Education

Worrisome Analysis: Is a Coming Student Loan Crisis the Next Bubble to Burst?

 

Worrisome Analysis: Is a Coming Student Loan Crisis the Next Bubble to Burst?

AP

First the dot.coms popped, then mortgages. Are student loans and higher education the next bubble, the latest investment craze inflating on borrowed money and misplaced faith it can never go bad?

Some experts have raised the possibility. Last summer, Moody’s Analytics pronounced fears of an education spending bubble “not without merit.” Last spring, investor and PayPal founder Peter Thiel called attention to his claims of an education bubble by awarding two dozen young entrepreneurs $100,000 each NOT to attend college.

Recent weeks have seen another spate of “bubble” headlines — student loan defaults up, tuition rising another 8.3 percent this year and finally, out Thursday, a new report estimating that average student debt for borrowers from the college class of 2010 has passed $25,000. And all that on top of a multi-year slump in the job-market for new college graduates.

So do those who warn of a bubble have a case?

The hard part, of course, is that a bubble is never apparent until it bursts. But the short answer is this: There are worrisome trends. A degree is an asset whose value can change over time. Borrowing to pay for it is risky, and borrowing is way up. The stakes are high. You can usually walk away from a house. Not so a student loan, which can’t even be discharged in bankruptcy.

But there are also important differences between a potential “student loan bubble” and an “education bubble.” Furthermore, many economists think the whole concept of a bubble is a misleading way to think about what’s happening, and may actually distract from the real problems. College affordability is a serious issue, but it’s a different one. Borrowing for college and borrowing for, say, a house, are fundamentally different in important ways.

To be sure, there are some classic bubble warning signs:

—Everybody wants in. The idea that higher education is the only way to get ahead has become widely held. College enrollment has surged one-third in a decade. With rising demand, college tuition and fees have more than doubled over that time, outstripping inflation in every other major sector of the economy — energy, health care and housing, even when housing was bubbling itself.

—Those bills are paid with borrowed money. The volume of outstanding student loans is rising rapidly and now exceeds credit card debt, though recent reports of it crossing $1 trillion may be premature. Moody’s Analytics puts the number at around $750 billion. But while credit card debt is declining, student loan debt keeps going up.

—Just like housing, many student loans were made with little or no research into whether borrowers were fit. Federal Stafford loans are basically automatic for college students, and government backing for other types of loans gave other student lenders little reason to be picky.

—Defaults on federal student loans jumped from 7 percent to 8.8 percent in the most recent fiscal year. That measures just recent borrowers who were already behind within two years of their first payments coming due.

Those numbers are all alarming. But putting them in context requires thinking separately about the ideas of a “student loan bubble” and an “education bubble.”

First, one thing that’s important about the possible student loan bubble is that it poses much less of a threat than housing debt did to drag down the entire economy. Yes, many individual borrowers may find themselves in trouble. But total student loans probably amount to less than 10 percent of outstanding mortgages. Every single student loan could default and it still probably wouldn’t match total mortgage defaults during the recent downturn. More importantly, unlike mortgages, Wall Street isn’t knee-deep in securities comprised of bundled student loans, as it was with mortgages. (It also helps that it’s also harder to speculate in student loans; an investor can flip a house, but not a brain.)

The other big difference with student loans is the dominant role the federal government has assumed in the market in the last few years: it accounts for roughly 85 percent of student debt.

That matters for several reasons.

First, the government is answerable to voters and not shareholders, so it’s more likely than private investors to take steps such as those announced by President Barack Obama to try to relieve student debt burdens.

Second, notes Mark Kantrowitz of the website Finaid.org, it’s important to remember what actually causes a bubble to burst. It’s not simply a run-up in prices. What bursts the bubble is a liquidity crisis, when borrowers suddenly can’t get the money they need. Even during the depths of the 2008 financial crisis, when private student loans dried up, the government’s dominant role kept student loans flowing.

That doesn‘t guarantee the bubble won’t slowly and painfully deflate over time. But it insures against the chaos of a “crash” where suddenly students can’t get loans at all — a scenario that could shut down untold numbers of colleges whose students rely on financial aid.

None of that, however, changes the fundamental risk for individual student borrowers: they could borrow heavily to pay for a college education and find the return much less than expected.

It’s here, looking at the debate from an individual borrower’s point of view as opposed to the entire economy, that the debate over the term “bubble” gets tricky. Can an education lose value?

Certainly a college degree can.

A key measure is the wage premium for bachelor’s degree recipients over those with just high school diploma, and there are various ways to measure it. All show the wage premium is substantial, though after rising steadily for years it appears to have slipped some lately. Wages for the median bachelor’s degree recipient are roughly $55,292, compared to $34,813 for those with only high school, according to the latest data from Georgetown University’s Center on Education and the Workforce.

That reflects a premium that has fallen from roughly 67 percent a few years ago to 59 percent (the latest Bureau of Labor Statistics data put the 2010 premium at 65 percent for weekly wages). Still, all told, estimates for the lifetime earnings advantage of a college degree range from a conservative $500,000 to more than $1 million, according to the Census Bureau. Even with recent price increases, for the average student loan borrower that remains a very high return on investment.

It’s true the unemployment rate for new college graduates is more than 10 percent. But unemployment for college graduates overall is 4.2 percent, compared to 9.7 percent for those with a high school degree.

Could college prices rise so much, and the premium fall so far, that a degree is no longer worth it? Of course, for some degrees. But in a modern economy, it’s difficult to imagine that happening across the board. Here’s where a degree is truly unlike other assets — most should correlate at least somewhat with skills that are useful in the world. Particular degrees may prove bad bets, but to imagine the premium on education itself dropping off a cliff is to imagine a world where things have gone so wrong that job skills no longer matter.

Or, as Kent Smetters, an economist at the University of Pennsylvania’s Wharton School, puts it: “In that case, nobody’s worried about paying back their loans. Everyone’s heading for bunkers in Idaho and canned goods and that kind of stuff.”

Here’s the rub: Nobody earns a generic “college degree.” Degrees are earned from different schools, with different reputations, and in different majors with much different payoffs. What counts most, says Georgetown’s Anthony Carnevale, are the courses you take and your major. Roughly 30 percent of associate‘s degree recipients earn more than people with bachelor’s degrees. A graduate with a mere certificate in engineering will earn roughly 20 percent more than the average bachelor’s recipient.

That suggests there isn’t one big bubble, but many smaller but significant ones stretching across different sectors — certain liberal arts grads, artists, lawyers who borrow six figures for law school and can’t find a job, and students at for-profit colleges. The signs of a bubble at for-profits are unmistakable: Enrollment has tripled in a decade, roughly 96 percent of graduates have loans and borrowing is substantially higher than at other types of institutions. Default rates recently jumped to 15 percent.

But what’s most important is the huge numbers who never earn a degree at all. At community colleges and for-profit schools, roughly one in five aiming for a bachelor’s degree fail to secure it. Even at four-year public universities, the failure rate within six years is almost half. Anyone who borrows a large amount of money and then fails to complete a degree is in a world of hurt — quite possibly worse off than if they’d never even tried to go to college in the first place.

Comments (234)

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  • paperpushermj
    Posted on November 6, 2011 at 10:36pm

    In hindsight being an electrician would have been better.

    Report Post » paperpushermj  
    • WAKEUPUSA2012
      Posted on November 6, 2011 at 10:54pm

      lol

      Report Post » WAKEUPUSA2012  
    • artistskeptic
      Posted on November 6, 2011 at 10:55pm

      Can you imagine any moron who would take more than $100k in loans to get a degree in Art History, Sociology, or Psychology or other basket weaving equivalents?? Those are just loans to party and smoke dope for four years!! Ah!..*******, the party is over, flip the damn burgers and repay the party loan or have your worthless ass put in jail..

      Report Post »  
    • AhLeahIris
      Posted on November 6, 2011 at 11:05pm

      ROFLMAO! Should have stuck with something practical. This bunch of tools don’t look fit to dig ditches. “Oh, whine, I got my bachelors in Art History and can’t find work…“ or ”Oh, woe is me, I have been in school five years, and all this time in my parents’ basement has been devastating to me.”

      Let’s move along. Pay your bills. It’s what people who make bills have traditionally done.

      Report Post » AhLeahIris  
    • joe conservative
      Posted on November 6, 2011 at 11:15pm

      It’s amazing how some of these students rack up huge student loans, taking meaningless coarses, and yet they can‘t figure out why they can’t get a good job. Now, on top of it, they don’t want to pay back the loans. http://www.youtube.com/watch?v=ss_HvByUxVg

      Report Post » joe conservative  
    • The10thAmendment
      Posted on November 6, 2011 at 11:18pm

      If you can’t afford something, you don’t buy it. It’s that simple. You got debt, you do the work necessary to pay that debt. If you can‘t find employment because your personal interest studies in College isn’t rewarding, it’s your own damned fault.

      Pay your freaking debt and stop blaming others for your stupidity.

      Report Post » The10thAmendment  
    • wtfhappend
      Posted on November 6, 2011 at 11:39pm

      Artist I have a Maters in Psychology and its far from a waste of time. The mental health field is very real and lucrative so long as you stay away from county and state jobs. However working with veterans is far from a waste of time.

      Report Post » wtfhappend  
    • Shiroi Raion
      Posted on November 7, 2011 at 12:03am

      Yessiree. A world of hurt. I worked at near minimum wage and paid for 79 out of 80 classes, and a few extras, that I needed for my degree and then the economy tanked and I lost my job. The timing couldn’t have been worse. I still owe $1600 and I have almost nothing to my name. I would have been MUCH, MUUCCCH, MMMUUUCCCH better off if I never went to college at all and just concentrated on finding a trade to learn or joining the military.

      Report Post » Shiroi Raion  
    • TexasKnight
      Posted on November 7, 2011 at 12:07am

      My daughter is a senior in High school. All of her counselor have told her, that “not having any money is not a good reason to not go to college. Do not worry about the costs, you can get loans to cover them.” Any wonder these students have a sense of entitlement?
      My wife works for a Community College. She is constantly dealing with students that can not pass a college class, but are still there because the government gives them cash to go. Some for years, and havent passed a class. Of course the ones that actually can do the work, should feel entitled when they see there classmates getting paid to fail.
      We need to stop the entiltements now. Not just for college. It is the whole mentality.

      Report Post » TexasKnight  
    • smokeysmoke
      Posted on November 7, 2011 at 12:30am

      so let me get this right….. you want to borrow money from a bank so that you can pay a college to go to school….. then when you realize it was alot of money that you borrowed, you get upset and start to protest that the government should pay the banks back for your student loans…. ISENT THIS THE SAME AS A BAIL OUT FOR THE BANKS AND UNIVERSITIES… THEY ARE ALL PASSING AROUND FEDERAL CASH, and what are people really learning unless your going for law medical or something specific….. to recap YOU BORROW MONEY FROM BANKS SO THAT YOU CAN PAY YOUR UNIVERSITY… THEN DEMAND THAT THE FEDS GIVE YOU MONEY SO THAT YOU CAN PAY YOUR BANK…. THE ONLY THING MISSING IS YOU PAYING

      Report Post » smokeysmoke  
    • mwhaley
      Posted on November 7, 2011 at 12:52am

      Dave Ramsy constantly gets calls from kids starting out in life owing over $100k in student loans. These kids do not have a chance shackled to this kind of debt this early in life. I tend to agree that college has turned out to be nothing more than a scam. I grew up in a time where only the rich went to college and the poor went straight to work.

      Report Post »  
    • Ookspay
      Posted on November 7, 2011 at 1:00am

      Funny how these masters of higher edu-ma-cation have not seemed to connect the dots and stumble upon the fact that the universities and proffesors have been extorting ridiculously high tuition costs from them for years. No it is far too easy to simply blame lenders and wall street for the fact that they graduate deep in debt and shallow in practical skills.

      When I hire new employees I could not care less about degrees, I look for values, Intelligence and common sense. Then I train them on the particulars of my industry which change much more quickly than the time it takes to graduate from a four year degree. I pay them very well and they never leave.

      Report Post » Ookspay  
    • therapist
      Posted on November 7, 2011 at 1:01am

      To the person who thinks that having a degree in psychology is worthless, I have a master’s degree in psychology. The last thing it is, is basket weaving. I spend my days helping people. We help those who suffer from depression, and a host of other serious medical conditions. I hope you never have to use the services of a psychologist, but if you do, you should hope it isn’t me.

      Report Post »  
    • Stink Fist
      Posted on November 7, 2011 at 1:06am

      The real problem is that us college students spend 2 years taking classes on things we should of learned in high school. Math, history, english. Crap like that cost a ton. I could just learn what I need for my trade. I’m in web dev. Do I really need to take another history class by a socialist teacher?

      It’s simple. School needs to be reconfigured. Time spent for the equivalent of a bachelors should only be a year. Condensed and fined tuned education.

      I’m almost done and honestly I can say that it would only take me three to six months to learn what is required to start a career in web dev. Basically everything I know now throwing out all the useless crap on top of it.

      Report Post »  
    • The10thAmendment
      Posted on November 7, 2011 at 1:35am

      @ TexasKnight
      Posted on November 7, 2011 at 12:07am
      ———————————————————————
      My friend that was a brilliant post. Your daughter is going to succeed BECAUSE it appears her father is raising up a responsible and character driven ethic.

      Report Post » The10thAmendment  
    • RepubliCorp
      Posted on November 7, 2011 at 1:53am

      THERAPIST
      (To the person who thinks that having a degree in psychology is worthless, I have a master’s degree in psychology. The last thing it is, is basket weaving. I spend my days helping people. We help those who suffer from depression, and a host of other serious medical conditions.) All you do is tell these people it’s okay to be nuts and hand out ritalin. You never cured a soul, be honest you are nothing more than a voo-doo doctors

      Report Post » RepubliCorp  
    • Rent A Yenta
      Posted on November 7, 2011 at 5:03am

      Funny you say that. I have identical twin sons. One has a master’s degree but he now works as an EMT and barely makes ends meet. The other worked summers and weekends with an electrical contractor while in high school and is now a commercial electrical contractor himself and VERY successful. A college degree is no guarantee of success. Hard work and determination are the key.

      Report Post »  
    • chazman
      Posted on November 7, 2011 at 5:54am

      … yeah, be an electrician … I guess gettin’ yer balls shocked off from time to time IS better than having a $100,000 student loan debt …

      Report Post »  
    • GBTVFan_Non_American_Overseas
      Posted on November 7, 2011 at 6:29am

      Yesterday, this guy SBUT01 mentioned the Georgetown University’s Start Trek degree, and I thought it was a joke, but intrigued I looked into if there were such ridiculous courses, and I found this gem: The 25 Strangest College Courses, and I don’t know, but the list gives some context to the OWS’ers mentality to me. I wouldn’t know where to start if I have to choose my favorite.

      1.Mail Order Brides: Understanding the Philippines in Southeast Asian Context. Johns Hopkins University
      2.Tightwaddery, or The good life on a dollar a day. Alfred University.
      3.The Phallus. Occidental College.
      4. American Dreams/American Realities. Duke University.
      5. Cultural Aspects of Food: The College of Oneonta.
      6. The Evolution of Low Brow: Modern Popular Arts. Canada’s School of Interactive Arts and Technology.
      7. Whiteness: The Other Side of Racism. Mount Holyoke College.
      8. Sex, Rugs, Salt & Coal. Cornell University.
      9. The Adultery Novel In and Out of Russia. University of Pennsylvania.
      10. The American Vacation. University of Iowa.
      11. Queer Musicology. UCLA.
      12. Finding Dates Worth Keeping. University of Sioux Falls.
      13. The Art of Sin and the Sin of Art. Rhode Island School of Design.
      14. Art of Walking. Kentucky’s Centre College.
      15. Daytime Serials: Family and Social Roles. University of Wisconsin.
      16. The Science of Harry Potter. Maryland’s Frostburg University.
      17. The Road Movie. Barnard College.
      18. Maple Syrup: The Real Thing. Alfred University.

      Report Post » GBTVFan_Non_American_Overseas  
    • GBTVFan_Non_American_Overseas
      Posted on November 7, 2011 at 6:30am

      19. American Golf: Aristocratic Pastime or the People’s Game?. Carnegie Mellon.
      20. Nonviolent Responses to Terrorism. Swarthmore College.
      21. Border Crossings, Borderlands: Transnational Feminist Perspectives on Immigration. University of Washington.
      22. Philosophy and Star Trek. Georgetown University.
      23. Star Trek and Religion. Indiana University.
      24. Campus Culture and Drinking. Duke University.
      25. Learning from YouTube. Pitzer College.

      http://www.collegedegree.com/library/college-life/top-25-strangest

      Report Post » GBTVFan_Non_American_Overseas  
    • TomFerrari
      Posted on November 7, 2011 at 7:04am

      This is why I am so passionate about education! It is theKEY to the future.
      Upon moving to TX, I began reaching out to others who would like to create an entirely NEW curriculum an content for home schooling. Then, Glenn announced similar efforts underway at Mercury One. So, I am offering myself up to help in any way I can. But, repeated e-mails to askrog have gone unanswered.
      The frustrating part is, throughout a 40-day-challenge, I prayed for guidance. I felt my prayers were answered by a friend who asked me to help them find work in Dallas. This led me to move back here this summer. Then Glenn announces he is moving here as well. He also announces similar efforts. I don‘t think Heavenly Father’s plan for me could be made any more clear, short of stone tablets.

      If ANYONE knows how to put us in contact, please do so. I will continue on my own, but, it seems to be God’s will. I have decades of skill and talents. I do not want to stand before Heavenly Father and have to answer for what I have done with them, if I do not heed His call. Here am I, Lord, send me!

      Report Post » TomFerrari  
    • smithclar3nc3
      Posted on November 7, 2011 at 8:07am

      Can you imagine any moron who would take more than $100k in loans to get a degree in Art History, Sociology, or Psychology or other basket weaving equivalents?? Those are just loans to party and smoke dope for four years!! Ah!..*******, the party is over, flip the damn burgers and repay the party loan or have your worthless ass put in jail..
      You’re 100% correct.
      You couple that with the everyone gets a trophy mentality and it’s a recipe for disaster.

      Report Post »  
    • Obama_Sham
      Posted on November 7, 2011 at 8:08am

      @Chazman

      “… yeah, be an electrician … I guess gettin’ yer balls shocked off from time to time IS better than having a $100,000 student loan debt …”

      Only if you don’t understand what you are doing and / or don’t respect electricity… After 14 years of being a Journeyman Electrician with a BSEE and an MS IT Project Management, I have only been shocked 1 time and that was when I first started learning the electrical trade…

      Being a Journeyman Electrician is a good trade and can be very lucrative… The hard one to decide on doing is if a Journeyman wants to become a Master electrician… I chose the degree route instead of becoming a Master electrician…

      Report Post » Obama_Sham  
    • cosette
      Posted on November 7, 2011 at 8:21am

      @ Artistskeptic- Bravo!! My sentiments exactly! I can see it coming. These irresponsible malcontents are the next hoard of rapacious parasites in line to feast at the bailout smorgasbord. We, the responsible taxpayers, who live within the limiting parameters of our income, will then be responsible for their poor judgment. I have always been outraged by the concept of one citizen being made responsible for the poor life choices another. Up until recently the “tax eaters” were limited to the “poor”, most of whom were victims of their own sloth and or stupidity. Now, under the leadership of the Mullah in chief, the welfare mentality has become an epidemic and has grown to include the financially ignorant. My outrage has increased tenfold to the boiling point. Fiscal sanity must be the battle cry for survival. Pray for a visionary to rise to the challenge in 2012.

      Report Post »  
    • yougottabekidding
      Posted on November 7, 2011 at 8:43am

      Two things!
      Talk to the institutes of higher learning that are over paying the teachers. Oh forgot they are union with collective barganing that we who pay the public service have no right to complain about. Just pay the high wages and protect them no matter what. Okay I guess you can not protest them.

      Second: If you can not afford it why did you commit to it? Oh yea, you think I should pay for your education. Guess what I’m paying for my kids, I’m running out of money to pay for yours.

      Report Post »  
    • Ampleforth
      Posted on November 7, 2011 at 8:43am

      When college representatives visit a high school, wooing kids to attend their school, it should be a requirement that an independent financial representative, working in the interest of the student, must accompany them. In prep school, kids are only hearing one half of the college story.

      The higher education bubble must pop.

      Report Post »  
    • ashestoashes
      Posted on November 7, 2011 at 8:59am

      Good Morning America!! Did you know that while all the obsession on OWS was going on…remember the union leader telling the crowd..that in order to achieve their goals..they needed to occupy..occupy, occupy?
      Well guess what‘s been going on behind the scenes that hasn’t been reported? Obama passed the Amnesty Act Friday. by Executive Order. last Friday with little or no media coverage.. meaning that the illegals will be granted amnesty for either enrolling in college or enlisting in the military… So now our tax dollars can go on supporting much more college enrollment at our expense… Wake up!! Wake Up!! Ron Paul 2012

      Report Post »  
    • chrisden
      Posted on November 7, 2011 at 9:00am

      Higher Education today is not “higher education”. They have dumbed down everything and included stupid majors that no one can get a job with so they all become government workers. We need a manufacturing base again to get this economy going. Many of the individuals should go to trade schools to learn to do something worthwhile.

      Report Post »  
    • FormerLib
      Posted on November 7, 2011 at 9:29am

      This is what happens when government, with the best of intentions, intervenes and skews the market. The only reason any college degree costs 100k is because government guarantees the loans. The state university here has seen a 9 to 12 % increase in tuition every year for the past 5 years, even when inflation was 3 %. Meanwhile, tenured faculty members, administrators, and so on are all paid 6 figure salaries. It’s madness. My own son went to a private university for pre-med studies. Their tution increased by 11% every year for the four years he was there.There is no reason for it except that government guarantees the money will be paid to the school. Just one more thing government intervention causes to spiral wildly out of control.

      Report Post »  
    • YoungBloodNews
      Posted on November 7, 2011 at 9:39am

      Higher education these days is a joke. College is more like a Marxist boot camp with all these progressive professors. When the TEA party started I had a college phil. teacher go on and on each day about how wrong they were and how calling out our ‘chosen officials’ on their BS was unAmerican. I told him dissent is American, rebellion to tyrants IS obedience to God (yes this was a ‘catholic college’ and these pukes could care less about God).
      Needless to say I left the next semester, gotta say the nice little letter telling me Id be paying 8% more the next year to help them ‘grow’ the school: aka build more useless crap like a ‘diversity’ center, new sports building, and add more students to the already over-crowded classrooms helped too.

      Bottom line: college is not the traditional education it was long ago, its simply workforce training and getting you to be a cog in the machine. This WAS by design. Read: Deliberate Dumbing Down of America, its #1 amazon seller in history of ed. and FREE online.

      Go to college if you want to study the sciences, or math, possibly history if its a good school. The rest are crap majors and you can most likely teach yourself with books and the net.
      Sadly I realized this too late and had to start (somewhere else) changing from a business major to history and religion.

      PS This is the fault of the ‘everyone must go to Uni.’ and the looking down upon vocations and trades which built our nation…

      And no I have no DEBT or Lo

      Report Post » YoungBloodNews  
    • wynnsjammer
      Posted on November 7, 2011 at 10:18am

      You know back when I was growing up, if you didn’t have the money for college “You Did Not Go”. You went to a technical school or worked your way up the ladder. Or you went to college long enough to fit your budget. What is going on with this up coming generation where they feel they are owed so much. What a “Greedy” generation.

      Report Post »  
    • oneshiner
      Posted on November 7, 2011 at 10:25am

      REPUBLICORP: I’m inclined to agree with you. I went years ago for a problem and found out after first visit, this person was full of it and had more problems than I did, and knew they could never help.

      Notice the so called celebs who go into therapy and never seem to get help? Wonder how much therapy Charlie Sheen has had? Best to go see your pastor or priest and learn to pray for God to
      give you the help you need. If God is for you, who can be against you?

      Report Post »  
    • YoungBloodNews
      Posted on November 7, 2011 at 11:24am

      @WYNNS

      Sorry, gotta blame the parents and parenting (or lack thereof) for the current ‘greedy’ children…

      This is what you get when you expect the public schools and TV to raise your kid.

      Report Post » YoungBloodNews  
    • JRook
      Posted on November 7, 2011 at 2:02pm

      Its a problem now because it was a problem 30 years ago when many of the late baby boomers took loans and did not pay them off on time or in there entirety. Another good example of where the baby boomers want to enjoy their money at the expense of investing in their children and the community at large the way their parents did. Interesting to note that in the 1970′s Ohio and most other states covered 70% of the cost of state universities and colleges. Today that support is down to 17% of the costs. It is shameful that my generation that has amassed significantly more wealth than their parents, would rather cut taxes than invest in the education of the next generation. My father constantly reminded us that the way to pay him back was to similarly invest in his grandchildren. Although 4 out of the 6 of us earned scholarships, he did pay for the other 2 and helped the 4 of us with other costs that were not covered. Education, even higher education is a social good and entrance and graduation should be based on merit. For those who can make the grade so to speak, we should go return to the 70% model.

      Report Post »  
    • JRook
      Posted on November 7, 2011 at 2:34pm

      @YoungBloodNews great answer, wrong question. The greedy here are the baby boomers who had the advantage of attending college when the states and federal government footed most of the bill. Now after decades of cutting taxes and shifting costs to their children’s generation they wonder why there is a loan problem. Again, in the 1970′s states covered 70% or more of the cost of state colleges and universities and now it is down under 20%. Baby boomers would rather live in their MCmansions and drive fancy cars then pay it forward.

      Report Post »  
  • Azzman
    Posted on November 6, 2011 at 10:34pm

    Yes.

    Report Post »  
  • SchenectadyScott
    Posted on November 6, 2011 at 10:30pm

    If people didn‘t borrow money they don’t have for an education…that would drive down the price of an education….Is there any responsibility taken or enforced when one borrows someone’s money. Could you imagine people in the Great Depression…borrowing money to go to school….You didn’t go to school…the workplaces trained and educated their workforce not the schools..It is all backwards and it is expected as an entitlement….

    Report Post »  
    • mils
      Posted on November 6, 2011 at 11:00pm

      OMG…do like the rest of us did….work and pay for college as you go..
      .
      NO FREAKING LOANS AND NOT PAYING THEM BACK!! dumb azzes

      PAY THose loans BACK or don’t borrow the money..from me and every other American !!!! It would have been better to get a degree in snot art…

      Report Post »  
    • LibertarianRight
      Posted on November 6, 2011 at 11:45pm

      Plus, the idea that everyone needs or deserves a college education is pretty stupid. We have this idea that everyone getting an education leads to a more prosperous nation. In reality, it works the other way around – prosperity leads to an increased need for education.

      Face it, folks, when everyone has a bachelor’s degree, you need a master’s to stand out. And then we pay for everyone to get master’s and then you need a PhD. And all the while, the universities bilk the taxpayer and the bank for millions to provide essentially nothing except comparatively few engineers, businessmen and scientists. Oh, and graduates that went through the requisite amount of liberal indoctrination.

      Of course there is a bubble coming. And it could all be fixed by returning to a free market in education and realizing that being a plumber or IT guy is far better for a career than getting an English or “Cultural Studies” degree. As this won’t happen, expect the degree to become effectively meaningless in any non-technical field soon, and the bubble to result in a crash.

      Report Post »  
  • South Philly Boy
    Posted on November 6, 2011 at 10:25pm

    DemonCrats give away the STORE just to GET VOTES

    Report Post » South Philly Boy  
    • hillbillyinny
      Posted on November 6, 2011 at 11:33pm

      Originally an “Upper Darby girl,” I agree @ South Philly Boy!

      I worked for a number of years before taking a course or two at a “Main Line” university, was successful, already had a good job but found a job at the university in order to earn tuition remission–half price for two years, free after that. Two courses a semester, three semesters a year, tested out of several freshman classes, degree in about eight years. Good place to work, all worth it!

      Just “love” the dems giving away my money that I worked more than forty-five years earning!

      Report Post »  
  • taxpro4u03
    Posted on November 6, 2011 at 10:19pm

    More and more young people are beginning to ‘get it.‘ Institutionalized ’public‘ education does NOT afford one a ’gold star’ one-up on landing that income producing ‘job’ allowing for upward mobility within the ‘company.’ Autodidactism is the way to go for an education. Find something you LOVE to do. Find someone who’s successfully DOING what you want to do. Create your own ‘apprenticeship’ to learn the trade/business. Cuts your learning curve by 80%. The world needs more advocates and antagonists.

    Report Post »  
    • SchenectadyScott
      Posted on November 6, 2011 at 10:37pm

      Great statement….I have been an Autodidact all my life….now I have to go back to college, just to prove and receive a degree I received in High School….I was in advanced electrical engineering classes that was the GE apprentice program 30 years ago…All I am doing now is relearning everything I was taught 30 years ago, because my High School degree is not recognized as a higher level degree. It is insane…

      Report Post »  
  • abbygirl1994
    Posted on November 6, 2011 at 10:04pm

    Go to your schools and raise the stink.. or the government loans you applied for.. its no ones fault but your own.. you barrowed it, no one forced you to get these loans..

    Report Post » abbygirl1994  
    • This_Individual
      Posted on November 6, 2011 at 10:54pm

      I’ve raised enough stink at my school. I dont’ think they would allow me back on campus!

      Report Post »  
    • Black Midge
      Posted on November 6, 2011 at 11:49pm

      I have raised so much stink at my school that I have been black balled and am in the process of moving
      across country to finish my degree at the only other school in the nation that offers it, PS I am fifty, been a CEO and am getting this degree because I have hired the grads and paid 6 figures for them to not to produce, whats the old saying if ya gotta get it done do it yourself.

      Report Post » Black Midge  
  • Rached Madcow SHOW
    Posted on November 6, 2011 at 10:01pm

    Don’t worry, we will pick up the tab for your re-education camps that teach that the real enemy is the conservative right. That’s why the conservative right must be punished and must pay for the retirement of union workers. The conservatives must pay for the liberals education so they have a degree. And because they have a degree, they will advance past the conservative on the corporate ladder. Liberals end up in charge, but they never lose their right to be the disadvantaged when it comes to politics. When it comes to politics, the liberals must cry that the corporations are being run by the conservatives and they don’t hire the smart liberals even though they have degrees. Koch brothers run all the corporations.

    Report Post » Rached Madcow SHOW  
  • BlackCrow
    Posted on November 6, 2011 at 10:00pm

    Fiat currency and fractional reserve banking have built a economy out of wishful thinking. It was destine to collapse and is before our eyes.

    Report Post » BlackCrow  
  • garbagecanlogic
    Posted on November 6, 2011 at 9:49pm

    How can they attend college? They don’t even understand where the cost of their tuition comes from. Do they really think the banks set the amount of the tuition and then make them come to the bank to secure a loan?

    The U.S. Out Of The U.N.
    The U.N. Out Of The U.S.

    Report Post »  
    • HorseCrazy
      Posted on November 6, 2011 at 11:59pm

      they really dont get it and the majority come out worse then before their re-education camps. WA state is building a 280 million dollar new stadium for the UW if they want to protest something how about starting there oh and maybe not excepting kids with garbage grades who plan on getting liberal arts or philosphy degrees that will never earn them any money in life.

      Report Post »  
  • Black Midge
    Posted on November 6, 2011 at 9:48pm

    Student Loan Debt is a debacle !
    How many people have student loans that did not get a degree ?
    How many people could not handle the liberal professors and quit ?
    Students have no recourse, bad professors, drunk professors, stoned professors, professors that miss half their classes,
    Vindictive professors, and just plain ole idiots, ya still have to pay for the class and it was not worth the money.
    Student recourse is one step to reconcile the loan at the end of the semester each semester, tenure will go by the way side when colleges have to produce a viable class.
    Stop giving loans state and federal, tomorrow and see how many colleges close in two years.
    People in the system get a 30% reduction now, and pay the rest, just to make things even for all.
    No one should go to college without a company backing them, and only after 5 years of work for the company should they go.
    Be up front for students on the degree choice, most don’t get viable degrees.
    The best advice I have for students don’t take out loans for more than you will earn your first year out on the job.

    Black Midge  
    • jimhill58
      Posted on November 6, 2011 at 9:55pm

      Do like I did my friend. Pay your own way through a conservative school.

      Report Post » jimhill58  
    • Mattyboy
      Posted on November 6, 2011 at 10:38pm

      I hope it crashes hard. I had such an awful experience with many of your points.

      Report Post »  
    • Black Midge
      Posted on November 6, 2011 at 11:58pm

      Jim I am paying for this out of my pocket, and am sick and tired of paying for required classes and getting ripped off and cant get my money back,

      Matt lets push this POS off the cliff together.

      Report Post » Black Midge  
  • lizziejohn317
    Posted on November 6, 2011 at 9:46pm

    There are many distance learning/online schools that are WAY cheaper and you don’t have to listen to socialist hippy, teachers that hate our country. An MBA is the same whether is comes from Harvard, Standford or Western Governors University.

    I compare the difference schools to cars; If I go to a Mercedes dealer and can’t qualify for the loan, I don’t get car. There should be a cap on loans, and grade requirements. Also, if the students don’t pay their loans, someone pays…it’s the parent or friend that was stupid enough to co-sign for them.

    “The problem with socialism is, eventually you run out of other people’s money”. Margaret Thatcher

    Just remember, the bill always comes….

    Report Post » lizziejohn317  
  • netmail
    Posted on November 6, 2011 at 9:45pm

    I graduated from high school in 1967. The expectations were about the same then as now. Get a job, go to college or join the military. I remember a full load at an accredited university was about
    $2,500 for two semesters at that time. Now it’s 20 grand or more for the same thing and no jobs waiting. Of course this is going to be a crisis, along with a hundred other things. The cost of student loans resembles the inflated prices of homes a few years back. Banks are on the hook for them just like they are going to be on the hook for student loans. So, YES, for sure, it’s going to be yet another crisis….which is just what Obama and the left want. Obama represents EVERYTHING NEGITIVE.

    Report Post »  
    • AxelPhantom
      Posted on November 6, 2011 at 10:57pm

      Get a job, go to college or join the military. How about all of the above?

      Report Post »  
  • This_Individual
    Posted on November 6, 2011 at 9:43pm

    That’s a big affirmative.

    Report Post »  
  • Al J Zira
    Posted on November 6, 2011 at 9:39pm

    Student loans should be left to the student. If there are grants that one can get that‘s fine but the availability of tax dollars from everywhere is what’s helped these colleges go nuts with their tuitions. Look at Harvard with its $67B endowment. Yep! That’s in billions. They could allow every student in their school to attend, have campus housing and a meal plan and only touch 6% of their endowment.

    Back in the day it was hard to get into college because the entry exams were tough, not everyone could afford it because not everyone qualified for grants and not everyone could afford loans. College was a privilege. Now there’s no such thing as a privilege, everyone is “entitled” to college. And where has it gotten us? A bunch of college grads without jobs who now think their entitled to a job that pays enough to cover their loans, own a house, have the ability to drink coffee at Starbucks everyday and God knows what else. Sorry, this is just a microcosm of the problems this country is going through.

    Report Post » Al J Zira  
    • loveliberty83
      Posted on November 7, 2011 at 10:18am

      you hit it on the nail-when I was young the intelligents kids went to college , they had to pass the test,yes some did not do well but that was probably due to partying I think some millioaire should build a huge trade school 7 help the kids who want to improve learn a trade 7 be proud of themselves

      Report Post »  
  • the hawk
    Posted on November 6, 2011 at 9:32pm

    Can someone please explain to me how the debt can be 750 bill $ when theres only 340 million americans ,would’nt that be over 2 billion$ per student ? I’m lost how can that number be right ?
    Thank you……………………………………..

    Report Post »  
    • beekeeper
      Posted on November 6, 2011 at 9:53pm

      Your math is way off:

      750,000,000,000 / 330,000,000 = 750,000 / 330 = $2,000/American

      Average student borrows $23,000 +/- over four years – some borrow much more (I met a kid that borrowed $160,000 to study theater management at Brown. I met him when he applied for a substitute teaching position that paid $85/day. He openly sobbed in the interview/application meeting. His payments were about to start and he couldn’t find any work.

      Shame on Brown for their tuition rate.

      Shame on him for taking out that much debt.

      Shame on US (fed Gov’t) for securing this debt.

      How will this kid ever pay that back?

      Report Post » beekeeper  
  • dean881
    Posted on November 6, 2011 at 9:31pm

    Sign is wrong. It should say “Unemployed SuperZero”!!

    Report Post » dean881  
  • dean881
    Posted on November 6, 2011 at 9:29pm

    Why is this my problem?

    Report Post » dean881  
    • beekeeper
      Posted on November 6, 2011 at 9:58pm

      You, through the federal government, secured (consigned) for these loans – the money has been paid to the colleges, but if the kids can’t pay it back, it gets added to the national debt. Until students default their loans are counted as “assets” not debts.

      Report Post » beekeeper  
  • Citizen Ima
    Posted on November 6, 2011 at 9:26pm

    issuers of federal backed student loans are forbidden to inquire as to high schools grades, test scores, intended college major, or anything else that might predict default. This is to prevent some people from getting discriminated against. Thus a smart kid headed to MIT for engineering pays the same high interest rate as a much less qualified student; yet another welfare program. Note also that Obama just bailed out a bunch of losers who even after 13 years of free education, and near free 4 years of college, still couldn’t manage to make enough money to pay off their loans in 20 years. I suggest that this program be privatized ASAP.

    Report Post »  
    • lizziejohn317
      Posted on November 6, 2011 at 9:49pm

      going to college is equal to being smarter….

      Report Post » lizziejohn317  
    • Twobyfour
      Posted on November 7, 2011 at 6:08am

      Going to college equals to general perception of being smarter. And that’s it. A perception. It is not unusual that a college grad is dumber than a box of rocks. I’ve been involved in several ventures related to education, in a support role for students beside programs’ development. That’s why a college grad degree carries no weight with me. I prefer autodidacts, because they have an established pattern of learning, it’s their second nature–and an important quality in our fast changing world.

      Report Post » Twobyfour  
  • gpk
    Posted on November 6, 2011 at 9:23pm

    Turn the loans over to the “mob.” If you don’t pay……..you sleep with the fish. Simple.

    Report Post »  
  • CatB
    Posted on November 6, 2011 at 9:22pm

    These are “professional” students who stayed and stayed in school instead of facing the real world .. and now they want to be bailed out .. TOUGH! Grow up and pay your bills .. you made your choices now it is time to GROW UP and put your big boy/girl pants on!

    Report Post »  
  • Eliasim
    Posted on November 6, 2011 at 9:22pm

    Education shouldn’t be a public responsibility. If you can’t afford to go to school too bad. The issue really is that populations don’t bear fruitful people anymore, and so they have to go to school to become fruitful.

    Report Post »  
    • Eliasim
      Posted on November 6, 2011 at 9:27pm

      That’s what Jesus meant when he said there will come a day that your womb bears no fruit. He meant everyone will be a tool.

      Report Post »  
    • Eliasim
      Posted on November 6, 2011 at 9:34pm

      And then Jesus will come from out of the East and ask, “Children I asked do you have fish for me”, and people will not hear him because the womb is barren, and he will then get a little frisky,“I am Lord coming for fish”, and people won’t hear him, and therefore the son will have his own feast prepared for him and by him.

      Report Post »  
    • Eliasim
      Posted on November 6, 2011 at 9:36pm

      People used to be more spiritually content dwelling in the high regions of their mind, but now they need it right in front of them.

      Report Post »  
    • Eliasim
      Posted on November 6, 2011 at 9:45pm

      Then Jesus comes to melt down your mountains and scorch the green grasses of your hillsides, and crush the highest peaks until they all become lower laying regions, and the bullocks will sift through the ashes chewing their cud and the unicorns will dance across the dust picking off the small number the fruitful minority. And everything starts over again.

      Report Post »  
    • Eliasim
      Posted on November 6, 2011 at 10:07pm

      This is actually an important time in history’s time-line as with other periods this time is when the Man’s are made, and you come to know the Rain. As in the same Rain spoken of in Genesis whereby God planted a garden Eastward in Eden because it had not begun to “Rain” yet.

      Report Post »  
    • Psychosis
      Posted on November 6, 2011 at 10:18pm

      could you please prewrite your comments on paper ,then post that way you can get all your thoughts out in one post instead of repeatedly responding to yourself

      unless of course you have multiple personalities , and they keep hijacking your thread lol

      Report Post » Psychosis  
    • Eliasim
      Posted on November 6, 2011 at 10:32pm

      Multiple personality disorder. That‘s an interesting concept and for many serving in a ward it’s completely unfounded, although it is a good way to confine God’s Prophets. What exactly do people think it means in the Bible when they read the Lord speaking and God says “I, even I bring a flood of waters?” It means there are two. Otherwise it would have been sufficient to write “I bring a flood of waters” or “Even I bring a flood of waters.”

      Report Post »  
    • barber2
      Posted on November 6, 2011 at 10:48pm

      ELISA: Am worried about you. Were you thrown out of some seminary? You sound like you have issues far deeper than politics. Would love to throw some clever, sarcastic comments to you but have a feeling you are more vulnerable. Hope you have someone to talk to.

      Report Post »  
    • Eliasim
      Posted on November 6, 2011 at 10:48pm

      Another example of two is when Moses as God comes to Pharaoh channeled through the Prophet in the room Aaron, Moses has Aaron tell Pharaoh that “My son, even my first born” is among the Children of Israel. Another example of two.

      Report Post »  
    • Eliasim
      Posted on November 6, 2011 at 11:00pm

      Therefore if the Lord called upon Moses to go to his brother Aaron to have Aaron be the Prophet in the room to tell Pharaoh to release his son, even his first born, then who was his first born? It was Adam! And if Adam was the Lord’s first born then which Lord was it that went to Moses, and will also inevitability be the Lord you have to face if somehow you managed to defeat Jesus? Enos!

      Report Post »  
    • Eliasim
      Posted on November 6, 2011 at 11:31pm

      Yes, and Esau was Enoch, but Enoch “My son” gave up his birth right for Pourage, and so Enoch became Edom, but I prefer Edam and became as Adam fell, and therefore there are the two sons. And their Father is Enos. And Enos may be coming for a visit.

      Report Post »  
    • Meyvn
      Posted on November 7, 2011 at 7:51am

      @Eliasim: You’re a bit on the wacky side today.

      Report Post » Meyvn  
    • barber2
      Posted on November 7, 2011 at 8:18am

      Florida: Thanks. In his case, I’m glad he is a troll. Otherwise I would fear for the public’s safety. He does a great job at portraying a raving lunatic. Always a little hard for the Far Left to stay in touch with reality. And reality with them…

      Report Post »  
  • bankerpapaw
    Posted on November 6, 2011 at 9:18pm

    My wife taught school for 34 years. She says that everybody is not cut out for college. And that
    everyone doesn’t need to go to college. The mechanic, the computer geek (Steve Jobs) among
    others. Someone with a skill can make a lot more money by not going to college. I live in Arkansas.
    We have a scholarship Lottery. 40% of the recipients of scholarship drop out.

    Report Post »  
  • misteryuck
    Posted on November 6, 2011 at 9:14pm

    Hmmmmmm….
    Ever wonder why no one goes after “BIG UNIVERSITY” for jacking up tuition year after year?
    The left just gives them a pass. No one says (in the leftist media anyway) that “BIG UNIVERSITY” is gouging the poor… They sure don’t mind going after “BIG OIL” or “BIG TOBACCO”. Seems to me “BIG UNIVERSITY” is getting too greedy.
    Why is that? Inquiring minds want to know…

    Report Post » misteryuck  
    • CatB
      Posted on November 6, 2011 at 9:20pm

      NO one forced them to go to the school they CHOOSE .. and no one forced them to sign up for the loans .. They NEED TO GROW UP AND PAY UP! I am sick and tired of being expected to pay for other people’s choices .. NO ONE IS PAYING FOR MINE AND I DON’T expect THEM TOO!

      Report Post »  
    • Loki
      Posted on November 6, 2011 at 10:24pm

      Well CABT..
      No they wasnt forced to go to colleger, well except most jobs above retail or factory work requires some form of certification. Want to become a secretary? need a degree.. want to be a simple librarian?? you need a degree.
      The only way to make your way out of the income hole that many americans now live in, is going to college. Then colleges increase the difficulty for students as they get closer to their final years, not talking how hard a class is, but how often certain classes are held, when they are held, and even where they are held.
      A graduating student is lost cash cow.
      how many non degreed students out there with enormous debts are in the condition due to running out of financial aid, and cannot afford to finish their degrees by paying out of their own pockets.

      I’m really glad CATB that you can pay for your education, is it some third rate community college? good luck getting a real job in your future.

      Report Post » Loki  
    • CatB
      Posted on November 6, 2011 at 10:58pm

      @LOKI .. from what I have seen Harvard is turning out some pretty dumb people. I worked my way up with an education and hard work .. Systems Administrator. Don’t worry .. I’ll be fine– as is my son who has worked since high school and has a college degree also .. that he and I paid for as he went .. no debt and a job.
      Why should we pay for people who spent in many cases YEAR more than their degree would require if they weren’t doing the minimum and partying.

      Report Post »  
    • LibertarianRight
      Posted on November 7, 2011 at 12:34am

      Reading Loki‘s post just reaffirmed my belief that some people shouldn’t go to college. If you cannot articulate your ideas with the most basic understanding of grammar and spelling, no one is going to listen. Sloppy words and sloppy thinking often go together.

      Plus, a college education isn’t all that necessary. Some of the richest people in the US didn’t graduate college – Bill Gates, Steve Jobs, etc. Drive to improve and succeed, while absent from many people now that they look to the government to solve their problems instead of their own initiative, is far more important than a college degree.

      Report Post »  
  • martinez012577
    Posted on November 6, 2011 at 9:11pm

    Who would have thought this could happen. Oh yeah Ron Paul called this one also.

    Report Post » martinez012577  
    • SavingtheRepublic.com
      Posted on November 6, 2011 at 9:25pm

      No he didnt plenty of people have seen it coming for years. Celente was calling I saw it coming before the mtg bus blew up. Knock it off with Paul being some kind precog on every single thing going on in the country. So tired of hearing Ron Paul this Ron Paul that yea and he has done nothing next to House floor rants and proposing bills which go nowhere. Yea some kind of great patriot alright!

      Report Post » SavingtheRepublic.com  
    • Vechorik
      Posted on November 6, 2011 at 9:25pm

      I believe him too. Ron Paul predicted the housing bubble and said the same thing would happen to education/the nation’s colleges. Soon tuition will be so high, no one can afford college anymore. Spending idiots have ruined America. Not one politician is willing to risk his position in order to do what’s right for America. Remember the budget crisis? Same thing going to happen in the budget super committee (which is unconstitutional). No one will want to cut anything at all. They are SICK in Washington and we need to give them a dose of the CONSTITUTION!

      Report Post »  
    • Bakko Bomma
      Posted on November 6, 2011 at 9:38pm

      Ron Paul 2012

      Report Post » Bakko Bomma  
    • barber2
      Posted on November 6, 2011 at 10:44pm

      Basically, anyone with any sense could have foreseen this. Live within your means. Don’t spend more than you can repay. Don’t live on credit. Stop blaming others for your dumb mistakes . ( someone needs to pass that on to the Democrats ! ) Save your pennies. DUH. It doesn’t take a prophet or a seer to figure this out. It just takes COMMON SENSE which seems to be sadly lacking in our society today.

      Report Post »  
    • Jeff65
      Posted on November 7, 2011 at 6:48am

      @barber2 Your right. Wonder why no one did? Look at old videos and you see the oposite. Common sense doesn’t seem so common.

      Report Post »  
    • Jeff65
      Posted on November 7, 2011 at 6:55am

      @barber2 You are leaving a few things out. The student loans drive up education costs. The students are brainwashed that they have to go for “higher” eduction. Parent, teachers, government all pressure student to go to college. The only way to do so is to get a loan, since costs are so high. Economy crashes and student can’t get a job. Can’t pay off loan.

      Another wonderful big government success.

      Report Post »  
  • SLEUTH
    Posted on November 6, 2011 at 9:09pm

    studen loans should be left to the states. its the student s investment. if you cant afford it, too bad. my tax money shouldnt be paying for their education when its their future that they are investing in.

    Report Post » SLEUTH  
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