Why is there over a trillion dollars in student debt?

money

How is it possible that college tuition can go up each and every year at a time when we have almost no inflation, and a GDP growth of less than 2% depending on whose economic numbers you are led to believe? The reality is that college tuition is going up because the government is guaranteeing student loans and building that bubble. Because there are so many people who have been led to believe that going to college is the way to a successful future and career they will spend almost anything to go to college. It's amazing how much people will spend when they are using someone else's money.
What is really unfortunate is that we don't teach economics in college to the degree we should, and we hardly teach it in high school at all. Most kids who graduate from high school can read and write, they can also do basic math, but very few of them can legitimately balance a checkbook or do accrual-based accounting. That's a real problem. What's worse is when those kids grow up and go work for the government. Apparently, our graduating college students are not alone when it comes to balancing the books. Our own federal government is spending over a trillion dollars per year over what it takes then in taxes. I really hate to mention this because I don't even like this buzzword, but that is simply; unsustainable!
If kids are coming with money in hand by the way of student loan to sign up for college, then that means the demand will remain very high. Because the demand is high the colleges can charge more money, and so they do. They are also paying far too much to the professors, and giving them incredible pensions and benefits, yes, including healthcare, and the accumulation of all the legacy costs are putting our colleges and universities on same track and pace as many of the municipalities and state governments which are in near bankruptcy.
What's happened is we have blown up a huge bubble in the academic industrial complex. Rather than coming clean with the challenges and problems which lie ahead we aren't being honest with the economic realities of this. The Obama Administration wishes to raise taxes, and continue to float this bizarre and unsustainable way forward. If kids graduating from college right now are not finding jobs, then sending more kids to college and raising tuition sure seems like a bad idea for anyone that stops to think about it.
Apparently no one is, while default rates zoomed past 9% in 2012 on their way to god only knows where, or how high. And so, the trillion dollar student loan dilemma is going to present a pop of epic proportions not too dissimilar from the housing crisis of 2008, luckily it will only be in one sector, albeit a very important one - education that is.
It is amazing that the Obama Administration will not address this, or do anything about it. It's not working, and the problem is getting bigger not smaller. Indeed I hope you will please consider all this and think on it.
Lance Winslow has launched a new provocative series of eBooks on the Future of Education. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net
By Lance Winslow
How is it possible that college tuition can go up each and every year at a time when we have almost no inflation, and a GDP growth of less than 2% depending on whose economic numbers you are led to believe? The reality is that college tuition is going up because the government is guaranteeing student loans and building that bubble. Because there are so many people who have been led to believe that going to college is the way to a successful future and career they will spend almost anything to go to college. It's amazing how much people will spend when they are using someone else's money.

What is really unfortunate is that we don't teach economics in college to the degree we should, and we hardly teach it in high school at all. Most kids who graduate from high school can read and write, they can also do basic math, but very few of them can legitimately balance a checkbook or do accrual-based accounting. That's a real problem. What's worse is when those kids grow up and go work for the government. Apparently, our graduating college students are not alone when it comes to balancing the books. Our own federal government is spending over a trillion dollars per year over what it takes then in taxes. I really hate to mention this because I don't even like this buzzword, but that is simply; unsustainable!

If kids are coming with money in hand by the way of student loan to sign up for college, then that means the demand will remain very high. Because the demand is high the colleges can charge more money, and so they do. They are also paying far too much to the professors, and giving them incredible pensions and benefits, yes, including healthcare, and the accumulation of all the legacy costs are putting our colleges and universities on same track and pace as many of the municipalities and state governments which are in near bankruptcy.

What's happened is we have blown up a huge bubble in the academic industrial complex. Rather than coming clean with the challenges and problems which lie ahead we aren't being honest with the economic realities of this. The Obama Administration wishes to raise taxes, and continue to float this bizarre and unsustainable way forward. If kids graduating from college right now are not finding jobs, then sending more kids to college and raising tuition sure seems like a bad idea for anyone that stops to think about it.

Apparently no one is, while default rates zoomed past 9% in 2012 on their way to god only knows where, or how high. And so, the trillion dollar student loan dilemma is going to present a pop of epic proportions not too dissimilar from the housing crisis of 2008, luckily it will only be in one sector, albeit a very important one - education that is.

It is amazing that the Obama Administration will not address this, or do anything about it. It's not working, and the problem is getting bigger not smaller. Indeed I hope you will please consider all this and think on it.

Lance Winslow has launched a new provocative series of eBooks on the Future of Education. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net

By Lance Winslow

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