Monday, April 26, 2010

This is what "Children of Debt" is all about

Brutus is back, after a hiatus which was spent getting older and continuing the career search.

Don't have much time to delve into any deep issues, but I found an article that you ALL should read. It shows the predicament of an entire generation that might as well have had credit cards in their baby bottles rather than formula or mother's milk.

Oh, and it does mention this:

"Even before the recession, nearly half of college students dropped out before earning a degree, the Demos report said.

Now, people from low- and moderate-income families are much less likely to enroll at all."

Those people are wising up, as are many of us Debt Children. That is definitely an encouraging sign.

Monday, April 5, 2010

Why does Higher Ed cost so much?

Why, it's the federal student loans of course. Peter Schiff, who was one of the few prominent voices warning about the Nasdaq bubble and then the housing bubble, explains the problem and the culprit.

First came the government student loans for those in "need". Many of those students may not have chosen college otherwise, as they would have had to put college off and work to save enough to pay tuition. But instead, they had federal money to throw at the education industry. They used it.

As basic economics would tell us, prices skyrocket for those not considered in "need", which includes the middle class and higher. The loans had bid up the price of education. Soon enough, the non-needy can't fathom saving such a ridiculous amount of money for college. So, why not borrow? Everybody else is doin' it!

Enter: Private student loans.

That is the stuff bubbles are made of.

Thursday, April 1, 2010

The Great College Hoax

Is this the article that tells the story of an entire generation of students?

It's an "oldy" but definitely a "goody." Kathy Kristoff's article is spot on with her analysis of the deliberate misleading and plunging of an entire generation of young people into crippling debt through college propaganda, the criminal student loan system and easy money. We wish the article were an April Fool's joke, but it definitely is not.

1. It tells a real story - a couple breaking up because they both had too much debt from undergrad and law school.

2. Former students' inability to make payments on their inflated and devalued college degree is discussed as well.

3. It details the inevitable harassing calls from Sallie Mae that follow, along with a short blurb about their criminal former CEO, who made off (Ma-doff) with $72 mill before the stock tanked.

4. The article states straight out that borrowing goo-gobs of money is often a horrible investment and can leave college graduates way behind their high school grad counterparts:

"[O]ne in four college grads takes home considerably less than the top quartile of high school grads, according to a College Board study. Even some people with doctorates earn less than people without so much as an associate degree, it shows."

5. Consumer fraud is mentioned.

6. As is the case with sub-prime lending in real estate blacks (and other minorities) are the lab rats for sub-prime student lending.

7. It also sums up prior generations' warped view of student loan debt with this tidbit:

"For many a bachelor's degree is nothing but a stepping-stone to a professional degree. Joel Kellum is one of those. After graduating from the University of Virginia, he got into California Western. Kellum approached a law professor about the wisdom of borrowing for the tuition.

"He said, 'Don't worry,'" Kellum recalls. "'We had the same thing when we were in school.'"

My guess is that the law professor did not have an undergrad major involving math. They "had the same thing"? What a joke.

But it's all in there, folks. Check it out. It's the college chapter of the Children of Debt story in a nutshell. Read it. Have your parents read it. Have your extended family read it. The education bubble is bursting, yet there are millions of high schoolers ready to waste time and future earnings to reflate it. This info has to get out to them before it's too late.

A sad story, but it won't be the whole story. There will be way too many educated and disgruntled young people in this country for change to be avoided (not the fraudulent "change" touted by the current president).

The market will win as more become privy to the Education Industrial Complex and the fact that it exists for its own benefit and not for the benefit of its students. It will take time, but college as we know it will not hold its place as the "key" to the good life once supply and demand show the reality.

In the mean time, there may be quite a few Future expats, like our Angry One. All is not lost. Think globally.