Mark Cuban: The Student Debt Crisis Is The Biggest Economic Problem In America

Business Insider ^ | 05/25/2012 | Mark Cuban

[SeekAndFind]

This is what I see when i think about higher education in this country today:

Remember the housing meltdown? Tough to forget isn’t it. The formula for the housing boom and bust was simple. A lot of easy money being lent to buyers who couldn’t 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 couldn’t 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 couldn’t sell. They couldn’t 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?

[Mamzelle]

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.

[Condor51]

IMHO the problem isn't student loan debt per se, but student loan debt to get a BS or BA₍₁₎ Degree that is completely, totally, and 110% - utterly USELESS in getting a REAL job after graduation. A BA in Psychology is the prime example. Even a Masters in it means squat. You need a PhD to get a REAL job in that field or you wind up flipping burgers or something just as demeaning for having a college degree.

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.

[Danette]

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.

[Danette]

This is both sad and hilarious.

http://www.youtube.com/watch?v=FbXQgVJ_V68

I wonder if she found help.

[E. Pluribus Unum]

MORAL: Not everybody should go to college.

If your kid is going to major in partying, for instance.

Or "Communications." Or "Education."

[SeekAndFind]

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.

[LoveUSA]

Wish I had a High Five emoticon to send you.

Oh well! : D

[LoveUSA]

Funny, I didn't pick up a "bail out the college students" vibe from this article.

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.