Students and workers seeking retraining are borrowing extraordinary amounts of money through federal loan programs, potentially putting a huge burden on the backs of young people looking for jobs and trying to start careers.
The amount of student loans taken out last year crossed the $100 billion mark for the first time and total loans outstanding will exceed $1 trillion for the first time this year. Americans now owe more on student loans than on credit cards, reports the Federal Reserve Bank of New York.
Students are borrowing twice what they did a decade ago after adjusting for inflation, the College Board reports. Total outstanding debt has doubled in the past five years ”” a sharp contrast to consumers reducing what’s owed on home loans and credit cards.
Who will be blamed for this new bubble? Wall Street, schools charging higher and higher tuition, greedy banks? Oh, of course, George Bush! Statmann
Re #1
George Bush will I believe go down as one of the worst presidents in modern American political history. But no, this at least is not his fault.
Re #2 For letting George Bush oof the hook in this case, I could feel your pain. Statmann
One way we could get the economy moving again is to reform the student loan/university cost setup. If we can bail out banks, we can provide some form of relief (perhaps in exchange for volunteerism, or something) for students so they don’t start their lives behind the eight ball, and so they can afford to live on the paltry wages they will earn when they get their first jobs these days. It would take a little heat off their parents, too, at a time when they need to be saving for retirement (as if there will be such a thing in the future).
More student loan debt than credit card debt? At least the rates aren’t as exorbitant. I just wish I could consolidate _my_ loans again to get the current rates. My one and done consolidation of under and grad school loans o-so-many years ago leaves me with little sympathy for those carrying loans at current basement rates. Not to mention that for many years my pay wasn’t anything to brag about. But I was working in my field of study and adding to knowledge in and of it.
The cost of higher education should go down, the professoriate should have it much less cushy. I think that would be a real win-win situation.
The Student debt is another housing loan fiasco in the making and case by the same problem, government subsidizing bad behavior.
The elephant in the room everybody is missing is many college graduates are really working in their field or just taking up jobs that can be done with high school degree and some post high school vocational or apprenticeship training. I see $14 an hour assembly job requiring an engineering degree. The solution is reducing the need to go to college.
[i]George Bush will I believe go down as one of the worst presidents in modern American political history[/i]
Possibly in some books. But BHO will have the leadership position for all eternity hands down!
So who couldn’t see the “student debt crisis” coming? Everytime “government” money subsidizes a sector of the economy we see prices within that sector ballooning as too much demand chases too little supply. Over and over and over and over again.
The corrections are always nasty and no doubt will be here also. In the name of good intentions, liberals once again show the disasterous results of institutional liberalism in action.
Yohanelehos (#6.) wrote:
“The cost of higher education should go down, the professoriate should have it much less cushy. I think that would be a real win-win situation.”
The professorial staff at institutions of higher learning have been exorbitantly compensated in salaries, benefits and income from their almost-annually and frequently trivially updated text materials.
The student’s bear the burden of these exorbitant over compensations.
And yet, from the ilk of the Ocuupy Wall Street protestors, there is deadening silence regarding the depredations of these professors.
The question that begs is “Why the silence?”
Well, I hold no brief for the university dons. They sicked liberalism and BO on us, and they try to brainwash our kids with their BS. When the universities finally collapse (as they will) I will dance on their graves.
That being said, the true culprit is not the dons but the government. As usual. First the government forbade companies to set their own tests of competance (out of concerns of bias). This meant that degrees became the defacto emblem of competance. A company couldn’t set a mail clerk or a secretary a test in reading and writing. The company had to accept a high school certificate. Then, as high school teachers dropped their standards, realizing that to say that this person does not understand basic grammar would make her unemployable, the college certificate became the new certification of competance. Then as college standards started to fail, the government rushed in with more regulations to “fix” the problem. Colleges now have to have courses in something like 12 different areas. I am AMAZED at what my 21 year old is expected to know at her public state college. She is required to take what is called “college algebra” but which clearly includes not only algebra 1/II and trig, but also elements that I learned in calculus. She is also required to take two lab sciences. Last semester it was chemistry, and all I can say is that in an accelerated 7 week program, this supposedly 101 level 4 credit course included both everything I learned in my inorganic chemistry class and most of what I learned in my physical chemistry course, and some of what I learned in physics (ie. knowledge gained over more than a year). When I took history in college, I could count on reading 3 books and writing two papers in a semester. She is writing a 5 page paper a week. She also has to satisfy requirements in language, art, communications, english, etc. I would say that anybody who graduates from her school would have been in the top 10% of folks who graduated when I was in college.
Now I suppose that I should rejoice that she is getting so fine an education. However the only reason she is able to handle it is that she is NOT entering into debt and she does NOT have to work. If she was trying to take loans and work her way through she would not be able to cope with the homework load, her grades would drop, her loans would spiral and she would, like most of her collegues enter the death spiral of debt and drop out status. Fewer than 30% of kids who enter her college graduate in 6 years, and fewer than 15% graduate in 4 years. They leave with a handful of credits, and a boatload of debt. They are worse off for their college experience, not better off.
Since at the end of this process, my kid’s history degree will not entitle her to do anything more than work in a clerical position, or go to graduate school she would have been better off if she had been permitted to simply take a clerical skills test and begin work without the history degree (or at least she would if she were paying for it).
The reason that universities have so many requirements (all of which cost money) is that the government requires universities to PROVE that they are producing “value” in order to be eligible for student loans. The government made universities dependent on student loans and now make them engage in behaviors that clearly damage the 70% of students who do NOT graduate in order to feed their addiction to debt.
The government requires colleges to be regulated and accredited. I could probably teach most of the classes that my kid takes myself (except of languages and literature) but I am not permitted to simply set up a school in my living room, and tutor 20 college kids to a set standard. That would be “fraud”. In order to be considered a “college” you have to meet huge requirements including having a library with Xnumbers of books (even though with the internet, none are really necessary now), your teachers need to meet certain educational criteria, you need to be publishing research papers, you need to be complying with numerous federal mandates, etc. etc.
I know that when the University of Arkansas set up a northwest campus for its medical school, although it only has 18 students, rented 5 rooms in an outdoor minimall in a cheap area of town, and just had volunteer physicians for its faculty with 1 “dean” and one secretary, meeting federal requirements cost more than 6 million dollars.
What the country needs is to either let companies set their own criteria or to simply have certifying examinations. You want to be certified as having completed college? Cool. Pass the following 20 exams (English, Biology, Chemistry and Math, History whatever) and your done. Security could be ensured by fingerprinting and retinal scanning. People could study the material themselves using cram books or they could set up informal “schools” in people’s living rooms such as the above. We would have the same educated population, WITHOUT the debt. The governmental elite does not wish that however. They prefer to enslave todays kids with debt. They figure that their own kids (who don’t have debt and who have time to complete) will have a leg up.
I will also say that the professoriate (at least at most state colleges) are not having it that “cushy”. Most of them are now teaching several hundred online students each semester, and semesters are now pushed into 7 1/2 week accelerated semesters so as to have professors teach double the number. Her math teacher said up front that he could not spare any student more than 10 minutes/week. Further, most of her professors (exept for a few tenured ones) appear to now just have a masters degree (usually in education) rather than the prior pHD. I know one of them, and he is teaching 6 courses and making about 60 thousand, and is deathly afraid that he will lose his job as departments consolidate.
In the meantime, in related news I got an email from some company in India. They wish to type up all my medical transcription at the rate of 5 cents a page (about 10% of the going rate).
So our kids who have gone into debt to get a certificate in medical transcription will get to compete with 14 year olds in India who are working for a dollar a day.
Nice.
Heart breaking. Read it all.
http://articles.businessinsider.com/2011-08-04/wall_street/29979042_1_higher-education-student-loans-housing-nightmare
The money quote: “I am not here to get involved in personal judgments of the students involved. I am here to bring attention to this reality and hope it will cause those within the fields of higher education and student lending to question, “what the hell are we doing?â€
If young women prostituting themselves is not a SCREAMING INDICATION and MAJOR RED FLAG that our nation has sunk to an entirely new depth in terms of our financial turmoil, I do not know what is.”