As you read this, there are over 18 million students enrolled at the nearly 5,000 colleges and universities currently in operation across the United States. Many of these institutions of higher learning are now charging $20,000, $30,000 or even $40,000 a year for tuition and fees. That does not even count living expenses.
Today it is 400% more expensive to go to college in the United States than it was just 30 years ago.
Most of these 18 million students have been told over and over that a "higher education" is the key to getting a good job and living the American Dream. They have been told not to worry about how much it costs and that there is plenty of financial aid (mostly made up of loans) available.
Now our economy is facing the biggest student loan debt bubble in the history of the world, and when our new college graduates enter the "real world" they are finding out that the good jobs they were promised are very few and far between. As millions of Americans wake up and start realizing that the tens of thousands of dollars that they have poured into their college educations was mostly a waste, will the great college education scam finally be exposed?
For now, the system continues to push the notion that a college education is the key to a good future and that there is plenty of "financial aid" out there for everyone that wants to go to college.
Recently, U.S. Secretary of Education Arne Duncan visited students at T.C. Williams High School in Alexandria, Virginia and encouraged them to load up on college loans....
"Please apply for our financial aid. We want to give you money. There’s lots of money out there for you."
So where will Arne Duncan be when those students find themselves locked into decades of absolutely suffocating student loan debt repayments?
What young high school students are never told is that not even bankruptcy can get you out of student loan debt. It will stay with you forever until you finally pay it off.
Today each new crop of optimistic college graduates quickly discovers that there are simply not nearly enough jobs for all of them. Thousands upon thousands of them end up waiting tables or stocking the shelves at retail stores. Many of them end up deeply bitter as they find themselves barely able to survive and yet saddled with tens of thousands of dollars in student loan debt that nobody ever warned them about.
Sadly, the quality of the education that most of these college students is receiving is a complete and total joke.
Take it from someone that has graduated from a couple of very highly respected institutions. I have anundergraduate degree, a law degree and another degree on top of that, so I know what I am talking about. Higher education in America has become so dumbed-down that the family dog could literally pass most college courses.
It is an absolute joke. The vast majority of college students in America spend two to four hours a day in the classroom and maybe an hour or two outside the classroom studying. The remainder of the time these "students" are out drinking beer, partying, chasing after sex partners, going to sporting events, playing video games, hanging out with friends, chatting on Facebook or getting into trouble. When they say that college is the most fun that most people will ever have in their lives they mean it. It is basically one huge party.
Of the little "education" that actually does go on, so much of it is so dedicated to pushing various social engineering agendas that it makes the whole process virtually worthless. Most parents would be absolutely shocked if they could actually see the kind of "indoctrination" that goes on inside U.S.college classrooms today.
A college education can be worth it for those in very highly technical or very highly scientific fields, or for those wanting to enter one of the very few fields that is still very financially lucrative, but for nearly everyone else it is just one big money-making scam.
Oh, but you parents please keep breaking your backs to put money into the college funds of your children so that they can be spoon-fed establishment propaganda all day and party like wild animals all night for four years.
It really is a huge scam. I was there. I saw it with my own eyes.
But if you will not believe me, perhaps you will believe some cold, hard statistics. The following are 16 shocking facts about the student loan debt bubble and the great college education scam....
- Americans now owe more than $875 billion on student loans, which is more than the total amount that Americans owe on their credit cards.
- Since 1982, the cost of medical care in the United States has gone up over 200%, which is horrific, but that is nothing compared to the cost of college tuition which has gone up by more than 400%.
- The typical U.S. college student spends less than 30 hours a week on academics.
- The unemployment rate for college graduates under the age of 25 is over 9 percent.
- There are about two million recent college graduates that are currently unemployed.
- Approximately two-thirds of all college students graduate with student loans.
- In the United States today, 317,000 waiters and waitresses have college degrees.
- The Project on Student Debt estimates that 206,000 Americans graduated from college with more than $40,000 in student loan debt during 2008.
- In the United States today, 24.5 percent of all retail salespersons have a college degree.
- Total student loan debt in the United States is now increasing at a rate of approximately $2,853.88 per second.
- There are 365,000 cashiers in the United States today that have college degrees.
- Starting salaries for college graduates across the United States are down in 2010.
- In 1992, there were 5.1 million "underemployed" college graduates in the United States. In 2008, there were 17 million "underemployed" college graduates in the United States.
- In the United States today, over 18,000 parking lot attendants have college degrees.
- Federal statistics reveal that only 36 percent of the full-time students who began college in 2001received a bachelor's degree within four years.
- According to a recent survey by Twentysomething Inc., a staggering 85 percent of college seniors planned to move back home after graduation last May.
COMMENTARY: The U.S. has had so many economic calamities or "Bubbles" from the DotCom-to-Sub-Prime Loan-to-Real Estate-to-Financial Meltdown, that it is becoming difficult for me to keep track of all of them. And God only knows, I have tracked most of these Bubbles right here in my Blog. This is the first time that I heard of a Student Loan Debt Bubble, so being ever the inquisitive type, I set about to find out if there is anything to this story. Here's what I found out.
According to the Department of Education, Federal Student Aid, based on an analysis of the FY2011 budget, in FY2009 there were a total of $605.6 billion in federal education loans outstanding, comprised of $149.4 billion in the Direct Loan program and $456.2 billion in the Federal Family Education Loan Program (FFELP). The projected totals for FY2010 are $672.0 billion and for FY2011 are $745.5 billion.
A total of more than $1.17 trillion in federal education loans (including consolidation loans) have been made since the beginning of the loan programs. This includes more than $878 billion in FFELP loans from 1965 to 2009 and more than $292 billion in Direct Loan program loans from 1994 to 2009. Thus more than half of all federal education loans ever made in the FFELP and Direct Loan programs are still outstanding.
The total defaulted loans outstanding are around $40 billion to $45 billion, when accrued but unpaid interest and late fees are included in addition to loan principal. Cumulative defaulted loans outstanding in the FFELP program as reported in the budget are $22.4 billion. It is not possible to calculate cumulative defaulted loans outstanding in the Direct Loan program, but the US Department of Education's FY2009 Annual Report indicates that of the $156.8 billion outstanding in the Direct Loan program as of September 30, 2009, $11.5 billion of loan principal was in default.
These figures, however, are not entirely consistent with the monthly statistics and collections reports, which show $23.6 billion in defaulted loans in the FFELP and $23.8 billion in defaulted loans in the Direct loan program, for an overall total of $47.4 billion. (The Direct Loan program has a higher default volume because more than a fifth of FFELP collection activity is through consolidation of defaulted loans into the Direct Loan program.) The total defaulted loan inventory represents about 8.2% of federal loans outstanding and 4.2% of all federal loans ever made.
The estimated total private student loans outstanding as of June 30, 2009 are approximately $157.8 billion, based on an analytical model developed by Mark Kantrowitz.
Thus the overall total education loans outstanding, federal and private, was about $763.4 billion in 2009. The similar figure for June 2010 was about $833 billion.
As you can clearly see, based on the federal governments data on estimated student loans in default, the data gives the appearances that we are far from a Student Loan Debt Bubble, but appearances can be very misleading. It certainly makes you wonder how these young students, are going to payoff their loans after they graduate.
According to the FinAid's Student Loan Debt Clock, college students owe an estimated $876 billion. If you divide this figure by 18 million college students, this averages $48,667 in debt per college student!!
Now I hope that you can see the extent of the problem. That sucks, doesn't it.
Jobs are difficult, if not impossible to obtain, and most college-age students are working several part-time jobs, mostly at minimum wage, to eek out a meager living.
Some college grads volunteer for unpaid internships (a.k.a. exploitation of college students) in private industry, but even these opportunities are highly competitive, most are offered only during the summer break, and very few grads ever end up with a full-time job for their efforts.
Many college students share apartments, and according to a survey of college students by market research firm Twentysomething Inc, a startling 85% of students had plans to move back with mom and dad upon graduation.
Under the Federal Student Loan program, some college students may be eligible to have their student loans cancelled, defered or even forgiven.
The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Considering how many teachers have been laid-off, good luck with that program.
However, these loan forgiveness programs are mostly a joke, since very few individuals will ever hope to qualify for them.
Courtesy of an article dated December 20, 2010 appearing in Before It's News, an article dated June 6, 2010 appearing in The Washington Examiner, and article dated June 7, 2010 appearing in Carpe Dem, Professor Mark J. Perry's Blog for Economics and Finance and FinAid's Student Loan Debt Clock
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