The College Loan Bubble

I know this has been brought up several times before, but the latest figures point to the actual skool bubble, getting bigger and closer to popping. As of 1 Jan, 42% of student loans are in default, worth $256 billion. Thats more than the housing bubble. The problem perfectly mirrors the housing crisis in that Uncle Sam allowed loans to whomever could write their name to buy a house through freddie and fannie. We all know how that worked, prices were inflated as loans were cheap, then people quit paying , and POP. The same is going on now. People are not even trying to pay their loans back as they cant find employment that is commensurate with the amount of debt. Many of these borrowers never pay a penny back, assuming Uncle Sam will write it off. Wrong! What is going to happen is that an entire generation will be in economic slavery as their debt will ruin their credit, meaning they cant get loans, jobs, security clearances....the economic result of that has the potential to tank the economy even more than the housing bubble.

www.wsj.com...

If you follow the pattern of past bubbles, there has been a ramp effect of debt accumulation just before the burst. In this case, student debt has increased 50% in just 5 years. Student debt is 10% of total debt owed, and growing. The problem being that colleges accept anyone into any degree program regardless of the income potential of said degree compared to the cost of said degree.

Oh, and total student debt is only.....$1.3 trillion
marketrealist.com...

There is not much one can do....what I am interested to see is what the Fed does. They are still dealing with the housing bubble!

a reply to: lakenheath24

Graduating High Schoolers are looking at Colleges. Graduating College Seniors are looking for jobs. Many college grads from 2-5 years ago are STILL looking for work. And jobs are shrinking, but more grads are still coming up and out.

The jr. high schoolers are told to get good grades in high school to get into a good college...to get a good job. That pattern is not stopping. Neither is the shrinking job market...

One recent college grad said "I owe $40,000 in student loans and its been a year and a half and I cant find work in my field! Why didnt they TELL us before we spent all this $$ for no jobs! What do I do?"

Another thing to point out? Its the General Business Degree. Or a major in History. How many jobs are out there for someone just graduating with a degree in something like "Art History"???

I KNOW they can teach...but many never wanted to do that...and these things dont seem to be explained to prepare the student for the future where their majors are of no use as the jobs may be less or completely gone in their chosen fields?

And they STILL owe the student loans...and are living in Mom and dad's basement while they look.....

I was one of these....but got a much better job OUT of my field of studies...but got it BECAUSE I was noticed...and I paid off my student loans...

The problem is that the supposed "prestigious" schools are too expensive. And many employers, all they care about is where did you graduate from.

Many smart students are figuring out that. And what they do is go to a cheap community college. Do everything there. And at the last semester switch to the school they want the diploma from. So they graduate with "prestigious school name" on their diploma.

Good for you! Many don't seem to share your mindset. I cant find stats, but i bet that the vast majority of these loans have been pushed on to the same fiscally inappropriate people that got housing loans. As I said, this is economic slavery.

I think this data really shows the undelying, unstated seriousness of how bad the economy really is. It is almost like when I was in the Air Force and trying to move up. A lot of that depended on how many slots were available ahead. If nobody moves on...then there was fewer slots to fill.

To many kids are getting useless degrees.
To many colleges give useless degrees.

When the goverment made getting school loans easy, the colleges raised their prices and created stupid courses. This system was created to fail.

I always had good grades in school and they pushed me to go to college. I didn't go to college. I couldn't be happier. Instead of paying loads of debt for useless education, I got a job in a body shop where I make a comfortable amount of money doing something I like that DOESN'T require a degree, learned a trade that I've excelled in, gotten raises, helped start a side business, and instead used my money to buy a car and build a house, which I almost have both payed off. You know, useful things, not just a piece of paper. A piece of paper that high-schools will tell you is your golden ticket to fortune. "You want a good paying job? Go to college." That's the line they'd always push. The trouble is, there's good paying jobs out there that don't require college. That's what they don't tell you.

My girlfriend did go to college, couldn't get a job in the field she went to college for, and now she works retail, and pays almost everything she makes toward her student loans, about $100,000 worth. I only owe about $6000 for the car and house loans now, and I'm 26. Tomorrow, for the side-business I co-own, we're going to look at 4 rusty old trolleys that need restoring for a fancy golf club/resort, and could easily turn out to be a $20,000 contract. No college required. Just hard work and the willingness to get your hands dirty.

a reply to: lakenheath24

When manufacturing leaves a city you loose:
engineers,
managers,
skilled trades,
hourly line workers,
human resources,
truck drivers,
cleaning crews,
sales staff,
various office support,
Not to mention the $ that leaves the city because the jobs are sent to cheap labor hubs around the world. This is a major reason college grads are in rough shape. Globalization is bad for average Americans, but big corporations see short term record profits until the golden goose is finally dead.

a reply to: seasonal

Oh, come now. As far as the globalists are concerned, this is spreading the wealth. The manufacturing jobs are simply taking wealth to other countries full of the disadvantaged and giving them means that have been denied them for too long, and when they get too wealthy ... why those jobs will be redistributed to other poor folk to make it all "fair."

I'm sure that eventually things will come full circle and those poor third world Americans will be happy to work 16 hour days, 6 to 7 days a week for maybe a few dollars an hour. And it will be fair and we can rebuild our middle class then.

This problem isn't going away any time soon. I was considering going back to school because my original degree hasn't gotten me anywhere. I decided to be smart about it this time around and check in advance what jobs were available for the degrees I was considering. I got discouraged right away because what I saw was this: tons of job listings for teachers, professors, assistant professors. Among those, a few lab positions. So teaching positions outnumbered other jobs by about 4:1. That tells you right there it's unsustainable, it's basically a pyramid scheme, when you consider how many people graduate with a degree, in say, botany, and how many professors are required to teach all these students. Then I looked at the income of the jobs offered. They were lab positions paying $9 an hour!!! So if I want to find a job that pays enough to pay off the loans, I have to get a masters or phD in a field. Oh, wait, the extra school tacks on another $50,000 to the loans. I should have bought a house instead, housing bubble or no. At least when you buy a house you save money on rent. I could pay off my student loans easily if I didn't have to pay rent.

That's OK, I still make good money at the job my parents taught me when I was 18. I make more money waitressing and bartending than I have ever made at any other job (though you can also make good money in sales if you have the right commission structure). You don't need a degree for that.

Also, why does everybody frown upon the skilled trades? Construction is good money. Electricians make good money, AND you have to be smart to be an electrician or you die. Fixing cars is not easy, that's a lot of problem solving skills. Nobody ever factors in the amount of money you save when you work a trade, either. Electricians never have to hire an electrician to work on their own house, and when you work the trades you have a lot of friends from work that can also help you fix your stuff. I love the tradesmen in my family, without them I would probably be stuck on the side of the road somewhere right now.

a reply to: lakenheath24

I was made fun of and condescended to for choosing a community college, a 2 year degree, and paying cash as I went along while working.

The people who condescended to me thought I should have taken out loans, gone to a better school, and gotten "at least" a Bachelor's. They also thought I should take out loans, and not work while going to school, living with no income and relying on my loans to pay living expenses. That's what they did. Nearly everyone in my circle has a Bachelor's, Master's, or Doctorate.

They were all wrong. My husband and I are at the top of our peer group.

The one set of friends we have that is nearly as successful as us, made very similar choices.

The wife watched a commercial on TV and followed it exactly. It was one of those commercials you used to see all the time during day time TV, but are rarely shown now (or else I watch less TV) which list all the great careers you can create for yourself by going to night school. Stuff like doing nails or being a court reporter. These commercials usually list 20 or 30 things you can get training for, fast.

She choose court reporting. It was about a year, and she worked the entire time. They put all their money towards paying for it, and she was employed before even finishing, contingent on finishing.

Then he went to a 2 year school to become a dental hygienist.

Luckily, more people are seeing the light and either going straight for a vocation like Aldakoopa posted above, or doing a one or two year education. The local high school is bringing back vocational/technical to prepare kids while they are in high school. I went and saw what the schools here are doing, and it all makes sense.

College is like a scam now, and it's unfortunate that about 90% of my friends and family fell into that group.

a reply to: Ameilia

Agreed 100%.

Unfortunately, a lot of folks are not on board or aware of the community college option + finishing up at a major university.

Bottom line is universities are just too expensive today and youngsters coming out of college (1) can't find a steady job nor (2) are able to pay back the exorbitant loan amount from their 4-5 years from a major institution.

The smart option is to go directly to a local community college, ensure your credits are fully transferable, then transfer to a well known 4 year institution and finish up there. The savings are huge ($20K - $50k, on average) and the payback is minimal and manageable once the person graduates from the 4 year institution.

My kid is doing that exactly right now. He is majoring in Electrical Engineering; just transferred from a local college into a major institution and is doing great with his grades. Savings are more than $30,000 over the past two years.

This is the smart and only way to go, folks.

I was so angry think it was 2 years ago when the president got on TV and spent 30 mins talking about how you must go to college to have any chance at a good life.

Some kids are not wired to handle college right after high school, encourage them to learn a trade so they can get settled in life before going to school so they are ready for it.

We need more people in the trade skills... just everybody seems to be pushing colleges..pisses me off.

a reply to: Irishhaf

I am so glad I joined the AF. Skool would have been wasted on me. As it were I had a good career and learned some skills. At least in NW Florida, high skools are teaming up with embry-riddle and microsoft to earn college credits and or certifications. I agree with the earlier poster, its becoming a pyramid scheme.
I was watching wolf of walstreet and it's almost like when the guys went to florida and seen the imminent carnage first hand...I think it's to that point. We will see.

This is a very informative and important thread. I have a 2 year degree (been unemployed for the last 3 years, not sucking off the system) and my husband is a truck driver with a G.E.D.

Our son who has been an honor student since elementary school (he's a Freshmen in High School) and also National Jr. Honor Society member has set up his idea to attend a College after High School, but is working on starting his College education in High School. Our High school runs a program with the local community college to earn discounted college credits while still in 11th and 12th grades. Then, he can have some of the basic credits already under his belt to attend the local community college or other college. He's interested in an Engineering degree.

At 14, I had no clue what I wanted to do in the future (as most people) and my husband was too busy skipping school and partying.

My husband, as a truck driver makes really good money, is home every night and is a great role model for our son. Our son has grown up knowing that a College Degree doesn't guarantee anything in our world.

A_L

originally posted by: lakenheath24
I know this has been brought up several times before, but the latest figures point to the actual skool bubble, getting bigger and closer to popping. As of 1 Jan, 42% of student loans are in default, worth $256 billion.

There's going to be a major debt restructuring at some point within the next 8 years. I'm 100% convinced of this.

originally posted by: mysterioustranger
Another thing to point out? Its the General Business Degree. Or a major in History. How many jobs are out there for someone just graduating with a degree in something like "Art History"???

Business is one of the most useless and most overproduced degrees in the US. Unfortunately, it's one of those degrees that's really only good if you go all the way up to the MBA level and most people don't do that. The other useless degrees have actually been on a decline. Art History as you point out, isn't worth much but if you do something like Fine Arts, or Digital Art, or Studio Art the field is actually quite lucrative.

originally posted by: grey580
Many smart students are figuring out that. And what they do is go to a cheap community college. Do everything there. And at the last semester switch to the school they want the diploma from. So they graduate with "prestigious school name" on their diploma.

Schools typically require 30 credits from them in order to get the degree, so you're usually looking at 1 year of the prestigious school. Problem is, transferring can be a mess, especially if you have to go out of state. It's not worth it in my opinion. I suppose in some fields the school name is important, but in others it's not. It's also only a matter of time before people figure out the prestigious schools are really just degree mills. You can tell a lot about a college by how many people fail to graduate. If everyone graduates, it means no one is failing when a bell curve will have 50% of students failing in most cases.

originally posted by: Aldakoopa
I always had good grades in school and they pushed me to go to college. I didn't go to college. I couldn't be happier. Instead of paying loads of debt for useless education, I got a job in a body shop where I make a comfortable amount of money doing something I like that DOESN'T require a degree, learned a trade that I've excelled in, gotten raises, helped start a side business, and instead used my money to buy a car and build a house, which I almost have both payed off.

It all depends on what you want to do in life. If you want to be a doctor, lawyer, engineer, mathematician, scientist, and so on you need to go to college. Doing auto body work is perfectly fine, if that's what you want to do. I write a lot about my career field on these boards, and I do that because I find it to be a fascinating sector. Just a couple weeks ago I got paid to play with some new technology called an HTC Vive which is basically a high quality virtual reality system. From there, I got to build a photo realistic simulation with it to use a companies product in VR for training purposes (taking it apart, putting it together, using it, etc). Essentially, I got to build a holodeck.

While it would be possible to teach myself all the skills for what I did on my own, I learned them faster in school, I got a degree to back my skills (or atleast I will... still working on it), and I learned the right way to do things. Some of the required concepts like Linear Algebra and Calculus are much easier to learn in school too. I'm working on something similar right now for a related project for internship applications, where I take photos of the moons surface and lay them out... essentially using VR to bring to everyone the ability to walk on the moon.

Over the summer I built an AI that's using some advanced mathematical concepts to solve a very computationally complex game in less time than traditional approaches have done so.

That type of stuff is cool to me and it required going to college.

originally posted by: anotheramethyst
Also, why does everybody frown upon the skilled trades? Construction is good money. Electricians make good money, AND you have to be smart to be an electrician or you die.

I don't frown on them, but I don't think they offer realistic salaries. The median wage in the US is $53k/year, and the median age is 40. So basically, to me that means that by the time you're 10 years into a career you should be above the median wage. If your job doesn't offer this, you're in a bad field. To take an example like plumbers (a very under rated trade, because without them we would be in deep #) with 10 years experience the average if $45k and the very highest top out around $73k on average (might do a bit better in a high col area). That's just not a good wage. Contrast that with a good college education where you can expect a minimum of $80k/year right out of school.

originally posted by: Jaellma
Unfortunately, a lot of folks are not on board or aware of the community college option + finishing up at a major university.

I tried going this route initially. I have a bachelors and 3 associates, working on my second bachelors now. Almost nothing from the community colleges I attended transferred, or if they did they simply didn't transfer as a high enough class. Unless the program is specifically designed as a feeder program you shouldn't expect anything other than gen ed's to transfer. In my current program for example, there's 52 classes required to graduate, what actually transferred from my community college credits were only 4 classes.

originally posted by: Aazadan

originally posted by: Aldakoopa
I always had good grades in school and they pushed me to go to college. I didn't go to college. I couldn't be happier. Instead of paying loads of debt for useless education, I got a job in a body shop where I make a comfortable amount of money doing something I like that DOESN'T require a degree, learned a trade that I've excelled in, gotten raises, helped start a side business, and instead used my money to buy a car and build a house, which I almost have both payed off.

It all depends on what you want to do in life. If you want to be a doctor, lawyer, engineer, mathematician, scientist, and so on you need to go to college. Doing auto body work is perfectly fine, if that's what you want to do. I write a lot about my career field on these boards, and I do that because I find it to be a fascinating sector. Just a couple weeks ago I got paid to play with some new technology called an HTC Vive which is basically a high quality virtual reality system. From there, I got to build a photo realistic simulation with it to use a companies product in VR for training purposes (taking it apart, putting it together, using it, etc). Essentially, I got to build a holodeck.

While it would be possible to teach myself all the skills for what I did on my own, I learned them faster in school, I got a degree to back my skills (or atleast I will... still working on it), and I learned the right way to do things. Some of the required concepts like Linear Algebra and Calculus are much easier to learn in school too. I'm working on something similar right now for a related project for internship applications, where I take photos of the moons surface and lay them out... essentially using VR to bring to everyone the ability to walk on the moon.

Over the summer I built an AI that's using some advanced mathematical concepts to solve a very computationally complex game in less time than traditional approaches have done so.

That type of stuff is cool to me and it required going to college.

I'm not saying college is useless, and of course there are careers that require college. I wouldn't want someone performing heart surgery on me that only graduated from high school and just thought they'd try it out.

My point was that college is PUSHED on EVERY SINGLE STUDENT. They make it sound like you either go to college to do 'what you want to do' (sometimes it's only what you think you want to do) and make tons of money or you go flip burgers or something for minimum wage. There's no in-between.

They shun blue-collar work, skilled trades, manufacturing jobs, anything where you get your hands dirty or even put your life at risk to earn every penny you make. Doctors and lawyers are held as the gold standard, and if you don't meet that they make you feel like you'll never amount to anything. Sure, these jobs aren't for everyone, but they offer decent pay if you're willing to learn the trade and put in the work.

Could I have gone to college? Sure. I had the grades for it and was always a quick learner. Hell, I never even studied during high school and aced every test. Everything from algebra to chemistry was no problem for me. I paid attention in class, took the notes, did the work, and I never sweat when there was an exam coming up, never studied a single note I took while in class. It was as if when I wrote it down it etched into my brain somewhere. Too bad that was temporary as I hardly remember anything from chemistry anymore, but that's beside the point. I could have done well in college. I could have gone for anything I wanted. The trouble was, I didn't see the point because what I wanted to do and what I was happy doing didn't require college, and college costs a lot of money... so I chose not to go. Now I feel like I'm ahead in life while everyone else my age is struggling because of college loans they can't pay because the jobs didn't exist in the field they went to college for because they were DUPED by the schools into thinking that they NEEDED to go to college to make it in life.

The EU has been creating fake and useless college degrees, such as those related to the invented topic of "psychology".
There's a large number of college degrees that were invented by the EU in order to make sure that their people would not be doing anything productive or anything that could potentially harm the elites, making sure that their knowledge or perceived knowledge is actually a fraud!
Regarding "psychology", most if not all psychological conditions, are an invention of the EU secret services and of the British Empire before that. There's absolutely no doubt that Jack the Ripper was an early drug experiment conducted by the British secret services to demonstrate what effects would their opium war have against China, and to promote such opium war. Later during the 1950s, the opium war was renamed as "war on drugs". Many still believe that the war on drugs is an attempt by the west to combat drug usage. The exact opposite is true. The west is trying to spread drug usage as much as possible. For example the famous "Krokodil" drug mix is an invention of MI6 and the Italian mafia that only takes orders from the Italian secret services.
All these old techniques of mental state alteration are nowadays mixed up with EU's extensive usage of MKULTRA brain manipulation technologies revolving around nano-technologies and radio communications.
All of these tricks produce effects on people''s ability to reason, correctly assess reality and interact normally with others. The EU secret services has given separate names to each effect, but has kept the cause secret, to create a useless business of control, oppression, violence, insanity and overall social dysfunction.
So called "psychologists" and many other invented fake professions, typically do one and only one thing: Fight a symptom, or at least attempt to do so. They either never found the root cause, or they have never wanted to deal with it. In fact eliminating the root cause will terminate their highly unproductive jobs.
This is exactly what MI6 operative Yuri Bezmenov tried to obfuscate in the head of western citizens during the 80s.
He talked about "Active Measures" by the Soviet Union to take over the west. That was simply a cover up for "Active Measures" by the western political elites to stay in power even though most people in the west wanted them gone. The trick is that somebody who is a Psychologist or who performs another kind of invented profession cannot threaten the position of the EU's political elites with his/her understanding of a skewed reality, and therefore the EU has trained them in large quantity.
The more useless degrees are handed out, the less useful ones are handed out. That means an overall slowed down progress both in science and in social matters, that tends to keep western oligarchs in power since the times of Athens and Sparta.
Additionally, many of these fake professions associated with fake degrees are actually an "Active Measure" themselves, that were mostly designed to enforce colonialism and more recently its spin-off "Globalization".

These attempts of resistance by the EU and the west are purely futile, and will lead to the overall demise of whoever adheres to the principles of oligarchical control, due to its backwardness.
For the first time, after almost 1000 years, it is possible for patriotic, nationalist and evolutionist "State Interests" to prevail over oligarchy, due to certain types of advances in technology and in intelligence gathering systems, which have been ironically invented by the west, mostly as tools of oligarchical power against their own people.
In short, history isn't ending, but just got into a nasty turn for the EUro#ers.

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