The Next Bubble

[2centsworth]

Higher Education!!


Universities On The Brink

Louis E. Lataif (http://search.forbes.com/search/colArchiveSearch?author=louis+e.+and+lataif&aname=Louis+E.+Lataif), 02.01.11, 01:30 PM EST The ever-increasing cost of education is not sustainable.

http://ads.forbes.com/RealMedia/ads/adstream_lx.ads/forbes.com/opinions/story/id1557005121/1521971826/x92/OasDefault_v5/default/empty.gif/534c556762553143362f55414230626b?adTerms=Louis+Lat aif+College+Education+Bubble+Economics+Debt (http://ads.forbes.com/RealMedia/ads/click_lx.ads/forbes.com/opinions/story/id1557005121/1521971826/x92/OasDefault_v5/default/empty.gif/534c556762553143362f55414230626b)http://ads.forbes.com/RealMedia/ads/adstream_lx.ads/forbes.com/opinions/story/id1557005121/2006969428/x91/OasDefault_v5/default/empty.gif/534c556762553143362f55414230626b?adTerms=Louis+Lat aif+College+Education+Bubble+Economics+Debt (http://ads.forbes.com/RealMedia/ads/click_lx.ads/forbes.com/opinions/story/id1557005121/2006969428/x91/OasDefault_v5/default/empty.gif/534c556762553143362f55414230626b)
Higher education in America, historically the envy of the world, is rapidly growing out of reach. For the past quarter-century, the cost of higher education has grown 440%, according to the National Center for Public Policy and Education, nearly four times the rate of inflation and double the rate of health care cost increases. The cost increases have occurred at both public and private colleges.
Like many situations too good to be true--like the dot-com boom, the Enron bubble, the housing boom or the health care cost explosion--the ever-increasing cost of university education is not sustainable......


more (http://www.forbes.com/2011/02/01/college-education-bubble-opinions-contributors-louis-lataif.html)





What will they learn? (http://whatwilltheylearn.com/)

[boutons_deux]

Just as big as the disaster of non-profit colleges is the for-profit scam colleges, which are down there with pay-day loan sharks. Naturally Wall St is deeply involved in for-profit colleges and pay-day loan sharks.

[greyforest]

funny, i was just talking about this in some other thread when someone said what i had to say was bullshit

[boutons_deux]

In states where pay-day loan sharks have seen their interest rates capped down from 400% to "only" several 10s of %, they have worked with Indian reservations so that loan sharkers can claim immunity from interest rate caps as encroachment upon Indian sovereignty.

[Danny.Zhu]

Some of the reason is rich international students.

[boutons_deux]

yep, state colleges are not only hugely increasing tuition for in-state students, but also accepting more out-of-state/foreign students because they pay more. College is a business.

[Blake]

I find it sickly fascinating that its easier to stop paying a mortgage on a $300k house than it is to default on a $50k student loan.

[lazerelmo]

"Sadly, more federal student aid simply fuels the rising costs. The cost of education tracks with the growth in federal aid; the transaction cost for students is not lowered. The federal money effectively flows directly to the operating expenses of the Universities-which seem to rise in direct proportion to the flow of federal funds." -from the article

exactomundo

As long as there are pell grants and student loans, The price of tuition will continue to be artificially inflated.

[boutons_deux]

The Repug/dubya big scam was having banks do the loans, with the taxpayers guaranteeing the loans. Just another form of private gain + public risk.

When the banks handed the student loan to a collection agency, the collection fees often exceed the loan amt. I read one article where a girl was $17K behind, and the scum sack collection agency added $51K collection fee.

[lazerelmo]

The Repug/dubya big scam was having banks do the loans, with the taxpayers guaranteeing the loans. Just another form of private gain + public risk.

When the banks handed the student loan to a collection agency, the collection fees often exceed the loan amt. I read one article where a girl was $17K behind, and the scum sack collection agency added $51K collection fee.

Sorry, this was LBJ 's baby. Either way, anyone in the list of presidents since then could have pushed to put an end to it.

[boutons_deux]

no, having banks make the eduction loans and collect the interest rather than the govt directly was a Repug privatization scam.

Get who gets fucked? the students.

Guess who gets $100Ms in guaranteed profits? the banks

[coyotes_geek]

Students are hardly getting fucked by having to pay interest on loans they take out.

[Trainwreck2100]

the loans come from the guvment now, however they are talking about getting rid of the perkins loan which should bring some costs down

[lazerelmo]

Guess who gets $100Ms in guaranteed profits? the banks


You said it "guaranteed" by the government. Guess who get's screwed on that deal?

LBJ's "Great Society"

[boutons_deux]

Great Society has nothing to do with Repugs' privatizing student lending.

[greyforest]

Students are getting fucked hardly by having to pay interest on loans they take out.

Fixed this for ya!

http://articles.latimes.com/2011/feb/06/business/la-fi-for-profit-colleges-20110206

[coyotes_geek]

Fixed this for ya!

http://articles.latimes.com/2011/feb/06/business/la-fi-for-profit-colleges-20110206

It wasn't broke. It's not the lender's fault people are borrowing money to get worthless degrees.

[lazerelmo]

Great Society has nothing to do with Repugs' privatizing student lending.


There would be no loan program without the "Great Society". Direct or Private

[boutons_deux]

The lenders, like military recruiters, are paid by the amount of loans they write.

As always, the wrongies place all the blame on the individual rather than on the often bad-faith, lying, corrupt, predatory institution. It's a very unequal adversarial relationship, a first-time, naive borrower vs a professional, trained, experienced, full-of-lies-and-tricks lender supported by complicit lawyers.

[coyotes_geek]

The lenders, like military recruiters, are paid by the amount of loans they write.

As always, the wrongies place all the blame on the individual rather than on the often bad-faith, lying, corrupt, predatory institution. It's a very unequal adversarial relationship, a first-time, naive borrower vs a professional, trained, experienced, full-of-lies-and-tricks lender supported by complicit lawyers.

So if you decide you just have to have to attend U. of VRWC to get your bachelors degree in Sarah Palin Studies and you go ask a bank for money, what's that bank supposed to do with you? Are they supposed to take it upon themselves to decide they know your career prospects better than you do and not loan you the money? Is it their obligation to deny you the resources to get the education you want, for your own good?

[MannyIsGod]

CG, I get what you're saying but having my tax dollars go to subsidizing profits for banks when the government could have done direct loans really really really bothered me. There was no reason for it other than to make bankers happy.

I have no problems with students paying interest but I did have huge problems with students paying that interest to banks who had absolutely no skin in the game.

[boutons_deux]

nobody forces the banks to lend.

lending to students is guaranteed by the US govt, and students can't shake their school debts through bankruptcy

They don't care what your prospects are, like the bubble mortgage lenders didn't care if you couldn't pay your mortgage, they pocketed their fees and sold the mortgage into the financial casino.

[boutons_deux]

btw, students drop out of for-profit schools at 2x the rate of non-profits, something like 50% vs 25%

and a diploma from a for-profit school is mostly useless, the graduates find when trying to get a job vs students with non-profit diplomas.

[coyotes_geek]

CG, I get what you're saying but having my tax dollars go to subsidizing profits for banks when the government could have done direct loans really really really bothered me. There was no reason for it other than to make bankers happy.

I have no problems with students paying interest but I did have huge problems with students paying that interest to banks who had absolutely no skin in the game.

I'm not a fan of the program either. That being said, it should be noted that by having the government back those loans the students are getting much lower interest rates than they would be able to without that backing. It's not like the students are completely devoid of any benefit here.

[coyotes_geek]

nobody forces the banks to lend.

Nobody forces the students to borrow.


lending to students is guaranteed by the US govt, and students can't shake their school debts through bankruptcy

I don't have a problem with this. An education can't be repossessed. How else are taxpayers going to stand a chance at recouping the money they lose when some student defaults?


They don't care what your prospects are, like the bubble mortgage lenders didn't care if you couldn't pay your mortgage, they pocketed their fees and sold the mortgage into the financial casino.

I'll ask again. Do you want banks deciding what is and isn't good for you? Do you want the bank to deny you the education you want if they think that's what is in your best interests?


btw, students drop out of for-profit schools at 2x the rate of non-profits, something like 50% vs 25%

and a diploma from a for-profit school is mostly useless, the graduates find when trying to get a job vs students with non-profit diplomas.

Whose responsibility is it to be aware of these facts? The student who is going to take out the loan? Or should the bank be deciding for people whether or not they're likely to drop out, or get a worthless degree?

[MannyIsGod]

Its all moot now with the Direct Loan program. There are still private student loans but those aren't subsidized or guaranteed by the government.

[sickdsm]

In states where pay-day loan sharks have seen their interest rates capped down from 400% to "only" several 10s of %, they have worked with Indian reservations so that loan sharkers can claim immunity from interest rate caps as encroachment upon Indian sovereignty.


Did not know that. That explains a lot.

[TDMVPDPOY]

why dont u guys study abroad on their international campuses??? would be cheaper...