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Well, yes colleges and universities are money making machines, but people put themselves in debt for most futile reasons. A family I know helped their son to apply to several colleges, he got accepted into some, and one college offered him pretty hefty fin aid. But that was not his top choice school. So with encouragement of his parents (medium income, but lately truly struggling to make ends meet) he DECLINED that amazing offer to go to the top choice school that did't offer him a penny. Now when you ask me WHY that school was top choice - I'll answer with a big sigh, that the main reason was climate. It was in a wonderful state of lots of sun for the most part of the year... It was reasonably far from parents. He really liked beautiful campus...
A year went by (or two?), they guy changed major couple of times, and got transferred here to MA, where a mediocre school (by MA standards) gives much better education than the top one with great climate, and they pay less. Still, not as little as they would have paid if they accepted the scholarship from another school - which was a solid college as well. Not Yale or Harvard by any means of course.
My question - who can help these people? How can they be helped if they wouldn't listen to reasoning? I and some other people told them to go for the scholarship, and let the guy figure things out without putting family in greater debt. But parents said, they want him to have what he desires...
To conclude, the system "dupes" you, when you don't think beforehand.
The problem with higher education in America is that it has become a requirement for jobs that should never need it. Does the average insurance salesman or Walmart manager really need a 4-year degree? This process of educational inflation has not only damaged the inherent value of undergraduate (and a lot of graduate) degrees, it has turned millions of people whose careers could never support hundreds of thousands of dollars in loans into lifelong debtors. Worst of all, college campuses have become a virtual indoctrination camp for leftist extremism, with ultra-liberalism being taught as fact to thousands of impressionable teenagers.
Unfortunately, it'd probably be impossible to reverse these trends now. But a good starting point would be to eliminate tenured professorships and tear down the obscene pricetag associated with attending even public, in-state universities. Simply put, it shouldn't cost $100,000 to go share a room with someone in a thirty-year-old dormatory and spend a total of 20 hours a week in 100-person classes for four years. If Obama actually wanted to fix the economy, rather than cementing a new generation of impovershed Americans on the take, he'd forgive a significant portion of college loan debt, turning an entire underclass of paupers into spenders.
I think there is no point in being emotional about this. Clearly this problem is not sustainable and things will have to change, there is just no other way out of it. The conditions that were created by banks, and government, and institutions directly led to this overtime. It wasn't apparent in the beginning, but it is becoming more clear to everyone. And once more and more consumers - the students and parents wake up and start making wiser choices, the party will be over. The top places that serve the wealthiest percentage of international and domestic students will survive, other places will have to downsize, restructure, adjust or dissapear. More vocational programs will be offered at community colleges and high schools, more kids will start their own businesses or help in a family business.
It will be a change for the better for everyone, and will become just a period in history that people will shake their heads about looking back.
Like what some mentioned on here, the main problem with all of this is that the big colleges and universities (private or public) have become these huge profit making machines as they kept growing and buying properties around their cities and towns for peanuts in order to grow...Some even get tax incentives or no obligations to tax where the cities have hit hard times where they could not pay bills, meanwhile, these colleges endowments grow into the billions of dollars...
Brown University is the perfect example of this where after some talks and battles where Brown did not want to be fiscally responsible in helping their city from going into bankruptcy despite the fact that that city has let them take properties for peanuts and pay no taxes at all...Even students stepped in against Brown! Brown finally agreed to pay $31 million over the next 11 years. Peanuts over what they would pay if they were treated like a regular property owner or income generator. Just on the buildings they own in Providence alone, the value of the possible yearly tax value on the properties would be around $38 million.
They have gotten so greedy that they are now competing with each other to a point that even in sports, many of the universities have strategically moved to different conferences in order to collect more money in their big basketball and football programs...Keep in mind, there is a reason these institutions will do whatever it takes to get that next star as they can make the school tons of money, despite that students horrible gpa or scores or even in some cases, criminal history. it's ugly and disgusting to me as I grew up watching Big East Basketball and watching rivalries that have played for years are slowly getting dismantled because of opportunities to make more money...
I think more and more kids, especially parents, are starting to realize that college is not the great investment that it once was...As this happens, more and more young Americans will become proficient in other trades instead like farming, welding, building or auto trades, and even unique businesses they instead start on their own as entrepreneurs...There is plenty of opportunity to become an entrepreneur in America right now, especially in our smaller forgotten cities where it is still affordable to live and don't require a car to get around as much...
And they will acquire those skills in a high school, like Essex Agricultural and Technical in Danvers with 22 career programs for 1,400 students from a 20 miles radius. And other high schools will move away from offering just a broad preparation for college to more focused programs were kids can get a taste for different careers and acquire skills.
Let me ask you this. When you borrow money and sign a loan, who is responsible to pay that loan back?
Excellent point.. But it does not work that way for the big corporations and the Wall St guys... Does it?
So what this kind of proves is, It is OK to borrow money BUT borrow at the scale where if you go down, you take quite a few with you... If you are not a BIG FISH, you will be swallowed..
Excellent point.. But it does not work that way for the big corporations and the Wall St guys... Does it?
So what this kind of proves is, It is OK to borrow money BUT borrow at the scale where if you go down, you take quite a few with you... If you are not a BIG FISH, you will be swallowed..
On principal it isn't right in either case. In practice, letting the entire financial system choke on it's own vomit isn't a very appealing outcome due to its reach. Holding individuals responsible for their choices is an easier pill to swallow.
Yes, if you are an individual and sign a note, you are responsible for that note. The part of the equation that people leave out when emotion comes into play is the message being sent to all the people who have played by the rules and sacrificed to do so. What do they get? Where's their handout? Whose paying off my mortgage? Just my wife and I and that is the way it is supposed to be.
I think everyone in this thread can agree undergraduate education in general is overpriced. There are still plenty of value options out there to be had. Better choices are needed as well.
Last edited by Logs and Dogs; 02-14-2013 at 11:47 AM..
The one difference between a mortgage and a student debt is the difference between mature adult and basically a kid. When they are not fortunate to get good advice from others, they are willing to sign anything assuming they will be able to repay it with future income.
The banks know it and love it, because all they want is profit, even if means taking the whole economy down in the end.
Well put Konfetka. There was actually a research on this topic recently and it was discovered that 30-40% of new students (kids) take private loans on school financial dept. nudges and urging, although same individuals would be eligible for federal loans. They are not even informed that they are eligible! Those same individuals who take stupid loan probably had no one to guide them and to be fighting in their corner. They are such an easy and vulnerable target for school loan sharks. I would think that any college would have best interest of their students on their mind, but that is very outdated idea, obviously. Rat race, and doggy eat dog is what we embrace as reasonable approach to living as our culture is slipping into Middle Age in the midst of 21 century. Money is not everything!
Well put Konfetka. There was actually a research on this topic recently and it was discovered that 30-40% of new students (kids) take private loans on school financial dept. nudges and urging, although same individuals would be eligible for federal loans. They are not even informed that they are eligible! Those same individuals who take stupid loan probably had no one to guide them and to be fighting in their corner. They are such an easy and vulnerable target for school loan sharks. I would think that any college would have best interest of their students on their mind, but that is very outdated idea, obviously. Rat race, and doggy eat dog is what we embrace as reasonable approach to living as our culture is slipping into Middle Age in the midst of 21 century. Money is not everything!
Good stuff. Interesting issue. So, when you combine the crazy overpriced education with the fact that there are no standard discolsures around financial aid planning it may appear as we have a good % of the root cause here.
When you sign a mortgage you have a zillion disclosures about what you are signing etc.
I'm not going to pretend I know all the "rules/laws" around financial aid planning and student loan disclosures but perhaps some standardization around this is something that should be pursued. Including walking through some standardized worksheet etc. to determine if the student is eligible for more favorable loan terms etc. through federal programs. Does anything like that exist?
That being said, you sign it and it is yours. When I was young and dumber I made my own credit mistake, was held accountable and learned a valuable life lesson. The major difference being I wasn't touched enough to make a six figure mistake....
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