We all watched the mortgage meltdown as it unfolded. Easy money made housing prices rise. Easy money provided by our government through Freddie, Fannie, and the FHA, guaranteeing home loans. And, the same federal government insisting banks and lending institutions give a certain percentage of mortgages to minorities regardless of the credit-worthiness of that percentage. Then defaults grew and only a few were watching. When they overwhelmed the system, the house of cards crumbled and down came the economy. The politicians who allowed the mortgage guarantees blamed the lending institutions and got away with the deflection.
Still we watch as the same thing happens with college tuitions. Over thirty percent of those students who are entering college and getting government loans don’t go back for the second year. They take jobs that won’t allow them to live and still repay the loans. Others who last longer than the first year and don’t graduate fall in the same category. Even those graduating are living in poverty because of the weight of the student loans. Many are forced to move back home.
The economic drag caused by a huge percentage of indebted young adults will have numerous long-term negative consequences. with the $1.2 trillion in estimated outstanding student loans, that’s a lot of young people and a load of debt. Idiot politicians, like Dick Durbin, D-IL, run campaign ads saying they will promote new laws to allow re-fis of student loans. This is like finding a drug that will increase the number of Ebola survivors, but ignoring Ebola.
The millennials, as they are called, are moving back in with their parents, putting off marriage, earning less income, building less wealth, and living with excessive student debt, all so inept university administrators can continue to run inefficient institutions. That’s the Ebola. In summary, it’s a smaller American Dream, a lesser standard of living than the previous generation. A new first in America.
College tuitions, like home prices did, just keep rising. Inefficiency is rampant. As home prices rose owners took home equity loans to buy boats and RV’s and flat screen TV’s. Free, easy money. There is no ceiling yet for college tuition. Grants from the government, student loans, and foreign and out-of-state tuition keep the easy money flowing. College presidents are spending like drunken sailors. Very few, if any, have a lick of business sense, just like the clowns in Washington DC.
The College Board, a nonprofit that promotes college access, published a report that says the average in-state student pays $9,000 to attend a university while out-of-state is an average of $22,000. The University of Alabama has 30 recruiters out looking for out-of-state students. There are 600 fewer in-state freshmen in this years class and 500 more out-of-state freshmen. The state of Alabama gives the university $144 million in appropriations from Alabama taxpayers and the university denies Alabama residents admission as a reward for that support.
We watched the tech bubble grow and burst. We watched the housing bubble grow and burst. And, we watch as the college bubble grows to a size where it must burst. Fool me once, shame on you, fool me twice, shame on me. Fool me trice, ?
Leave a Reply