I was a student in the seventies, and college was practically FREE for me. It was the dorm, books and gas that cost money.
We gave him a free place to live and free food. He did the rest.
Will the government at all levels look the other way for Americans to break laws the way the illegals have been allowed? I don't mean just crossing the border; I mean fracturing single family residential zoning laws, etc.
400% inflation since 1980?
The reason college costs have increased 500% (depending on your source) since 1980 is precisely because 18-year olds were willing to borrow the money, and the government was willing to enable them.
That 500% far exceeds the inflation rate during that time.
And some of that inflation is why we’ve seen increases in student loan debt in recent years. People are borrowing a bigger percentage of college costs than in years past. But the issue is whether it is worth it, to borrow so much for college?
We could discuss whether these loans are a good return on investment. For example, getting a degree in nursing or accounting, fields which lead directly to careers in the private sector, may show a payoff even after loan costs are considered. The relatively high rates of pay for certain careers could be considered, as to whether it makes sense or not to borrow to pay for such an education.
But if you get a degree in women’s studies, for example, what career path is open to you with such a degree? Are you really going to qualify for a job which pays enough to enable you to pay off the loans it took to get educated in women, in this example?
“Will the government at all levels look the other way for Americans to break laws the way the illegals have been allowed?”
Not likely. Americans have papers, illegals don’t, so we’re easier to catch and prosecute.
Laws are made for the law abiding.
I really don’t know what to do here. What bothers me is that there might be some sort of “forgiveness” (which I believe to be an OUTRAGEOUS idea), and then loans tightened up a lot without any corresponding price drop in education (have you ever seen the price go DOWN on anything that is not a piece of consumer electronics). This would effectively “pull up the ladder” for others.
Do these loans need cosigners and if so, aren’t they the ones who should be most concerned?
How does the tuition of UH compare to now, from 12 years ago?
My daughter is 19. She takes 3 clases at the community college. With books, 800 bucks. And now she is working full time.
The entire reason that education costs have gone up 10 times the inflation rate is because students were willing to borrow the money.
If you are not willing to break the cycle, you deserve to suffer the consequences, not the taxpayers.
No problem ... it’s all going to be inflated away.
I'm pointing out that parents and students are caught in a changing paradigm, where they cannot provide for their children what their parents provided for themselves...and end up falling for the trap that the despicable University crooks have set, along with the government. This is distressing.
Why can't the middle class afford to send their own kids to college, the way they went themselves? It's not like the education has improved along with the higher costs. I know why, of course (rhetorical question)--it's because a bunch of ne'er do wells have glommed on to the "academic life" of no work and lots of leisure and huge benefits...
I despise these slacker, thieving PhDs.
Obama is going to make the banks FORGIVE all student loans they hold and the government now controls all the rest, so with his signature, ALL DEBTS for SCHOOL DISAPPEAR!!! EVERY PARENT AND STUDENT WOULD VOTE FOR HIM!!!!!
He's a HUGE DEMOCRAT CREEEP.
The better the private school, the CHEAPER it is for middle class and working class kids, because of more generous grant financial aid. At the high end, private school can be cheaper than public: if your parents make under $100,000 Harvard and Yale are FREE. The big scam is low-end private schools; they suck out every dime and deliver less than a public school at half the after-grant cost. (Honest for-profit schools are a better deal than low-end private: cheaper tuition than private and no misleading airs about prestige.)
Many of these loans are the result of money hustlers in cahoots with the schools and universities. Many so called students shouldn’t be given money/funding for these schools as they, the students, just are not capable of handling the course studies/academics the schools should be offering for life’s sustenance and societal purposes. To go into years of debt to learn or be told that there are many kinds of people you have to get along with in life,for example, is folly.
When these articles and opinion pieces appear, when Obama mentions it, I just have this gut feeling that the ultimate intended step is to allow discharge of student loans in bankruptcy. Which, because of the proportion of government backed student loans, is a transfer from taxpayers to student debtors.
That was never part of any sort of implicit social contract re: student loans. Taxpayers may have subsidized the interest rates on the loans, but it was never assumed they would shoulder principal and interest. It will be an outrage if taxpayers, many of whom never got near college, end up taking this hit.
If you're expected salary will not allow you to pay off your student loans, ever, then you cannot afford a college education.
Besides which, most college degrees nowadays are garbage.
If you're not majoring in a hard science of engineering, you're majoring in BS and would be better off getting a job.
You do realize that Bill Gates does not have a college degree?
The ability to send one's child to college (BTW, I managed to do so three times and I am safely out of this woods) is part of the American Dream, whether or not you can afford it.
We *used* to be able to afford it easily. A BA degree *used* to be more meaningful.
College tuition, even for non-Ivy or "unimportant" schools is now unaffordable, not because of feckless families but because of a corrupt relationship between BigEd and the government--student loans and excessive lending and borrowing.
You are repeating the point that we shouldn't bail out the loans. Of course we shouldn't. But the loans should not have been made in the first place--they created an appetite for BS studies and they created phony jobs for PhD slackers and grad students.
I agree with what you said, but I'd like to point out that the fact that we can no longer afford college tuition is a stunning setback in the American standard of living.
We have gone way, way backwards. Our kids will have it much worse than we did.
No need to read any further.
You're obviously not a big believer in reality.
There are million of children who shouldn’t even have their eyes on college...they just aren’t cut out for it. Of course; our industrial base is gone, so they are just SOL.
And whatever you learned in school, it sure wasn’t manners. I suppose your kids are as rude as you? Maybe they just weren’t college material.
And as far as the fact that I pointed out that you don't believe in reality when it comes to your "feelings," check it off to tough love.
“Laws are made for the law abiding.”
Exactly! That’s why they don’t bother the illegals - too much paperwork.
You are assuming that college is absolutely essential - it’s not. And if you do want your kid to go to college, there are a lot of choices - you can even go to college online now. There’s also the military services and service academies.
Also, don’t forget - you don’t owe your kid a college education. If they want it, they’ll find a way to get it.
I guess you can read ONE sentence per post. If you weren’t such an impatient and pompous jerk, you would have seen I was agreeing with you.
Seriously, I KNOW a young man who has a BA in Psychology (so does his wife, its how they met) and the best job he can get, and which he has, is a Shoe Store Manager. So after all that time, effort and money (debt) he's a real life: Al Bundy! [If he was my kid, I'd have killed him!]
So it's things like that which are strangling the kids with debt. Useless degrees they can't use, so they can't pay back the loans, and they went for those degrees in the first place for... only God knows why?!?
(1) Personally I believe any 'Arts degree', the A in BA, is a waste of time, money, and energy unless you're doing it for kicks. Like a hobby and get a Bachelors Degree in Ancient Greek History.
My son just graduated from college last Friday. His major is computer science. He’ll be working for a well known .com making 65,000 starting next week. All the other computer science majors he graduated with (15) also found jobs easily.
All I heard at the graduation ceremony last week were parents worried their graduate won’t find jobs. Some of them think their child should go get their masters now and wait out the economy.
My son got through college on a scholarship. He lived at home, interned, and worked.
This is both sad and hilarious.
I wonder if she found help.
If your kid is going to major in partying, for instance.
Or "Communications." Or "Education."
Statistics show that close to A THIRD of those who go to college in America DROP OUT without graduating.
Another 25% take close to 6 years to finish college.
Clearly we have TOO MANY college students and not everyone is cut out for it.
We ought to look into emulating what the Germans do. All children enter in the same program, but at the age of 10, they go to one of four types of schools. The track that they enter determines which type of school they can next enter, and finally, weather they will go to a university or enter a technical field or trade school.
Oh well! : D
I really thought it was about how stupid it was to lead young people down the path to oppressive debt.
Your point will be considered. Mark doesn't seem like a huge lib on Shark Tank. I always thought he was just an ego maniacal man-child who has the cojones to go after what he wants.