I have been thinking with increasing frequency about the scam of student debt and the incredible bubble we have created in our society by pushing young adults into universities regardless of career path and without regard for the process of education. We are saddling our twenty something year old workers with thousands of dollars of debt for degrees that are worth less and less, lining the pockets of for-profit businesses and lending sharks in the process.
In the 1950’s and 60’s a college degree did seem to be some kind of guarantee in life. Only 5% of people 25 and over had a college degree in 1950. In 2013 more than 40% of people 25 and over have an associate or bachelor’s. Sixty years ago, getting a degree after high school put you in an elite category. Today, almost half of the 25 and over job force has one.
And while the exclusivity of a degree from a college or university has worn off, the cost of the degree has increased exponentially. People are further into debt for college than they are for credit cards and car payments.
As this article shows, all that debt is not paying off. People are spending more and more for education and getting less and less.
What we end up with is a system where 18 year olds are lent tens of thousands of dollars for degrees that are increasingly unlikely to get them jobs. The only reason banks will loan that much money with no collateral to these students is this: The government guarantees the loans. Students can never declare bankruptcy, they can’t avoid repaying, the government and the banks will follow these individuals for the rest of their lives taking as much money as they can until the debt and the fees and the interest have all been repaid.
Matt Taibbi summed up the tragedy and ugly corruption of this system here.
If you watched John Oliver this week, then you can agree with my conclusion: While we tackle this issue of what to do about the nasty decrease in the benefit-to-cost ratio of going to a university, we should all do our best to stop people we know from giving any money at all to for-profit-colleges.