Over One Trillion Dollars in Student Loans

July/17/2017 5:44AM
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Injustice is a big topic in politics. The media is fixated on the injustice of the Russians stealing the election from Hillary. There is a bigger injustice occurring in my country, but only a non-biased journalist with a good work ethic would dig into that and expose it to the population. That’s the injustice of college tuition and the ensuing student loan bubble. That student loan debt is now larger than the mortgage bubble was before it burst. Like the mortgage fiasco no one notices until the bubble bursts. Nor, does anyone care about the root cause.

The Economist reported in June 2014 that U.S. student loan debt exceeded $1.2 trillion, with over 7 million debtors in default. In 2014, there was approximately $1.3 trillion of outstanding student loan debt in the U.S. that affected 44 million borrowers who had an average outstanding loan balance of $37,172.

I wrote a blog about it over two years ago and nothing has changed.

January 2015


Statistics for College Tuition

January 5, 2015

Elizabeth Warren and the academics in this world are looting college students and putting the stiff wind to their faces for the rest of their lives. Here are a few statistics to support my charges.


College tuition has gone up 1,100% since the late 1970’s while inflation in the same period is up 240%.


In 2010, a study was done. It compared time in the classroom for professors to 20 years earlier. Their teaching load is shrinking from 12-15 hours a week to 6-9 hours a week. Yet, 75% of a college budget is spent on personnel expense. The B.S. put out by colleges says professors must do increased research, more extensive classroom prep time, committee work, plus administrative and counseling time. Translation: your kid’s tuition pays their salaries but they double-dip with research and consulting time. And, like most bureaucracies, they keep adding administrators and that means more meetings to keep the non-teaching executives busy. Result: you pay a professor $200K to teach two to three classes a week for 28 weeks a year.


To the bureaucracy issue, the number of college administrators has increased 50% faster than professors in the past 15 years. Now, it’s one per 3.5 students. Can you believe that? That’s a lot of babysitters for the professors and the students. What are all these clerks doing? Building the college president’s empire, that’s what. Remember, it’s free money with zero accountability. Who cares? Do college presidents care they are destroying the futures of their students with student loans that may never be able to be repaid?


Maybe one in the entire country cares.


Mitch Daniels, the former governor of Indiana, is the president of Purdue. He’s been attacking the system and making some progress. But, the state universities of California hired none other than Janet Napolitano, former governor of Arizona, to run their numerous state colleges. She almost bankrupted Arizona while Daniels balanced the budget in Indiana. Old habits are hard to break.


Over the past 20 years, the building spree at colleges has doubled. Not for classrooms but for all sorts of prestigious frills like climbing walls, luxury dorms, student centers that rival the Four Seasons and other such nonsense. A few university presidents need to go to prison and share cells with those hated Wall Street people. Lock Napolitano up with Bernie Madoff, a perfect marriage. Except Bernie stole from the rich and Janet is stealing from the kids who borrow money to go to college. Elizabeth Warren doesn’t like Bernie, but she and Janet are friends.


Here’s a thought. Maybe you parents who have young kids in elementary to high school need to worry less about whether your favorite college team is going to make the playoffs and spend more time trying to figure out where the $250K is coming from for each of your rug rat’s college tuition. Less about whether that pro coach will take the $8 million a year to coach the football team and more about how to fire the jerk who is mishandling the entire institution. Believe me, this is serious. With the single exception of Mitch Daniels, there is not one college president anywhere in this country who cares about fixing this problem. There may not be one idiot in Washington, D.C. who thinks about it more than once a year. There may not be a parent with kids younger than 15 who cares. But, there are one hell of a lot of young people between 16 and 30 who are worried sick. Try to pay back a $60K student loan when you are driving a cab with that degree in humanities and living in the parent’s basement.


Wake up folks, you slept through the housing bubble. You watched while our federal government let the money flow through Freddie and Fannie and the FHA and forced banks to make bad loans in the name of diversity, and when it destroyed the economy, the culprits got off scott-free.  Now, it’s flowing again to colleges through grants and to kids in the form of bad loans. People paid the price when houses and jobs were lost. Markets went to hell and banks were bailed out. If you want to stop the train wreck this time, you better act now or just watch in a few years as the cars pile up.




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Comment (1)

  1. Doug Gordon says:

    Well, I have no children, but I still care. This is what happens when government tries to make things “affordable” by subsidizing it (HEALTH CARE!!!). Inflation in health care and college tuition are mostly the same.

    Personal story: 1973 fall semester at University of New Mexico – Albuquerque tuition $200, sadly I don’t remember fees if any. Fall 2016 tuition and fees $3573, a 1786% increase (might be slightly lower if I had fees).

    I lived at home. I went away to grad school, but had TA/fellowships and left school debt free with a PhD. Bought a house on my housing trip for my first job right out of school, I doubt this story repeats for many college students these days.

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