WC Varones

Don't lend your hand to raise no flag atop no ship of fools

The Great Education Scam gets widespread attention

We've been talking about the Great Education scam for a year and a half.

The theme is catching on with other bloggers and in the mainstream media. Today Instapundit's Glenn Reynolds writes an op-ed in the Washington Examiner, citing recent stories in the Washington Post and New York Times:
First -- as with the housing bubble -- cheap and readily available credit has let people borrow to finance education. They're willing to do so because of (1) consumer ignorance, as students (and, often, their parents) don't fully grasp just how harsh the impact of student loan payments will be after graduation; and (2) a belief that, whatever the cost, a college education is a necessary ticket to future prosperity.

Bubbles burst when there are no longer enough excessively optimistic and ignorant folks to fuel them. And there are signs that this is beginning to happen already.

Indeed.

On the other hand, if you can get a fixed-rate student loan, maybe you'll get lucky with a dollar collapse in a few years. That's my strategy for real estate debt, and it would apply to college debt as well. But if we're wrong and don't get a dollar collapse, college debtors are far worse off than mortgage debtors. You can walk away from a house and go bankrupt to clear other debts, but college debt is bankruptcy-proof and will be a ball and chain until your dying day.

13 comments:

Anonymous said...

Illegals are getting student loans in Arizona, California, etc and using them for living expenses before being shipped back south of the border.

Good luck collecting on that ball and chain.

W.C. Varones said...

I don't doubt it, but do you have a source on that? Are these federally guaranteed loans, or private loans from stupid banks? Do they need Social Security numbers?

I might want to pose as an illegal and take out a loan under a fake name.

Anonymous said...

My local university is on an expansion and building boom expecting the great edu scam to continue. It's just a matter of time before the whole shitn' shee bang collapses. As soon as all those kids figure it out.

B-Daddy said...

Maybe we are just totally screwed. It seems like high school doesn't really prepare kids for careers and college is vastly overpriced. What the heck? Where do we get the future geeks needed to keep the country's economy humming?

W.C. Varones said...

B-Daddy,

Kind of like the housing bubble. Everybody needs to live somewhere, but prices went nuts due to the easy-money credit bubble used to pay for houses.

The education bubble will burst when people stop taking on high-five-figure or low-six-figure debt for mediocre educations.

In the meantime, advise kids to get a scholarship, do lower division classes in community college, join the military for the GI Bill, whatever it takes to get an education without a lifetime of debt.

Anonymous said...

age 25 80g's in debt making $13 per hour It's criminal to knowingly do that to a young person. Young people are the easiest to fool if someone decides to take advantage of their enthusiasm and energy (and one has to be a major assclown to do so). For a lot of these kids going into serious, non-dischargeable debt to attend university is akin to buying a lottery ticket. Some will receive a nice pay out afterward and land lucrative jobs. Many won't.

Jeff

Anonymous said...

"In the meantime, advise kids to get a scholarship, do lower division classes in community college, join the military for the GI Bill, whatever it takes to get an education without a lifetime of debt."

I agree but to put a fine point on that statement - join the Coast Guard. I hate the idea of perpetuating the Empire/World Cop role we have in the world. In the future, if the powers that be want to fight a nearly 10 year long war they can do it the old fashioned way by showing some balls, declaring war and taking volunteers and doing a draft. If the people are behind the effort, they'll enlist. If not, they won't. If they draft for an unpopular and long war, the Congress will be out on its ass in an election cycle - as it should be. Coast Guard.

Jeff

Anonymous said...

it is criminal to mold young people who are like clay being shaped into what they will become throughout life this way cui bono, cui bono, cui bono

Anonymous said...

We've got these chains that hang around our necks,
people want to strangle us with them before we take our first breath.
Afraid of change, afraid of staying the same,
when temptation calls, we just look away.

Anonymous said...

Diploma mill?!? We don't run no stinkin' diploma mill!!!

Anonymous said...

no diploma mills here

Anonymous said...

"The Government Accountability Office announced two weeks ago that it ran an undercover operation that found deceptive or fraudulent practices at all 15 for-profit schools it visited. Democratic lawmakers say more government regulation of the sector is needed."

Shocking, huh? A nation of grifters. We need some extra strength chlorine in the pool.

Jeff

Anonymous said...

I had a thought. Maybe some of those newly minted (and unemployed) lawyers can get a job over at Holder's D.O.J. department that is taking a hard look at fraud.

http://www.stopfraud.gov/news.html

They've got some first hand experience on how scams are put together and perpetuated so that would be a plus. Poetic justice if they started investigating their alma maters, don't you think? hahahahaha!

Jeff

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