College Debt Crisis
“…the most profitable in the country”
I’ve written extensively about the high-cost of a 4-year college and whether high school educators are doing a DISservice to students in pushing them to a 4-year college– at any cost.
It’s NOT like it was in the old days when students could go to school and work a job to pay tuition. Tuition escalation is just too great to overcome. With the high rate of college graduate unemployment, and even higher UNDER-employment rates, an “educated” and rational person really has to wonder if the cost is worth the return and investigate other options.
Today’s USA Today article: Government projects to make $50B in student loan profit, highlights one of the problems as the United States government stands to PROFIT MORE than ExxonMobil, Apple, J.P. Morgan, or Fannie Mae.
According to the Congressional Budget Office’s latest projections, the federal government projects a record $50-billion profit on student loans this year. ExxonMobil made $44.9 billion in 2012, according to published reports, making it the most profitable company in the country. And if Congress doesn’t stop rates on some loans from doubling on July 1, that profit will rise more, up to an additional $21 billion, a recent report found. However, there are those who claim the projections don’t accurately reflect risk taken by the government and the profits are much smaller.
College Debt vs Student Loan Profits
IF a college-educated populace is a good thing for our society, nation, and humankind in general, why are the barriers so great?
The record-high profits on student loans come during a time of historically low interest rates on home mortgages and car loans. While a home buyer can get a 30-year mortgage at about 4.5% interest, the federal government is charging as much as 6.8% interest on unsubsidized student loans and is less than a month away from automatically doubling the interest rate on the loans headed to poor students unless Congress takes action.
“Because the government has almost ensured anyone who applies will get the loan they need, schools have been able to drive prices up with no concern as to where funding will come from,” Whaley said. “With prices skyrocketing, students are taking on way more debt than they can handle but have no other option to compete in the modern economy.”
Read the rest of the article here and please provide your views on college and how to battle rising costs in the comment section.
My other blog posts on College Debt.
- College Grads: The New Debt Slaves
http://kevincorbett.com/2013/02/college-grads-the-new-debt-slaves/ - Student Loan Debt by the Numbers
http://kevincorbett.com/2013/05/student-loan-debt-by-the-numbers/ - Colleges Suing Their Own Students For Repayment
http://kevincorbett.com/2013/02/colleges-suing-their-own-students-for-repayment/ - Department of Education SWAT Team
http://kevincorbett.com/2013/03/department-of-education-swat-team/
