Subprime Student Slaves: The Lowlife Trap of Higher Education

155 | By Shah Gilani

“The strong to seem to get more/While the weak ones slave/Empty pockets don’t ever make the grade/Mama may have, and Papa may have/But God bless the child that’s got his own/ That’s got his own.”

We can thank the late, great Billie Holiday for those lyrics. And we can thank our higher education system for giving “the child that don’t got his own” a chance to get some.

Some debt, that is.

Students, many of them adults looking to gain new skills, are being systematically ripped off and enslaved by schools and lenders, blinding them with hope about what a higher education can do for them while bilking them for billions in the process.

It’s a dirty game, and a big one at that. You probably know, because you probably owe.

But wait.

First, let me offer some insights on the market before I get to my indictments…

Why the Doom and Gloom?

So far, so good…as far as earnings season, that is. Three quarters of companies reporting, so far, have beaten Street expectations. And 81% have offered up better than expected revenue forecasts for the future.

So… why all the doom and gloom?

For one thing, expectations have been repeatedly ratcheted down by analysts. The Street is only looking for 4% revenue growth and 3.5% profit growth in the first quarter. That revenue growth figure is well below the longer-term average rate of 6.2%; and 3.5% profit growth looks like it’s off a cliff compared to the 9.2% profit growth in the fourth quarter.

Given the better than expected numbers so far – and the likelihood of more to come – and with depressed expectations presenting a lower hurdle for companies to easily clear, we have to ask ourselves again…why all the doom and gloom?

Oh, yeah. We’re not in this alone. We’re part of the global economy now.

European Debt is Still a Worry

I’ve repeatedly said (and I’m saying it again), there is not, not will there be a decoupling of U.S. economic prospects from the global game we’re such a big part of, now and forever. We may see bright spots here and there, but if and when it rains on Europe or China, any sunshine here will be blotted out by clouds and eventually we will get wet.

Right now, in spite of Q1 earnings being pretty darn good (again, so far) it’s the prospect of clouds forming over Europe, again, and clouds over China that markets are worrying about. And they should be. We are all in this together.

Spanish 10-year bond rates rose to 5.93% on Friday, up from less than 5% just a month ago. Spanish banks borrowed $413 billion from the ECB in March.

Across the Eurozone, banks borrowed a total of 1.1 trillion from the ECB in March. That’s a lot of borrowing from the central bank. Remember when borrowing from any central bank was a sign of weakness? Duh… it still is. Just because it’s become a way of life, or a steady lifeline, doesn’t mean it’s normal. It’s bad.

Italy’s 10-year rose to 5.52% from below 5% in less than a month. In case you’ve forgotten, 6% is sort of the tipping point (at least it was for Ireland and Greece), above which investors balk at any country being able to keep borrowing at such a high cost and being able to keep paying back ever increasing debts.

At the same time, Germany’s 10-year bund plumbed recent lows around 1.65%, and over here our 10-year yield fell from 2.40% in mid-March to 1.98% last week.

Not that anyone out there doesn’t get it, but in case you’re a little groggy from your Saturday night festivities, when bond yields rise for suspect borrowers, that’s bad news. And when money floods into more stable sovereign debt instruments at the same time, like Germany and the U.S. 10-year paper, that’s a “flight to quality,” an almost panicky move.

Not that I’m saying there’s a reason to panic. Just do the math, and keep doing it.

Stocks are at a Pivot Point

Stocks in 2012 have seen tremendous rotation. Last year’s laggards were bought up early in 2012 and are big winners. Not that last year’s winners were dumped, they weren’t. They’ve risen too, but by about half what the laggards have done.

So, most stocks have joined the party. That scares me, especially if we see more flight to quality in the bond market and equity investors (well, they’re traders really) continue to take profits.

Not that I’m saying there’s a reason to panic. I’m just saying that unless investors come in and buy whatever dips we get, the trading crowd will tire and dips may become drags.

In short, I am far less bullish than I was a couple of months ago. I’m basically neutral.

We should see buying on this recent dip. If we don’t see support and we see “vacuum selling” (no-bids and heavy volume on down days), I’ll turn outright bearish.

Be cautious here. We’re at a pivot point.

Back to School

Okay, now it’s on to the enslavement of students of all stripes. I’ve got to bring this to your attention, if you aren’t already all over this.

The Federal Reserve Bank of New York recently came out and said student loans outstanding are $870 billion. That’s bunk. It’s closer to $1 trillion when you “capitalize” (add in) outstanding, unpaid interest on delinquent and defaulted loans.

There are at least 37 million borrowers who owe money on school loans.

Those between the ages of 30 to 39 owe the most, about $28,500 each. Those between 40 to 49 owe on average $26,000. So, it’s not just “kids” coming out of schools, it’s a good cross-section of the population (shall I say the “educated” population?).

Barron’s cover story this week (and an even more indictment-esque story on one for-profit school, ITT Educational Services) on this very subject is where I’ve gotten the stats I’m offering up here. You have to get the paper and read the two articles. They are excellent and they will shock you.

Higher education costs keep getting higher. From 1990 through 2011, tuition costs at four-year schools rose 300%.

Two thirds of graduates in 2010 owe an average of $25,250 each.

The total outstanding student loan debt load is greater than all outstanding auto loans and greater than consumer’s credit card debts.

Think about that.

Where are the Jobs?

Now, look around. Where are the jobs they’ve been promised? How are they going to pay back the money they owe on the loans they took out to chase the promises they believed?

This is a national travesty. Schools are enticing students, and increasingly adult students, to borrow to advance their employment prospects. What they don’t tell them is that they’re going to be enslaved by the debt burden they take on.

Government-backed student loans (far and away the majority) – and, as of 2005 (dirty legislation lobbying by banks), private loans made by banks and other lenders – have to be paid back. Those loans can’t even be discharged in a personal bankruptcy!

The government can garnish your wages, take your tax refund, and grab your social security check, and it punishes defaulted borrowers by labeling them as if they had criminal judgments rendered against then in a court. As of 2005, banks aren’t any better to borrowers.

For-profit “technical” and “trade” schools are some of the worst offenders. They promise borrowers a better life through better skills and sometimes lend them the money to get to that fork in the road. It’s a fork because not even half of trade school students graduate. But they still owe what they owe.

What’s become of our system of higher education? Why are university presidents paid millions of dollars? Why are tenured professors getting paid so much? Why are tuition costs going up and up?

Oh, that would be because there’s money available to students to pay for it all. Come on kids, get an education. Come on all you struggling adults trying to get new skill sets to get jobs, get an education. And, here’s the money, you can pay it back with the good job you’re going to get.

What’s really going on here is that higher education has become a racket. Yeah, I said that.

I want to hear from you. What do you think? What’s your experience? What do we have to do about where we’re headed as a nation that needs better education facilities at more affordable prices?

Let’s make this OUR election year platform. Write to me. Get involved. I’ll do the heavy lifting, but I need your support and participation. You’ve got a computer and email, talk to me. Talk to the nation. Let’s make our voices heard.


155 Responses to Subprime Student Slaves: The Lowlife Trap of Higher Education

  1. Kathy Bunkowski says:

    I can’t agree more with your article. My daughter is a junior in High School. We started looking at colleges and the costs. I think the whole education system when it comes to tuition is a scam. These schools expect us parents to remortgage our homes , have our young kids take loans on top of that and we all no there are no jobs, and the job that are out there even with they higher education do not pay much. I am originally from Poland and I really considering sending my daughter there to college where it is free. At least I would not have to remortgage my house and at least she should not graduate with ton of debt. But that is not an option for most of people living in USA. I hope something can be done and maybe if interest rates were to go up and the kids would not be able to borrow so much maybe the cost of tuition would go down. But again when Big Banks run the country and make money of us nothing will ever change.

    • Tae says:

      My grandmother was the daughter of Polish immigrants, she was going to go to school there as she got a scholarship, but the Germans invaded before she was going to go…God Bless Poland!

  2. Barbara Anne says:

    my daughter and stepson are exactly in this profile of having too much debt in their early 30s (incurred for two masters degrees.) Folks in our age range are reluctant to retire and make room for younger workers because of volatility and uncertainty, not to mention low housing values. We fear not being able to afford to live and they are struggling with less hope for a secure financial future.

    If we could become sufficiently confident to slow down and allow space for these debt ridden, smart hard working people, maybe overall things could improve somewhat.

    thank you for your insights.

  3. Mike Dillon says:


    I agree with you 100% and have been following this issue for sometime. Like any other powerful lobby, academia will not willingly change this system. It will be up to consumers to force change by staying away from 4 year universities and finding other options, by negotiating tuitions and fees rather than just blindly paying them,pressuring State Governments to cut higher education funding while freezing or lowering tuitions. Eventually the pendulum will swing back and people will realize that the cost of an education is simply not worth it.

  4. John Murgel says:

    Hi Shah,

    I agree with you on your remarks about our education system. What is the answer to getting our teenager those skills needed to getting ahead. I think there is something fishy going on with college costs rising like they are. I’m just at a lost of an alternative at this point for a daughter that is attending AU.

    Concern Parent

  5. Bill says:

    What makes this even worse is not just the cost of the education but the quality. I’ve been in my career for 14 years, and I was fortunate that I leveraged an associates degree into a career that has made me almost a million dollars in the course. But what I see is my career prospects diminishing as companies try to go on the “cheap” and hire less experienced people at a fraction of the cost, followed by calling me in the 11th hour to fix the work they got so cheaply done. It becomes clear to me that the education these “students” are getting aren’t even preparing them for the real world careers they are striving for.

  6. Veronica says:

    When I came to the US with my family in 1979 we found we could’nt use our UK qualifications as they were not accepted in the US medical world – so I went to one of those Techie schools and paid to learn programming – BUT the first thing I did BEFORE that, was search the jobs listings to find out what was NEEDED – multiple programmer positions !! So – did the training, passed with flying colors and have since had a 30+ year successful career – however had I NOT seen all the ads for programmers heaven knows what would have happened since there were relatively very few other postions listed in quantity. I would suspect that kids these days are not being told to
    first know what the demand is before launching into expensive training – part of this is cultural in satisfying the expectations of their friends and family – I am telling my grandchildren these days -FIRST find out what the economy is looking for, and plan your life accordingly – you can get a degree in your first love later, if you can afford it – survival counts FIRST !!!

    • David says:

      Being a foreigner in Canada, I am unable to comprehend how Help Less your American society appears.
      Survival First is where it’s at; even in my country where we have Federal sponsored education savings programs that allow families to put away monies for their children’s future. Coupled with tax free grants scaled to income during attendance at university and college.
      My family is designated as economically on the borderline of poverty. With some simple foresight and using our government program, my child is completing post-graduate studies without any debt.
      Suffice to say, that without education savings programs in place, my child may not be in this position. We are grateful.

    • H. Craig Bradley says:

      I agree, be practical about your abilities and the current real job market’s opportunities. Sure, there is a “hidden job market” out there of unadvertised positions. If your good at finding them, you will have a leg-up on the competition in any economy. Most people are not.

      As for Foreign Medical Grads, times have really changed. O’ Boy they have changed. The ONLY way ObamaCare can work is to both train more general practitioners (GP’s) here in the U.S. AND admit more foreign medical graduates. These foreign doctors still must do a residency in their speciality to become board certified to practice medicine in their state of residence. The demand for new internists will greatly exceed the supply in just a few more years.

      Remember the movie “Gran Torino” in which Clint Eastwood’s character (Walt Kowalski) was overwhelmed with change, including the retirement of his family doctor and his replacement with a foreign language speaking physician? Get ready for it, its already happened in our large coastal cities right now! Are you Armenian? Iranian? Indian? Chinese?

    • James says:

      Veronica has the right take on reality. I like to think a person can successfully pursue a dream, but I think even Jesus waited until His family and personal affairs were in order, financially and otherwise, before undertaking His earthly mission.

  7. jrj90620 says:

    Of course it’s a racket.Just like our healthcare system.When you have the consumer not directly paying the costs,you end up with overcharging.Eventually our socialist govt will figure some way of forgiving these debts.Since,in the long run,you can’t get something for nothing,even though most Americans believe you can,this will result in higher govt deficits.Then a lower currency,as the Fed monetizes govt debts.There is no reason,with modern internet,technology,that most people can’t learn much cheaper than though overpriced physical schools.Things are changing and eventually this ripoff will end.

    • DENNIS MILLER says:

      yes, the socia;ist government Will forgive the debt. All you have to do is get some numbers tatooed on your wrist.

      • colin adese says:

        instead of on your ass! like yourself.
        now some of my best friends who own nascar teams/companies have er, some of them fellas tweeking this and that with various shaped tools. now these folks could steamroller the major automobile counterparts in japan and china! alas nobs like you would rather nurture lesser/ inferior talent in those parts to spring a buck and then have the audacity to ridicule, stereotype. . . . if you have nothing positive to say, criticism can be . . . then shut the fcuk up!!!

    • David says:

      I am 70 years old and too young for all of this. My english language isn’t the greatest but at least I try to be understood. I love you, you are funny. A fakir too, eh?

  8. Dawn says:

    Love your work Shah!!
    I am a 47 yr old, newly unemployed, formerly self employed female (ex got the business in the divorce) that is in a catch 22. The banks aren’t lending for new business upstarts so I worked at a bank in mortgages after my divorce but got downsized. The job positions I have 15 years experience in won’t hire without a degree and the other, lower paying jobs won’t hire because I’m ‘overqualified’. I would like to have a degree, but at this point it would take far too long and cost far too much. I guess it’s Burger King for me, but even that has a lot of competition!!

  9. Jim says:

    Love your writings and philosophical insights. The education “problem” started years ago when the goal of eduction was shifted from improving the mind and learning for it’s own sake, to a philosophy of income enrichment. A degree was equated with more money and a financially improved life style.

    Schooling became synonymous with career advancement — real learning went out the window to be substituted by an “investment” in the future.

    Courses were “dumbed down” new “bird” courses sprouted up –anything to keep enrollment figures higher and higher – students became not scholars but numbers and the educational empire expanded, like the housing market — where everyone was “entitled” to a college education much the same as everyone was “entitled” to a home with granite counter tops, and in both cases, the dreams turned into financial nightmares.

  10. Fred Schlageter says:

    Shah, Enjoy your col, I have been saying this is a scam right along with the housing crisis and the financial crisis since 2000. Not because of Bush but because of the people who got him elected. I will support you in all of the above, really enjoy your insight. Thanks for your time, Fred

  11. JM Schroeder says:

    Post High School education is like Medical Care in that it largely (too largely) is
    paid by third party payers. Reminds me of credit cards. Many of us buy because we want something, although often we do not need it. (Just look in peoples’ clothes closets.)
    In all three circumstances we really do not have to face how much we are spending until later. If we had to bargain with the doctor, dentist, store or our school over what we would pay, we might purchase less and their prices might be lowered.

    • Arthur Robey says:

      JM Schroeder says

      Post High School education is like Medical Care in that it largely (too largely) is paid by third party payers.

      Therein lies the solution.
      The institution that offers the education make the loan.
      That way their fortunes will be tied to that of their students.
      Joined at the hip, as it were.

      Nothing could be finer in the State of Carolina.

  12. Don Wesley-Brown says:

    Mr. Gilani,
    This is a most timely email for me to read. I’m a seventy six year old veteran on a small VA Check and Social Security. I’ve been a student of military history ever since I could read. Matter of fact I enlisted upon my graduation from High School and thirteen years later resigned my commission as a regular army officer Captain. During this period of time I went to College on the Korean GI Bill and got my BA. and was commision back into the military.

    My interest in military history caused me over the years to build a library of over five thousand books on military history along with appropriate maps, prints, oil painting, etc. It appreciation of my ancestor’s serving in the miltary from the French and Indian wars, through all of America’s wars, I named the library The Triplett Memorial Military History Library. Matter of fact it was written up by the Associated Press. I have subsequently given this collection of books, maps, prints, oil painting, etc., to Reinhard University located in Waleska, Georgia. Due to my experience as ex-milatary and my knowledge of military history I expressed an interest in teaching military history at Reinhardt. I was told that I had to have a masters in military history to teach, kind of like telling Lyndon Johnson that he had to have a Phd in Political Science to be President.

    Subsequently I went on the internet to see about locating a school to see f I could do on line schooling. Needless to say it is amazing how many school bird dogs have emailed me and called. In the process I have come to the impression that the only interest is another source of money for the school rather than my education.

    Predicated upon your commentary, the timing of it for me is most approprate and appreciated. It has given me much thought as to my decision.


  13. Kartik says:

    I managed to a Masters Program though an online school for less than $8000 for a 2 year program. I did this while I was working in a job. My friend was so obssessed with big schools and big brands that he quit his job, joined a Ivy League school, paid over US $50,000 for the exact same program. Damn those books, questions, syllabus all are exactly the same .. its just that u have a Ivy League Phd professor teaching the course !! He has a student loan of $35,000 .. my company doesn’t need him after his masters as we are going through tough times, no one else needs him too and hence he is now working for a call center company at $12 an hour .. so much for a fancy masters program ! Moral of the story – if you are very clear on what you need – pick up the course through a community college or a online program .. all these big name colleges are worth nothing when employers go around asking for real world skills

  14. Barb says:

    Be smart about your educational decisions, like anything in your life. Do your own research. It is the same in Canada where I live. As a mature person returning to school, I researched the programs and tuition costs at all the colleges offering the program I was interested in, having researched the job availibility PRIOR to deciding the best program at the BEST cost to me. I ended up taking a program at half the tuition cost, and half the time of the expensive program. The thing is, I am making the same amount of money as the other graduates. The educational institution has quotas to meet, and of course they tried to sell me the program at the higher cost. Buyer beware.

    My son who’s in his last year of middle school, has been taught the principle of reverse educational selection also. His teacher has expressed for them to do their career search based on the job availability market. Look at what jobs are needed, and find your niche based on that. Also, do not FORCE your child into higher education only to have them quit, or change their mind half way through. I have expressed to my son to wait until he is 100% sure of his career.

  15. Don says:

    Several major problems I see. Some of these are not politically correct, but nonetheless true.

    -There is this misconception that college is for everyone. Truth is not everyone has the capacity or desire to work through a college degree. But, oh, my Johnny “deserves” a degree.

    This problem is closely related to the utter failure of our High School and Community College systems. Trade school at a community college would be more appropriate and more than adequate to meet the higher education needs of many college students with the added benefit of leading to reasonable paying jobs.

    -Colleges and universities have been allowed to add progrms that lead nowhere. One example – look at the popularity of the TV show CSI. Everyone wants to be a CSI person. So programs pop up across the country to offer degrees in Crime Scene Investigation. How many jobs are available for these grads? Nowhere near enough.

    Couple this with the mentlity of many colleges that even worrying about placement for their recent graduates is somehow beneath them.

    -One more point – professors are promoted based in large part on their research publications. That’s OK for the big universities with huge budgets and equally large endowments. But for the regular college that has no budget for it but still insists on multiple journal article publications to get tenure and promotion, what a waste. Many college professors publish educational material that is very useful to students, but not acceptable to Deans and Promotion committees. People don’t even read most of these esoteric journal articles, but still they are sought after by all professors. What a waste.

    Just a few of the many points I could raise.

    Just so you know, I am a tenured professor with 23 years in the system.

    I have to sign this anonymous for fear of reprisal from the “establishment”.

    Good luck in changing this system.


  16. dt says:

    This is where the govt. can help. All tuitions should be knocked in half. Useless liberal artist degrees should not get scholarships, only math,engineering & sciences.Technical schools should take the students that don’t belong in college.
    Tenior and teachers pay should be rewarded in output. Get rid of standardized tests.Set up charter schools like the ones in Louisiana, that are doing great now.
    How do colleges have the audacity to charge continually more and more for a college degree that is equal to a high school degree 40 years ago. I asked a recent college which ocean is near her house on the West coast of Florida. She said , the Pacific. That’s $100,000 later, wasted.I could go on. Get rid of the Dem and Rep. party.When people finally realize they are one in the same, with the same agenda, they will realize why we are getting nowhere. Bye.

  17. Don R says:

    Let’s look at this again. It is not the government ripping off the students. It is the government enabling the banks with some questionable legislation from 2005. And, of course, the banks being the good citizens that they are would never do something that would hurt our citizens. Come on, look at the details in the facts that got us here.

  18. Edward Lawrence says:

    The problems is COLA’s! Take any industry, in order to ‘match inflation’ give them a 5% COLA every year for 30 or 40 years and Voila: you’re broke! It really doesn’t matter what the industry is!

    If we didn’t have so many built in COLAs, the costs would have not risen so high and students would not need so much debt. Again the same is true in Gov’t Spending, healthcare etc.

    Crush the COLA’s!!!

  19. dina says:

    YES, it is a racket. What happened to experience and trade schools?

    experience and trade schools was where it was in the 50’s, and that the way it
    should be today. Back in the 50’s you didn’t even go to high school, you worked, took on a trade, joined the navy for your experience. And all the old timers are much smarter than these geks from college. Experience and trades are where it’s at, and companies will soon come to relize that !


  20. JBJB Florida says:

    Nothing will be solved until there are jobs available. There is no under the table money for our legislators with with creating jobs or solving the deficit, only with special interests. Why else would you imagine they would spend millions for a few hundred thousand dollar jobs? Wake up America, both parties have dirty hands. They don’t really care about us. A good book is (Throw Them All Out, by Peter Schweizer). You can look at the first few pages on Amazon.

    We have a possibility of getting out of this with natural gas powering our industry and transportation. Cheap oil was the driver behind our industrial revolution. The rising labor costs in China is causing our labor force to look competitive again. However we need trades people to fill those jobs, but the jobs have to appear first. It is going to be a long road and I think we may implode before we get relief.

    The two party system does not work anymore. They are more like one party with me first intentions. How do we solve that?

  21. Ross says:

    6 years ago, my step daughter was given loans of over $600,000 to buy 2 – $300,000+ homes while her income was $30,000 per year. She lost both houses and filed bankruptcy. She could not dissolve the student loan and got behind. They were going to take her to court where their attorneys could charge “reasonable fees” which they estimated to be $5000. Even though I am already paying 1/2 the student loan myself with over $20,000 remaining, I had to get her current.

    She now has a great job at Verizon although she has NO disposable income (can’t go to the movies), yet she is keeping current on the school loan. We don’t know if graduating from a four year university enabled her to get the job. She is already doing great at work and is in the top ten in sales after 6+ months in a large metropolitan city.

    And my question is, “How do young kids get ahead today?”

    • Edward Lawrence says:

      “And my question is, “How do young kids get ahead today?””

      Well. don’t borrow $600,000 to buy two houses for starters!

    • James says:

      I am going out on a limb here. I think an ideal society is one in which everyone has a job and an opportunity to pursue, once basic survival is accounted for, their dream. I think programs like the local construction projects during the Great Depression (or philosophically equivalent programs) are good and necessary to give everyone a job and people can “graduate” from such jobs to more desirable endeavors through education or hard work or growth in skills outside the survival job by using spare time wisely. Everyone needs to work (given human nature likes to “vegetate), but everyone needs a chance to advance to something they like that is ethical

    • ralph says:

      Ross, the first thing to realize is NO ONE making $30k should begin to borrow that/those amounts for TWO houses-neither of which was needs based….vs. some kind of profit “flipping” motives… a house you can afford to live in and pay for @ 30-35 % of net take home pay….im astounded at young people-without their requisite kids yet-need a home of minimum 3-4 thousand square feet…..WHAT???
      I remember my last year of college (1990) semester cost went from $ 419 up to the princely sum of $479 tuition…..i was livid at such percentage increase (do the math)…….look at todays costs (this was at University of Wyoming, a state land grant )
      Now i’m mad because circumstantially i get to “pay’ for your stepdaughters wisdom (as well as a close in-laws similar “wise” $560k home w/ $35k income….) via bunch of fed offsets, remarks,re-fis, programs etc. merely to stave off the deserved failure/foreclosure due……of course, we’ve been doing lots of that for years- look at ag subsidies, weird research apppropriations, unbelievable foreign aid amounts (even to current foes….)
      Young kids get ahead TOMORROW by not being stupid TODAY…..

  22. ASHLEY GOODMAN says:

    Our government has failed us. We need a new Consitution that amends the way we elect our legislators. They are the bought slaves to industry and big business. This democracy is a farce. It is now an oligarchy run by the rich and infamous. Maybe there are few bright lights on the horizon, with all the natural gas available and large quantities of oil becoming a available, we may survive the economic catastrophe but we need better management at the executive and legislative levels. Austrailia which owns all its natural rescources will we a debt free nation by 2020. Maybe our government should seize all natural rescources and return the bounty to its citizens.

    • Gomer says:

      Maybe our government should seize all natural rescources and return the bounty to its citizens.

      Like they would return the “bounty to its citizens”

      We need a new Consitution that amends the way we elect our legislators.

      DOUBLE OUCH!!!!!!!!!!!!!!!!!!!!!!!!
      We wouldn’t be in the situation that we’re in today if they would actually follow the constitution that we have.

    • figmo says:

      Yes our legislators are bought and paid for by special interests but that has nothing to do with our constitution which mentions nothing about lobbying. Our presidential disaster who many of you believed and voted for, promised to eliminate the lobbyists (just another lie from too many to count). We must eliminate lobbying and shorten the term limits on our congress and provide harsh penalties for those who use their privileged positions to self deal. Have you ever wondered how someone of modest background and means can serve one term in the senate and magically become a multi-millionaire? It sure didn’t come from his/her salry.

    • Fayiza says:

      I almost agree wholeheartedly with Ashley it’s not just the education scam but so many areas. For instance to take it further, natural gas & oil R limited unsustainable, messy, polluting industries. It seems to me that most people seem unaware that like with banking, the energy industry is one of the biggest scams played on us ever. There seems lack of awareness that technology for FREE or at least very low cost energy systems, transportation systems & vehicles(private & public vehicles)have been available at least since the EARLY 20th century. Google Nicola Tesla for instance. But there R several others past to present with fantastic inventions & technologies that for whatever greed induced & diabolical reasons, don’t get utilized. The patents for these groundbreaking, usable & phenomenal technologies continues to be hidden or kept from the public, media etc. simply because utilizing it will certainly severe the deeep pockets of big oil, natural gas, utilities, nuclear & whatever high cost energy systems we use to this day. As for Nuclear, we’re ALL sitting ducks with that “brilliant” idea for energy (can I say radiation, Japan, Chernobyl etc)! I hope more & more people will do some research on these technologies & demand their implementation so we can get away from “dirty”, way to expensive energy systems. Can u just imagine a system with endless FREE and very low cost energy, WOW!

  23. Thomas Rzepka says:

    Do away with the Federal Reserve ( owned by BIG BANKS) abolish IRS and make a fair tax for all, set term limits so things can be changed. Ron Paul has alot of good ideas and not enough people listen.
    If the government ( politicians and employees) had to live on Social security and the same health program they have tried to shove down our throats, things would improve much more quickly. During the last recession congress voted themselves a raise while the rest of us struggled to survive!!!!!!!!!!!

  24. Justin Bays says:

    Do not get yourself in debt to earn a four year degree or maybe even a master’s degree unless the degree is very specialized and then limit the debt by working as you go to school. Student loan programs are a complete rip off especially when you educated yourself to get a job and then can’t find work.

    Improving yourself through higher education, a college degree is an admirable goal and I respect those who chose to do so. But, education is only a step toward employment, (if the economy ever recovers, which is doubtful) and should be understood as such, to often many young and older adults go to college to have an opportunity to be gainfully employed at a better paying job than is the norm for the uneducated, and when they graduate they and often cannot find a job period. The college education does have a significant qualification role in determining whether you will be considered for a job or not in the working world today, as was true in the past. However, now I am beginning to believe we have reached a saturation point of too many college graduates applying for the few positions available and do not see this correcting itself to a substantial degree, in the near future. Simply meaning that there are too many degreed people applying for the same job and in doing so will drive the salary down and make the education earned much less valuable. I can say that
    people whose decide to go to college should concentrate on what their second choice of work will be if they are unable to obtain work in the field of study that they concentrated on in college. I think that the public/private education system for the grades of the 6th through the 12th grade should prepare students for a two prong approach to education and future employment opportunities. That being college and vocational preparatory classes, not emphasizing one over the other but preparing the student for either. Allow the student through counseling an unbiased view of what type of employment is available and forecasted to be in demand for upcoming entrants into the job market. Somewhere along the way, the concept of obtaining a college degree is a must in the job market. This is far from the truth and should be corrected. This concept has lent itself to the notion that working with a skilled trade is not to be desired. Working with one hand’s and mind in repairing and building and not being in a white collar atmosphere is to be shunned and is not a sociably acceptable way to provide for the needs of you and your family. For some reason having dirty hands to earn your living is below the attributes of having a college degree and has been falsely indoctrinated into our society. People should realize the world doesn’t function very well without dirty hands. Go to vocational school study a trade, do some OJT and then work for yourself, you will be very surprised how much money you can earn by being a skilled trade person and normally without all of the stress associated with white collar work. Please understand that there is also a downside to being a skilled trade person, I am not trying to indicate that this is a perfect solution to what ails the job market, but trying to say it is okay to work with your hands and earn your living. Very often when you need a problem fixed with your house or car you pay a premium price to have it done and very often you are in a waiting line to be served.

  25. John says:

    Our financial & political systems are totally out of control. The corruption is right out in the open and it starts at the top of the political and financial pyramid and no one seems to notice or care. How can we expect fairness from a system with this flagrant fleecing of ordinary citizens that has turned into a daily game from the power brokers, be it from Washington or Wall Street. What’s a average taxpayer going to do, that is trying to do the right thing for faith, family and country. Our political system has morphed into just one political party with two extreme, and conflicting view points.

    Now the tail of two roads traveled.

    I have a son in a major University (SWU), graduating next month with a double masters, his tuition is actually being paid from work study and my daughter in law being employed by the university, he’ll owe nothing. A daughter graduating in December from (EKU), a medium size school, with her second degree. She couldn’t find work in her chosen field so she drank the cool-aid and returned to the same school to better her chances in a totally different field, law. So now her debt is enormous and my wife and I paid 100% for her 1st. 4 years. The school promised solid leads for employment but didn’t deliver. Untrained or under trained school councilors who work for and are keeping the schools best interested at the fore front are advising students in most schools, who follow their advise and end up with nothing but a very expensive sheet of paper to hang on the wall.

    We have to change the business as usual corruption in Washington and in our higher education system, and we had better do it now or we are a lost civilization destined to be remembered in history books as another great power destroyed by power and greed! The land of Milk & Honey, ha! The cows are drying up and the bees have their bags packed for the move to China.

    I vote we throw em all out, send a message to Washington and start fresh.

  26. Gomer says:

    I know that there are jobs available in our country, but I feel that it is a limited market in our private sector. More public employees will just add to the burden that we already are feeling the weight of. I believe we have already passed the point of having more public employees than private as also the annual earnings on average are greater coming from the public sector. I believe there are still opportunities in the health field and technology, but other than that pickin’s are slim.

    My own experience with this issue concerns my 4 eldest daughters. They all (with the exception of one) completed 4 years of college with minimal student loan debt. The only difference that I could see as compared to others is that they were required by myself and my wife to work. They worked jobs before they left for college (in high school) and they also worked jobs (plural) while they were in college. They did not live at home. They were not given cars, they bought their own and also maintained them. I paid their insurance as long as they stayed in school. We, at times, gave them food and if they had a major problem, we helped them out with money, but it was rare. Subsequently they all graduated and have good jobs in the health care field. They have excellent work ethics, excellent credit, and wonderful husbands and children.

    It all starts in the home. There is way too much coddling going on out there with kids these days (strictly my opinion). They are graduating with no clue on how to get along out there in this big old world. No work ethic, no sense of responsibility when parents give them everything they want or desire. When does anyone have to “earn” what they get anymore? We’re even conditioned as adults that all we need to do is sit back and the “know all, do all” government will take care of us. We have a tendency to pass that on to our children. Just my opinion, but I feel that has helped create a nation of entitlements.
    IF our rights continue to erode in this once great nation of ours, and IF our economy is allowed to slide to the point of no longer being the world’s reserve currency and we have an economic collapse, then I would suggest concentrating on basic needs as far as education goes. Items such as basic health needs, holistic medicine, gardening, carpentry, plumbing, basic wiring, and again some background in technology will always be very helpful in our future.

    How do we solve our current issue of the cost of education? Throw more money at it? That answer always remind me of how we “help” 3rd world nations with their food, health, and housing issues. We send tons of money and sometimes some food, but it hardly ever gets to the people that really need it. Same with education. Throw money at a school and guess who gets to remodel their office and get new furniture. It ain’t the kids (or even the teachers). I know it’s an old saying and probably not “politically correct”, but these schools along with a lot of other companies, organizations, and government, have “too many chiefs and not enough indians”.

    My answer to the problem? Clean house!!!

    Enough said.

  27. Trader_Joe says:

    As a grandparent of 7 grandchildren, I would like to help each with paying for their college educations….however, if there is a chance that their college financial obligations may be magically erased (perhaps by the government) sometime in the future, perhaps I should use my spendable retirement egg for something else?

  28. martyn sinclair says:

    Read “the Creature from a jeckyll island” (a second look at the federal reserve system)…its all in there..the information is all out there as to why we are in such a mess ..trouble is no-ones listening…with the choice now between Romney or Obama there is NO HOPE now…either depression,hyperinflation, WW111 or a combination thereof.

    • John says:

      Are you the Dennis Miller from fox’s factor show? You are correct, everything is greed and corruption including a lot of the churches. IMO we loose, loose in the up coming elections either we get socialist Obama or Obama lite with the other choice.

  29. Sameer G says:

    HI Shah

    You have hit nail on head.It is almost similar to Housing loans [Subprime ] now this Eduactional loans going bad…
    One after another all types of loan or lure of profit in future will go bad.
    Its education mafia which is calling the shots.But people here have no option as such, in HOusing they atleast can declein being the muppet.In case of education it cant happen,
    Sorry State of affairs.


  30. Andrew says:

    In Italy, where I live, college educations are free, as is to a great extent, health care. I have never heard of anyone over here drowning in debt from a student loan. There are negatives to this socialized culture, true, but they seem to be outweighed by the pluses.

  31. Richard says:

    One of the next bubbles—SLM Holding Corp (SLM). Was called Sallie Mae and set up similar to Fannie Mae. And we all know the story about Fannie Mae and its bubble.
    Not only is SLM’s old Federal Family Education Loan Program portfolio drying up, but the origionation/maintence fees are dwlinding. Add to this the decline in private loan funding as the Government ramps up its own Federal loan programs to satisfy the ever increasing cost of education. Not a pretty picture for Sallie Mae down the road.

  32. John Ridings says:

    I am 65, retired, and have spent all my working life in the aircraft industry. Now, due to a critical shortage of mechanics in this S American country, I have been tempted out of retirement to do maintenance and start an overhaul workshop .
    There are almost no local mechanics suitably qualified or experienced – so maybe young Americans should look overseas for career opportunities – I did and it worked out well.

  33. Mom says:

    “6 years ago, my step daughter was given loans of over $600,000 to buy 2 – $300,000+ homes while her income was $30,000 per year”
    Given loans??
    You take on loans and you better use th atcollege education to understand and learn how to pay for them.
    I am shocked not you or anyone else advised her not to “accept” such a ridiculous amount of debt.

  34. Alan Wolin says:

    Forty two years ago, I failed to finish my Master’s degree. It always seemed to be”unfinished business” and completing it would have helped me go further in my career. Recently, I responded to a few internet advertisements for “grants” being given to new students. Unfortunately, those grants are not for graduate studies only undergraduate studies. Although I am semi-retired and working as a ski instructor, my career days are essentially over–I am 73. Why would I pay about $30,000 for an M.A. at this point in my life just to put the issue of “unfinished business” at rest? I would not pay that sum, and only thought about returning to school if a grant was available and most of the education was free. Oh, I can easily afford the $30,000, but I am not into wasting money. I can accumulate knowledge on my own, by reading, and for a lot less money. When I went to school and graduated college, tuition at the State University at Los Angeles was about $36. per unit, if my memory serves me correctly. Los Angeles City College where I earned an A.A. degree, before going on to earn my B.A. , while employed, was almost free.
    I do not believe a B.A. or B.S. is worth the cost today. I would recommend learning a trade and if one has a burning desire for higher education do it with a solid financial base, and the ability to always put food on the table with one’s trade.

    • bob s says:

      You state you could afford to get your masters but you won’t obtain it unless you get a grant or its free. Why should someone else(Grant) pay for it. Even if a grant was available don’t you think it should go to someone who needs it and would have a full life ahead so that the grant provided degree would benefit society.

  35. Tony says:

    I believe that all the previous commentators are from the US. It is just the same position in the UK although we are, it appears, a few years behind you,in other words it has not got that bad YET!
    I did not go to university,some of my school friends did and some did not.I qualified as a Chartered Accountant and I know a lot of accountants,some who did go to University and some who did not.Remember, this was when university was free (the sixties)
    Looking around my friends and colleagues inside and outside of my own profession are those who went to “uni” any better off?Answer no, I do not think so.
    Some professions may need a university degree to get started,eg medicine generally, scientific research, law possibly but outside of the professions it can be learned “on the job”.We have all been conned by the politicians seeking to prove how wonderful they are to super educate the proletariat.

  36. Joy Parker says:

    To start with, our elementry & high schools convince kids that they ALL should go to college and that they won’t be able to get any kind of a job without it. Their parents buy into it. Everyone has different talents, and if it isn’t “booklearnin” it isn’t appreciated. I think travel is one of the most educational things you can do, and will give you life skills that no college offers. College professors and administrators are greedy like the rest of us, and no one seems to have any controls over them. They also usually couldn’t make it in the “real world” with the brainwashing they’ve gotten.

  37. Richard Faircloth says:

    Wow! Right on! Corruption follows the evolution scam! What a surprise. Build an “educational” (i.e., indoctrination) system on the lie of evolution and the people of the system become lovers of money more than of the God of Creation.

  38. Cindi Harris says:

    I see this as similar to the housing bubble. “Everyone should own a home; Everyone should go to college”. Another example of the government pushing an agenda that is not best for all. Unfortunately, the “entitled” generation believes it deserves an education just for being in this world. There seems to be no regard for how it will be paid. Many of us as parents contributed greatly to this belief as well as we wanted our children to have more than we did without having to do the hard work to get it. Unfortunately, this may lead to an unraveling of the very foundation on which our country was built. The more who believe the government should be responsible for paying for college, the bigger the government will become as this up and coming generation votes away the freedoms of our nation we have fought so fiercely to protect.

  39. Tom Stiebler says:

    The obvious solution for the debt enslavement part is to change the law to allow discharge in bankruptcy. Let the racketeers eat the loss.

    As for reforming the education system, perhaps a partial solution is for college professors to be required to do some teaching, rather than spending all their time raking in big bucks as consultants while raking in more bucks as ‘educators’ and costing more bucks to hire grad students to do the teaching for them. Other than that we should look to see what works both in the USA and abroad.

  40. Ralph says:

    Any time the federal government provides cheap money (student loans) for a product or service (education) there’s always someone devising a business plan with the goal of lining their pockets. John Sperling’s Apollo Group, consisting of the University of Phoenix and subsidiaries, is a prime example. They incentivized their recruiters to get as many students in the door financed by easy money, including people who had no business going to college.

    Sperling remains fabulously wealthy while the taxpayers assume the bad debt.

  41. David George says:

    Get Government out of edcuation totally. Let the free market determine edcuational costs and let universities and colleges compete for the best students who will be the only ones qualifying for loans in the private sector. Obama wants to give everyone a free ride and Romney must bring some sensibility back to this problem. No one deserves a free ride unless they can qualifiy for scholarships (academic or athletic) that provide for that.

    Attending college is a privilege that should only be extended to those willing to work for that privilege and even then only in academic areas that are required in the free market. Only these students should be granted loan approval. Does this mean if I want to take music I won’t get a loan? Yes. I’ll have to find another way to pay for it like I did once before and it’s called working your way through college. I’ll venture to say that under this system everyone graduating from college would find employment or create it for themselves and others.

  42. Doris Kelsey says:

    There are a lot of things wrong with our education system. Mainly, it is too centralized, the parents have lost control and leave it up the the ‘professionals’. We have been conned into believing someone with letters behind their name is more knowledgable than us. I come from the ‘old school’. There were 14 kids in my school, all eight grades of us. One grade had 5 kids and three in another, some grades did not exist. Our parents WERE the school board. THEY interviewed and hired the teacher. The county sent music and art teachers around to each of the schools so we got that one day a week. Discipline mainly consisted of settling arguements between siblings. We had some say in our routine. We VOTED as to wheather we got a spring vacation or got off a week earlier for the summer. I’d like to see some school allow that now! And we learned the difference between their, there and they’re. I got most of my education in that school. No one was bussed. Some of the first graders walked two miles in the snow with no sidewalks. The teacher did her lesson plans while we were out to recess. We carried in our drinking water and walked the path to the restrooms.
    My sister counted 90 kids on her block in Milwaukee, enough to full a six room school. Instead of having a school on the block, they were bussed to a big school where most of the kids were strangers. An environment conducive to the spread of TB and other life threating diseases. Bussing is costly, polluting, wastes time and prevents kids from exercising. It takes the schools out of the hands of the parents and the neighbors.
    My great nephew was lucky to receive a great public school education in Madison, Wisconsin. He went into the Marines in part because of the GI bill. He lucked out and got a promotion to drill sargeant. This allowed him to start his higher education while employed by the military. He ORDERED his troops to attend his classes. This gave him a head start on his higher education most military don’t get. After discharge he married so as to get the higher pay and, with a job on the side, was able to finish his undergraduate work. With the degree obtained, he divorced (it was a marriage for the money), and moved to the east coast where MIT is paying him to attend. He is the ONLY ex-service member at the school that was not a commissioned officer. HE says the GI bill is a sham. If your family is not rich enough to send you to college before millitary service, you have little chance of getting an advanced degree. Indeed, you are lucky to get any degree.
    What to do- make the schools smaller, MUCH smaller. Keep them in the community, NO bussing. Get rid of the cost at the top-superintendants etc. Make college free, like it is in other third world countries. OK they still have to pay for their food, housing and books, but no tuition. I think I got a pretty good education and my tuition was $119/semester as a full time student. That translates into $703.55 today, not the thousands kids are being charged, and most don’t seem to recognise the word “they’re”.

  43. Jay Curtis, author of THE CODE says:

    Well, there is no easy answer. Students were duped into borrowing for schools that charged outrageous fees and tuition and that provided only mediocre classes. Because they worked on commission and the schools had no admittance requirements whatsoever, so many innocents were duped and now stuck with outrageous interest payments and no educational value for their money. It is almost identical to the mortgage bubble, where loans were government guaranteed, commission originators made big loans to bad credit risks and the pyramid collapsed.

    Bailouts are not a good thing generally, but if we can bail out the big banks who cheated our students on these loans, we surely can help out honest students who were duped by these unscrupulous lenders. Put a tax on the banks to pay for their greed, put a transaction fee on wall street trades on margin (too much speculation that destroyed our economy in 2008). Congress needs to grow a pair and identify the culprits and then make them pay for the results of their greed.

    • Niru says:

      I grew up in Sri Lanka where we had free education, but you had to qualify to get into university. Resources were limited, so the major faculties like Engineering, Science, Medicine and Dentistry had really high entrance requirements. That seems a reasonable way to go about it. Students pay with effort instead of money to get an education.

      And boy, did we work hard. Because in the 3rd world, the number of jobs offering reasonable remuneration is limited due the underdeveloped nature of the economy.

      In the first world with a mature economy, there are other opportunities in the technical world that also provide reasonable jobs.

      But the main criteria should be to train for a job that allows independence.

      • D. Keene says:


        You touched on a subject that has become absolutely irrelevant in the USA, namely responsibility and achievement based on one’s own merit.

        Student loans are the same as liars-loans in real estate. You don’t need to show any aptitude in any subject, just sign your name on a student loan application. Our government has decreed that “everyone should have an education” regardless of whether the education. Yes, it’s irresponsible of the student and irresponsible of the loaner. But isn’t that exactly what government promotes these days? Total irresponsibility?

        How to solve the problem? Discharge student loans if the student declares bankruptcy. That will make the loaners (both schools and governments) scurry like rats to make sure students are capable of completing the education and are capable of repaying the loan. (That’s called responsible capitalism.)

        To my knowledge there is nothing in the founding documents that promised anything beyond life, liberty and the pursuit of happiness. Not a word about guaranteed happiness, free lunches, free tuition, free loans, etc.

        But Obama and company are out there buying votes like crazy. Free everything for everyone (his voters) except for the wealthy and responsible. Make them pay for the Obama’s irresponsible “gifts” from the government.

        How sick this nation has become! And in such a short period of time!

  44. Guy says:

    Yep, saw that here too. I went back to college at 40 to get a master’s in information science back in 1991, and it got obvious – to me, at least – that every professor in the department and the administration were first worried about the dep’t budget and preventing reductions, all the while “producing” probably twice as many graduates as the market could absorb. And the banks? We had 200,000 students in the street recentlyin Montreal demonstrating against tutition fees increases, The gov’t offers more loans, through banks of course. Sum of it all is that banks get more and more control, all the time…

  45. H. Craig Bradley says:


    People need to recognize our financial and political system is broken, that is, not likely to be fixable in its current form. Does anyone have a new template? Neither political party has a solution, just the same old (grand) party platforms (cut and spend, or spend and tax). Pick your poison. Its over.

    Anemic economic growth (now we are bragging about 2% GDP annual growth and calling it a “recovery”.) Gimme a break !! The American middle class is shrinking, as measured in real dollar value of assets and income. Who are these crackers fooling?

    Sure, high single digit economic growth exists in emerging markets such as Chile, Singapore, Hong Kong, Mongolia, Brazil, but not in the United States anymore. Overseas, its a small government taking a small slice of an expanding pie.

    In Western Democracies its the opposite: a huge indebted Federal government taking a bigger slice of a shrinking pie. That’s why “education” beyond a two year community college (occupational certificate program) is really just a powerful waste of money and time. It won’t payoff for most aspirants. Don’t try to be a professional basketball player or movie star either, the odds are not much worse.

    The best shot today’s young people have in America is to migrate away to those countries with the best business opportunities for them and the optimism that accompanies it. Either that, or start your own small service business (“one man band”).

    At home, its ALL “Gloom & Doom” or else its “HIgh Hopes” by reelecting hope-in-chief President Barack Huessin Obama (Bwana). Recent disclosures state the President’s income in 2011 was $875,000 ( a 1% ‘er). Is that helping you? Doubtful. Can you eat his campaign rhetoric? Good luck with that.

    • Gomer says:

      “Recent disclosures state the President’s income in 2011 was $875,000 ( a 1% ‘er)”

      Ya think that has anything to do with his approval of the 30% tax on those making over a million?????????

      What a joke!!!

    • Jim says:

      The President makes a fraction of what Romney makes, and he has not yet disclosed his recent tax return. At least, the President wants to raise taxes on himself. Romney is out to protect the rich and has a vested interest in doing so. We have had student loans for a long time, and some have used them responsibly and some have not. I would have not been able to go to college without one, and I have paid mine off long ago. If individuals cannot use them responsibly then let’s put a ceiling on them and leave to schools to offer more scholarships.

      • Tom Carey says:

        What does Romeney’s and Obama’s income have to do with education. Your thoughts sound like an Obama tool. Both of these guys are on the same boat and it is only the naive who think there is a real difference between the two.
        Seek solutions and quit being a follower.. Lemmings and Wildebeests follow each other right off the cliff. Haven’t you figured it out following anyone is natures cruel joke on the intellectually challenged.

  46. Navin Ajmera says:

    Here’s the irony. Those who complain the most about government spending (education, home, new technology R&D funding…..) are the ones who benefit the most from that deficit government spending). Think who made money from the mortgage and now pending education loan debacles. It’s rarely people who took out the loans but mostly who provided the loan with government’s backing. Those who clamor for more government spending are just debtor hands from which money quickly passes to those who invest ( while loudly complaining about wasteful govt. spending!) in what the money is being spent on. The debt eventually ends up on the government’s tab which it finances by issuing bonds which these same investors buy and sell making even more money. The system is rigged and broken for most average Americans (Europeans, Chines, Indians….). No clue how it all will eventually play out. But for those who have money there is a chance to make even more.

  47. Mike Carey says:

    It is hard to cover all that needs to be discussed on this subject. First, most students today do not have the study skills to succeed in college. Secondly, most do not have the math skills to succeed that are required in most fields. Thirdly, most colleges are almost requiring students to take five years instead of four years to get the first degree. The first degree does not open many doors these days.

    My daughter is now in graduate school. Her present loans total $52,000. To obtain a masters will take two years. I have multiple masters and a mid-to-PhD college designation. I am a very strong proponent of graduating with a college degree. Presently, I am bolstering my business and I will be adding several more degrees. Some steps for me will cost only $3000 and one or two $30,000 and another about $80,000 in college only fees.

    One of my student loans with Bank of America ended up with an interest rate above 24% and was totally enforceable by the IRS. Not being able to write off student loans with a bankruptcy is a curious penalty. But, I am aware that banks practically control every aspect of a person’s life financially. I am fearful for the students who did not have the academic where-with-all to succeed that have been trapped into wasteful borrowing. And as we adjust to a near-depression economy, I am also fearful for most students who do not get a master’s degree or a technical degree in a field with some employment demand.

    Debt puts a tremendous strain on anyone’s budget and the mental drag can be enormous. No one that I know of is really getting a free ride. I believe we will have a much better future in ten to twelve years. A good education is not something that anyone can take from you. It is going to take tremendous fortitude to tough out the immediate future. To stay optimistic, small positive steps will build confidence. Learning good money management skills which include consistent saving and reducing debt to pay for consumption is one such step. Really getting all you can out of your education is another—read and study for mastery well beyond the narrow requirements of each class. Be willing to burn the candle at both ends. If possible, work towards being self-employed. The opportunities can be limited only by your imagination. Associate with like-minded individuals. Be realistic but skip the nightly news and focus on your goals.

  48. Tony Waters says:

    I have to agree with Doris Kelsey, in particular, the use of the three words there, their and they’re. Somehow the expensive public school systems have failed at the fundamental level. Small class sizing in local schools would allow for students to understand the meanings of word usage such as the above three mentioned. Why is this important? Adults must be able to express themselves with the written word correctly or said adults will not be taken seriously in work and in their life. It is too bad that such a small error in education could reduce a worker’s income, but it will do that. Another one is the usage of too, to and two, The error that this trio of words produces is also common with even university educated students misusing them. Best Regards, CanadaNorth

  49. Henry Shea says:

    Forget about being a high paid lawyer or doctor, if they are not in demand! See what are in demand, get one of those job is better than nothing. 🙂

  50. Pete_K says:

    I am not American, but I think the US Constitution is a wonderful document.

    It specificlly separates church and state, restricts federal authority, and bank authority.

    It pushes authority for many many of the most important things out onto the people – that’s you.

    It is neither right wing nor left wing it is people oriented plain and simple and a wonderful attempt to change the old status quo.

    That much we all have in common regardless of race, religion, or creed.

    Enforcing the Constitution would resolve many if not all of these problems.

    Neither you nor I have any real “Representation” in our governments.

  51. Naved says:

    Your article makes cash based and underground economies look better than our capitalist system. I would be curious to know if the Indians in India are smiling with their low cost education system. India is now producing more doctors and engineer,s than any other country. The question is which model is a more economically viable educational system, India or USA ?

    Till now the US has been able to put a man on the moon , in the Air , on the Road and many other things like apple google facebook Internet and the list goes on….. May be our system does work , well until your article….

    • BH says:

      “Cash based and underground economies” are, by definition, capitalist free markets. The economy of the US, to an increasing degree, is not. In particular, the US “education economy” and “medical economy”, as many other writers here have pointed out, are so heavily influenced by government regulations and special treatment that those who receive the benefits generally do not directly pay for them, and thus there is no brake on increasing costs.

  52. Robert says:

    Debt kills. Going into debt for “Banker Bailouts” (Banker Welfare) kills. Going into more debt for banker derivatives kills worse. Going into more debt for Private Federal Reserve Bank to Private Banker “Interest Rate Swaps” kills worse. More debt, for Quantative Easing” (INFLATION) kills worse. “Too big to Fail” failed. The RACKET has failed. REINSTATE the Glass-SteaGall Act. REINSTATE the Glass-SteaGall Act. Congressman Walter Jones has started an Impeachment of Obama. Probably won’t get far, most of congress is as corrupt as Obama, but a Public Impeachment, an “Occupy Impeachment” would do some good. Agenda 21 style Land Grabs are going on across America. They need to be stopped in their tracks. The best way to preserve the Constitution, go into rotting areas of inner city decay, NY, LA, Chicago, Detroit, etc, pulverize the decay, and create farms, ranches, and outdoor use tracts of land. This would create a spirit of self-government. You’d have to be EXTERMELY Alert to Agenda 21, Corporate, Federal, State, County, and City Government Land Grabs. America today is an insidious combination of Banking(debt slave), Corporate, and Government CONTROL. This CONTROL needs to be de-constructed.

  53. J Hall says:

    There is a lot wrong with higher education. Every university has to have the same majors as all others even if here are only a handful of student majors. State supported universities should discontinue this.

    Every university has added and added to administrators and their employees that were not needed in the past. They have social roles rather than academic ones and could be done without to save money, but they keep expanding to be all things to all people. They keep spending on sports as well and pay scholarships to students for sports.

    They can raise costs every year as the federal government keeps raising the amount of loans that they give. If they stopped making loans so available, universities could not keep raising tuition and fees.

  54. Martin says:

    Yes a racket. Why? Because the whole system of government has become a racket, in which rather than serving the public, the political and economic establishment thinks up ways of using and controlling the public to serve itself. Enslavement with debt using any means available, including education, which should be free in a true democracy (read your Plato and Aristotle) is an easy route to control. False propaganda in every direction is another.

    New Constituition please. Articles to include:
    1. All new laws must be explained to the electorate in terms of the social and especially the moral imperatives that lie behind them, as well as their benefits to society. They will then be scrutinised by the Senate, its members rarely politicians but suitably qualified independents, such as: emeritus professors of moral philosophy, emeritus professors of constitutional law, church and other religious leaders (represented in proportion to their following in our society).

    2. Old laws still in force must be subjected to scrutiny every four years by Committees of the Senate (as appointed above) to ensure that they continue to serve the public according to the imperatives of moral law (as no.1 above). If found wanting they are to be redrafted and returned to the House of Representatives.


  55. Gary says:

    What ever happened to phonics,penmanship, math flash cards, in class spelling bees, teacher appreciation day,
    the PTA, parent teacher conferences.
    These were the good old days of actual learning by students who were taught the basics.

  56. spreadoption says:

    Thank you, Shah. You’ve put your finger on yet another bubble that will burst – or rather, explode – sooner or later. Like healthcare (and housing before it), the education industry will spiral up and out-of-control until we eventually recognize that it’s unsustainable and actually in a death-spiral.

    Education is the means to an end, but there is no end here. There are no jobs and, given the idiocy of our government, there aren’t going to be for a very long time.

    America’s fundamental problem is that for thirty years we have been taught that government is the enemy. It is not. Government is us…for us. We are fast becoming a nation where it’s every man for himself (oh, and bring along the women and children too, if you can) as we denounce regulation while focusing on financial engineering and warfare. What America needs is a new strategy geared toward growth and innovation. How about working to benefit mankind? That’s high aspiration with tons and tons of jobs behind it.

    Free markets, whether in housing or education or finance, must have regulation. Imagine Giants-Patriots with pages torn out of the rule book and the referees standing around on the sideline. A free-for-all league descends into chaos and is soon out of business. Fortunately for the NFL, its commissioner displays his profound love of the game by insisting on tight regulation and constant oversight of every aspect of the game.

    America, on the other hand, has no such leadership.

    • BH says:

      In education and medicine, regulation isn’t the solution, it is the problem.

      Why aren’t student loans discharged by bankruptcy like other loans? If they were, the problem would go away. Those making loans would be concerned with the actual ability of the borrower to repay the loans, and thus, with the actual value of the education being paid for. Government grants and other programs to pay for higher education also break the connection between the student and responsibility for payment. How many students (or their parents) sit down and really calculate the cost/benefit ratio of educational alternatives?

    • Tom Carey says:

      John Stossel on Fox Business channel explored these ideas and more before the Shah. I am glad he is waking people up, but he is not the originator of this message. The real dialog should be how do we address this and other govt inadequacies and the answer is simple. We must get directly involved and demand the change we know to be necessary. Work with journalists to do exposes and find organizations which have causes to enlighten and change, like Common Cause.

  57. James says:

    I am from canada. I was a g high school dropout during the sixties.However,
    Ii had very little trouble getting jobs without a High school deploma and in spite of the fact that many have made fortunes without a High school deploma, I attempted to formalize my love of macro-economics by attending university as a mature student until the place I worked at closed its doors and I was unemployed at the age of 57. I at length acquired my High school deploma but I came to the conclusion that the only reason I did so was social pressure. Our society tends to alienate people on the grounds that they are lesser because they do not have a High School deploma but that is all B.S. for it plays on people’s insecurity. I have finally come to the conslusion that the education system is not selling education at all but status and prestige. However , there is nothing prestigeous about being a graduate of some institution of higher learning if you cannot get a job and you are loaded down by debt and slavery. Gerald celente from the Trends Journal calls them degrees in worhlessness!

  58. Tom McNamara says:

    I am eternally grateful that I was born in time to benefit from the “old” educational system. I did not realize it at the time, but my high school education was better than most university graduates of present day.
    I had scholarships, because we had to study to get ahead. Now students are being allowed to advance without effort and told they are doing great, even though they are learning nothing. No History, Geography, basic finance, etc.
    The University system is broken and should be scrapped. Like most of our country they have lost sight of their reason for existence.
    Greed and egos have taken over, as they have most of our institutions and our Government has failed us all miserably.

  59. Hollis Wagenstein says:

    The only thing missing from your compelling article is METRICS. It would make your thesis even more compelling if we knew, for example, what percentage of trade school/college grads failed to find jobs in their field within a year after graduation, the average student loan correlated with average starting salary in different categories, etc. These stats may not be readily available, and those that are available may be out of scope for your blog (but might have been summarized and referenced with a URL for the truly hardcore seeker!) We need to know what our tax dollars and our personal dollars are paying for, and we need to know if we are being scammed by the education system and its collaborators.

  60. Gene says:

    When I decided I needed a college degree to move from an hourly job to a technical or management position in 1963 I took a night shift job and enrolled in a state school “full time” (I took 5 years to get a 4 year degree). In the 70’s I made a deal with each of my 4 kids to make a partnership of their educations. I paid for tuition and books and fees while they paid for their own room and board. I think since they each had skin in the game it helped make them better students. Now they each have a degree from a well respected school and two of them picked up advanced degrees on their own. This was before the government was so involved in education. The government loan guarantees cover the banks. It’s all gravy for the banks while the schools keep raising costs and encourage people to borrow money. “It’s the best investment you will ever make” they say. Whenever the government gets heavily involved in anything the costs go haywire. People jump in to suck up that federal money. I think the worst offenders are those many bogus schools with phoney degrees and certificates which train people for jobs that don’t exist while the big universities keep raising costs and paying fat salaries. A college degree has become so common it has lost it’s value. Today a college degree will not guarantee a job while a skilled auto mechanic can make a good living.

  61. BH says:

    Another part of the problem is the widespread propaganda by the education industry. When calculating the advantage of a particular degree on lifetime earnings, they fail to subtract out the earnings lost during the years in school, as well as the delay in years experience lost during the years in school. They also fail to recognize that you pay for education (at the time or when you pay off your loan) in post-tax dollars, but they measure the benefit of education as if the increase in lifetime income was tax free.

  62. Diane Bohl says:

    We have indebted our country beyond our ability to pay back our loans from China and other countries who are not our friends. Unless we do some drastic steps to get out of our debts, by lowering all Public employees salaries, cutting unnecessary government positions, starting with the First Ladies Enterouge which is obscenely beyond double the previous First Ladies, and firing the Czars President Obama has positioned to control our agencies and killing the Obama Healthcare Bill. The Obama Healthcare bill has a section setup to give the right for Obama to hire “Henchman” to control the people and report back directly to President Obama. Sounds like the how Hitler controlled Germany! Guess that is why no one was allowed to read that Healthcare bill before they passed it. Our country is going to HELL in a handbasket, unless we demand that President Obama attend the Court Hearings on the Validity of His supposed U.S. Birth Certificate. He is just ignoring our courts and we are going to let him get away with it. He thinks he is above the law. Are we going to let him get away with it or demand that he start obeying our laws, instead of trying to find ways to get around the U.S. constitution and change it.????

  63. Kevin Donnelly says:

    Education is all about communication. We have the means at our disposal to video every lecture needed for Engineers, Teachers, Scientists, Social studies etc . The “schools” are so full of endowments and building programs for years into the future and are “hoarding” resources rather than going digital where students, can learn at home, or locally, from materials which are much more up-dateable on the web than in the classroom.Why has the digital revolution not brought down the cost of education, as it has reduced the costs of production elsewhere?

  64. Lucinda says:

    I am a “victim” of this atrocity and it seems that it is not going to better, because of the thought processes of ‘capitalism’. e can deny it or override it, but knowing that there is a huge gap between the percentage of the rich and poor, contributes to the overall demise of the U.S. financial and banking systems. The rich gets richer and the poor continues to struggle from paycheck to unemployment check and so on.
    My daughter will be graduating in May 2012, with a BS in Public Administration and I’m terrified at the fact that the job market, is not sustainable enough for her to find employment in her field. God save us and sustain us through these trials and tribulations of this world.

  65. Bruce Rae says:

    Well, the problem in the USA is the same in a lot of western countries. Most big companies in any country make a large percentage of revenue from direct or indirect (as in the case of student loans) government support. A few years ago, the government in New Zealand allowed every pre-school child 20 hours free kindergarten care and education per week, and the early childhood education market has boomed. Likewise, with the student loan policies for youths and adults. The tertiary institutions now market themselves aggressively to grab these subsidies and loans. The policies are well-intended, but many of the institutions are just out to get as many “bums on seats” as possible, and offer programmes that students want. Some have legitimate connections to businesses and industries, but most don’t. Many years ago, students got such sponsorship based on learning skills and knowledge that were targeted towards specific jobs such as teaching, accountancy, engineering and so forth. If you didn’t spend time working in those jobs after you qualified, you had to pay back your sponsorship. In New Zealand, this idea was given up on the assumption that the “market” knows best and is more responsive than some centralised direction. I’m never quite sure who the market is in these cases, apart from those who are good at seeing a new opportunity to make more money. So, in our domestic education markets, we all have a major problem; but for exploitation and irrelevant education, you should look at what we offer international students.

  66. J.W. Gardner says:

    I agree A racket….WHAT I see,, including Polaticans,, Education did not make them any smarter,, or we would not have A Debt…Education makes them think they should have every thing with out working for it…All.people…I am 71yrs..
    Self employed,, haven’t had A debt since 1981….I also don’t over spend….
    It makes me DAMM mad their was enough in this country for every one with ou much debt….Now they ruined it for everyone including them selves…Does Romey think if things go broke he won’t ,, he will be right along with everyone else……J. W. Gardner

    • Malcolm says:

      JW – thank God there are still people like you left with some common sense. The idiots who run your country including wannabee Romney as well as the great Obumma think that wealth is created out of thin air. it is created by people like you who get out there and DO things and MAKE things.

      The US has all but stopped doing that which is why the US economy is going down the toilet fast and China is about to blow past you as the worlds biggest and most powerful economy. You need to elect people who know how wealth is created. I pity you guys having to choose between two complete idiots for your next President – not that we are much better off with the boneheads that run Canada.

      But thanks for the common sense sir – it ain’t very common any more.


  67. Maylene Clearwater says:

    I graduated with an MSW degree from a state college in 1995 at age 48. And with student loans of approx $25,000. I have an AA Degree in Business 1979, as well, that I paid for myself attending full time at a community college while working at min wage 40 hours a week and caring for a young son & husband. But a bachelors and Masters were beyond our ability to pay for alone.

    I have never been late on a payment. I never looked for free. I just expected that the terms of the loan were above board

    17 years later I am still paying the min payment and am down to about $4000. They said the interest rate was 8%. But for many years 1/2 that payment each month went to interest. Sallie Mae. I really think that is considerably more than 8% annually and equates to usuary.

    I am ticked at the interest rate deception. I brought this up to the state’s attorney and was told nothing could be done about it. I am a firm believer in buyer beware. So I continue to pay because I am a responsible person. I didn’t do due diligence about the real interest rate. And there are consequences good or bad to all our choices.

    I wonder if other students are in the same boat. I have compassion for 18 year olds swimming with the sharks.

    When the interest rates dropped for student loans a few years ago I was not able to consolidate and lower the payments because I had only one loan.
    I will retire next year, instead of this year. I will pay off the loan soon, as I am finally in a position to do so. My education has been both financially and personally good to me. Although I knew Licensed Clinical Social Workers make very little compared to other professions requiring the same college years for credentials and a license in the mental health care field. All I needed was a roof over my head and food on the table. And a profession I enjoy. And I got that and a little more.
    I chose to change positions in the middle of my life because I couldn’t put food on the table at min. wage and have not regretted the decision to obtain the necessary credentials for a career I had wanted since high school. At least I chose an accredited college at a reasonable rate. Plus I took time off from work to study. I finished my Bachelors in 9 months and my Masters in 2 years with a 3.95 GPA.

    I don’t think that education is the problem. “It’s the economy, stupid” said a president of the US. There was a time when there were jobs available to graduates of higher education. Until we get there again students should vote with their Dollars and not attend those high priced schools.

    By the way, Many of those technical schools and high priced private colleges “degrees” aren’t worth the paper they are written on when it comes time to present credentials to employers. They’re not accredited. I’m wondering what % of the outstanding loans are to students of those institutions.

    Why are loans available for those scams? Maylene Don’t look for logic. There isn’t any. It’s the greed of the schools feeding at the government trough. And the Government that is handing out money hand over fist without any fiscal responsibility.

  68. Ray Hussong says:

    I am President of a non-profit volunteer organization called, Dollars for Scholars. We have 28 volunteers on our board of directors. Each one of us work countless hours each yr. to raise money to give away as scholarships for our high school graduating seniors. This yr. we have 203 graduates that applied for a scholarship from us, and we are going to give out 102 scholarships. We will be giving away $50,000. with $350. being the smallest award, up to $1000. being the largest. As I stand before a crowd of 300 graduates, parents, board members and donors to present these awards I am embarrassed to give a $350. scholarship to kid, knowing that it won’t even pay for his/her books for one semester. (The books are another rip-off, like the college pres. and professor’s wages) What else can I do, we are only capable of raising X amount of money each yr. and we give it all away, only to begin again the following yr. We do have an endowment fund going that provides us with approx. $5000. per yr. in dividends/interest that we also use.
    What else can we do? Most companies won’t hire the young people if they don’t have that piece of parchment paper.

  69. eric taylor says:

    We had more college educated people than jobs before we hollowed out
    our domestic content economy to the communist third world. I am not against
    education, but I agree loudly, that we need to match higher education and job training to worth while jobs. Being educated in the humanities, and the arts
    and crafts does enrich the quality of life in many ways and makes for a
    better informed citizen, but it is too bad we have such a big disconnect
    between the more highly educated citizenry and a U.S. government
    that has moved more closely to Oligarchy than toward true participatory

  70. Don says:

    UNCHECKED FRAUD, in my view, is the root cause of all troubles in the U.S. People are allowed to mislead and misrepresent by leaving out relevant information on a wide range of issues. This is fraud when the information is known and the then used or shared.

    Our national culture has a severe loss of genuine integrity. To some degree of success, the Security and Exchange Commission applies this basic principle to those presenting investment opportunities. We have allowed political action committees, politicians, business people and educational institutions to not be truthful for so long that considerable structural damage has been done, including how our Executive and Congressional branches of government misrepresent the truth by manipulating economic data such that the true picture is now grossly distorted. The data and reports provided can longer be used for citizens to make well informed decisions, but most do not know this fact. So, citizens make bad choices based upon bad data and misleading information provided by our government supported by businesses that gain for this. We need to get back to honest and fiscally responsible governance of our federal and state governments as the first priority above any political agenda. If we don’t have the money, then political agenda desires should be made to wait until we do.

    Also, we need to stop the lack of accountability by blaming negative outcomes on unintended consequences when the knowledge in a subject/field existed to be used. Not using the available knowledge and effort to thorough evaluate should be treated as professional malpractice with severe penalties due to the harm done to our citizens.

    Our political situation has become Too Powerful to not be corrupted. We need an equal power entity of our government that serves to prevent and prosecute fraudulent conduct by business and politicians.

  71. R. Aronson says:

    “What do we have to do about where we’re headed as a nation that needs better education facilities at more affordable prices?”

    Get the government out of the education loan business. This the main reason for the high cost of higher education. In the past, I’ve seen charts that show the relationship (from memory).

    As a corollary, look at housing: When the gov’t intervenes with its agencies (Fannie, Freddie, etc.), people are enticed to borrow, and this triggers the greed factor for for any related business, eventually causing a bubble.

    The bad news is that our economy is predicated upon ever expanding credit/debt. Why do you think Benny-and-the-Print-Machine have interest rates near zero (ZIRP) – to entice people to borrow to enable spending. So, there is zero chance that we can get gov’t out of education loans, as citizens today expect the gov’t to solve our problems, when it is the gov’t that causes the problem (unintended consequences).

  72. Shirley Wilkie says:

    The administrations of the colleges are very arrogant, they say noone complains and they have more students than they can take so will just keep raising tuition. If parents were smart, they would all boycott colleges and let their kids work a couple years. The only way the colleges will cut back their
    tuition is if they don’t have enough students to pay their professors. This would have an added benefit of the students being more mature and knowing what they want to do instead of playing around. If parents are not willing to do anything to stop the spiralling cost of education then I can’t feel sorry for them. Parents also should look into the courses being offered by some of the colleges. Some are so ridiculous you have to wonder who thought them up, also some are very anti-American.

  73. Malcolm says:

    Well of course it is a rip off. So don’t get ripped off. Do your due diligence. Ask where the jobs are that are promised. Ask for the names of people who have got jobs. Ask for a guarantee – if they are so confident that you will get a job make sure you get all your money back if you don’t (of course no-one will do that so therefore do NOT sign up). Find out what skills ARE in demand. Ask Ask and Ask again. If you get garbage answers you are probably going into a garbage course.

    Besides which guys there is NO SUCH THING AS A GOOD JOB. No body I know ever made a million by working for someone else. Work for yourself then the only person who can fire you is you.

    Take care and do not get sucked into these education schemes they are not worth the paper they are written on and their job is to make them money – not you.


  74. Just Jane says:

    Shah- not only is higher education a racket; additionally, consider the increasing and never ending costs to the taxpayers as most universities operate as non- profit tax- exempt facilities. Many have historically obtained land through eminent domain and donations yet pay no property tax ! Double & triple whami to all!

  75. Michael B. says:

    Even for those students paying off their debt, the game is rigged. The interest is fixed just so each monthly payment pays pennies off principal. And even when a student pursues a perceived area of need, such as nursing, upon graduation one finds a glut of other nursing graduates competing for not so many jobs. In other words the universities enrolled and graduated too many in their nursing programs. Thus matching higher education to job training also may be a pipe dream.

    • Rick Yearout says:

      Totally get that. Got saddled with a $10,000 college loan our son deferred
      interest on for 3 years. Our agreement was he was to pay his way each month. He went to the Marine Corps and we never saw him again. Still have no clue where he is. Being the co-signer I got shocked with a loan bill for over $18,000 so I just paid it off to get out from under it.
      Imagine it being a $40,000 school loan ballooning to $72,000 or higher.
      How the heck do Mom and Dad deal with that surprise other than others have mentioned above “mortgage your home” which is devalued by 50% in some cases. Holy #%@!
      Even if the student gets a $20 hour job it would take a life time to pay it off.

  76. Paul M. says:

    Tom Steibler has it absolutely right. Make student loan debt dischargeable in bankruptcy and the predatory lending will stop. Wall Street lobbyists wrote the bankruptcy reform law in the first place.

  77. Alan Wolin says:

    Second comment.

    If education were like any other commodity, they would have priced themselves out of the market. The increased costs for tuition over the last ten years are huge (I do not have the exact figures, but remember reading them and they are significant).

    Because of all the advertisements and the accepted mantra touting education as a means to making more more money and finding and holding a better career job, students and parents are fooled about the benefits of earning an undergraduate degree.

    Unless the education is specific, e.g.,engineering, accounting, medicine, law, etc, there is no guaranteed job at the end of the study, nor will there likely be any jobs for many years. There may not be jobs for those with accounting, engineering, etc training either. We have eliminated many manufacturing jobs by allowing companies to re-locate overseas without any penalty for moving the jobs out of our country. The idea that “service jobs” have replaced manufacturing and production type jobs says it all. Until we again become a major manufacturing center, in the world, we can forget about having a solid employment base.

    Corruption and greed are evident everywhere. Look at the latest GSA scandal. Most of those managers were earning high salaries and still found it necessary to defraud the government or allow the fraud to continue. This guy Neeley, a senior executive, most likely earning a very high salary, is accused and allegedly found it necessary to remove government property—an I Pad for his personal use. The other high salaried person, a director, overstayed by nine days, at government expense, when he traveled there for a one day ribbon cutting ceremony. It seems like there is never a saturation point, and that there is never enough money or toys for some people. This accepted mentality of “get everything you can get away with” has been with mankind since the beginning. There are exceptions, but one has to search for them.

    I agree with the earlier comment that Professors are pampered and do not do their educational job. The idea that they are above teaching undergraduates and allow graduate students to do the teaching prevents them from sharing their wisdom and expertise with budding students. If they want to do research exclusively, then maybe they should not be affiliated with the university, but instead be working in a research facility at a private company without tenure.

  78. Benton H Marder says:

    This whole thing is a demonstration of Barnum’s Law and the W C Fields Corollary. Students take on debt for practically worthless degrees. A fine example was seen during the ‘Occupation’ protests. A young man had incurred some $150 G of debt for a degree in Gender Studies or the like. He was also paying for a new car. He was also paying on three child support orders. Could this be satire? Possibly so. But, it represents an extraordinary degree of irresponsibility, which seems quite common nowadays among our ‘gilded youth’, our ”little sons of the rich’. Many cannot think of marriage until they pay down their debt. They cannot think of having children until they pay down their debt. They cannot think of retirement until they pay down their ever increasing debt. One factor and another just adds up. They can’t invest until they free up cash by paying down their debt. They’re all, male and female, so far down the River Tick that they’re far out to sea. This is the future, folks. Discharge in bankruptcy? What of the depositors, the savers, the shareholders? Why should their money go down the rathole of irresponsibility? We all really need to grow up and use some common sense.

  79. Jack Mudry says:

    Looking at the comments in this column you can see two disturbing trends clearly. First, after years in college, many college graduates still can’t spell or write. Second, the graduates who have written comments here still can’t distinguish political propaganda from reality,e.g., throwing around the word “socialist” as if the United States is, or has ever been, “socialist.” This is nonsense. Private business interests, many of them oligopolistic, control most of the US economy. If you want a more precise term to describe the United States economy, how about “crony capitalism?” Thank you.

  80. Gary says:

    A young man I know very well went to a trade school out of state. He was a troubled kid. In a short time they told him he would never make it in the class and he was dismissed. But apparently the student loan was not. This was in the mid 1980s. He later ended up in a large US city where he was picked up one day walking on the freeway. He told the officers that picked him up that God told him to do what he was doing. He was sent to a mental health facility where he was diagnosed with schizophrenia. He is doing better than he was then but he is permanently disabled and gets SSI. Somehow a collection agency caught up with him and attached his SSI payments. After he told me this I found that there is a waiver for people who are permanently disabled. I sent him the forms and he and his doctor filled out. Even with that these people are calling him and trying to convince him to pay the loan anyway and are dragging their feet in terminating the attachment. He barely gets enough money to live on and has no way to add to his income. It is as if he is being punished for being ill. All this for a school that dismissed him early in the program and he received absolutely nothing for the money that the school got on his behalf. He didn’t even know the loan was still outstanding until the collection agency caught up to him 26 years later! So, yeah, I guess you could say it’s a racket.

  81. David says:

    The kid across the street was like 8 years old when we moved in. After he graduated high school he went to school to learn to become an auto mechanic. Now he owes $40 grand and he’s all of 21. Pardon my french, but that’s bull****.

  82. M. B. Wong says:

    Get money(lobbyist) out of politics! Sure way to fix at least some of the problems. One has to wonder how on earth do other countries elect their government officials without millions and millions of dollars or whatever their currency happens to be.

  83. bob says:

    I like Shah’s idea of getting involved. To fix any of the problems mentioned would require an honest state legislature, state governor, federal house of representatives, federal senate, and US president. Man…..that’s a tall order. And on top of that; they would have to have the interest of their respective state or the country ahead of their own or their party. Now it sounds really impossible. And maybe it is. But I think it’s worth a try. So how do we change it?

    The country seems ready to join movements. The best examples being the “Tea Party” and “Occupy Wallstreet”. The tea party lost their way, and occupy wallstreet never seemed to actually have an agenda other than to vent frustration. Most Americans are basically pretty centrist in their views. They’re not really represented by either the republicans or democrats whose bases are extreme right or extreme left respectively. This is why there are more and more Americans identifying themselves as independants. Unfortunately, these extreme bases are the people that get to choose who the rest of us get to vote for. When’s the last time you didn’t feel like you were voting for the lesser of two evils. The solution would be to change the parties bases. We need to start a moderate, centrist minded movement. No, we wouldn’t need to be out in the steets demonstrating and getting arrested. Better that we spend our time working to be able to pay our bills. What we would need to do is join one of the two parties. Doesn’t matter which one. If you’re left of center join the democrats; right of center,join the republicans. The idea is to get moderate people nominated for the governing bodies. People that could compromise and move this country forward in a positive manner. Who knows, we might even get people in there that would be willing to remove the corruption from our political system. To accomplish this, we’d need to get a big enough movement to move the bases of both parties closer to the center We could call the movement “Party Up America” or “Occupy Washington”. What do you think Shah?

  84. Gord S. says:

    Your children need to be taught how to learn and how to get the best education for the dollar spent. Then convince them that they need to pay for it with cash, get off your butt and work at anything to make money and don’t spend it on drinking and cars and junk that does not make a career.
    If they don’t have an income then it does not make sense to borrow money. If you work and pay for your education you will learn alot more about what it takes to succeed.
    You spoil your kids rotten then convince them that the country owes them a great lifestyle. The stupid parents that have spent their whole career trying to keep up with their neighbors have failed miserably at teaching their kids! Then they tell their kids to get a loan and support them when they don’t make their payments! What exactly can go well with their life after that? Good luck if that trend continues! Next they will get a 400K house loan with a 5k downpayment and a 30k/year income, hey that should work!
    So now we blame “the system”. It failed us! It must be someone else’s problem because I am educated and so smart! It can’t be my problem! I think that I will go out and hold up a placard and yell at the stupid people for a while! Hey that should make things better!
    Maybe you should live within your means and teach your kids what it really takes to succeed then instill in them some good morals and then repay your dam loans!
    The system will always take as much as it can, nothing really wrong with that, but it is wrong to let it drown you in debt.
    The system will change when they are forced to, not when the money keeps coming in from every country in the world.
    You can’t stop people or institutions from being greedy.

  85. David Bacorn says:

    I agree with nearly everything the article
    says about the overpriced “educational
    racket” that has unfortunately befallen
    our Nation and its College-aged citizens.
    One thing that is clear to me, however, is
    that competition is the lifeblood of progress and change. And in the educational arena, just as it is universally found elsewhere within our capitalistic system, novel ways
    will arise that “leap-frog” time-tired ones.

    What is education all about anyway? Is is
    supposed to turn-out a “Master Class?” Or is
    it supposed to result in highly skilled, well
    informed, worthwhile, learned, intelligent,
    decent, respectable, capable, graduates who
    want nothing more than to stay in the United
    States as uplifting individuals qualified to
    certainly make a “valuable contribution to our society.” The present Educational set-up,
    or “Industrial Collegiate and Banking Complex” if you prefer to call it such, is smug enough to see itself as ‘The’ self-
    evident, one and only, indispensable ‘Way’
    from unknowing to knowledgeable. But, in the long run, Nature does not love a virtual monopoly well enough to let it endure forevermore. These proud ancient goliaths will find their natural pride of little comfort someday on account of a better and more logical way that sweeps them aside like veritable chaff routed by the irresistable, strong, modern, inevitable winds of change.

  86. Lee E. [Doc] Franklin says:

    Benjamin Franklin was my Uncle 8 generations back, the Eastern earthquakes being him rolling over in his grave over this “Education Scam”, improverishing our young people [among other National Issues]!

    “The Vanishing Act”! Accounting for “Student Loans” seems very tricky: Expensive “College Educations” are the most important ” “Investment” they’ve ever made……….when they sign up for them. After Graduation, it’s the reverse! “Education is assigned not only zero value on Graduates’ Balance Sheets; But now affords students “Negative Net Worth” in many cases, disqualifying them for New Business Startup Loans under current
    Bank Examiner rules. Such a deal! Who’s kidding who?

    Education should be assigned a value; Banks can’t have it both ways! They should also give hiring preference to their “Clients”, as well as using their business-wide contacts to assist in placing Graduates in paying positions within their spheres of influence. A win/win which also strengthens the Banks’ positions and loan portfolios. Maybe a Vice President could win a promotion for thinking of it…………..after all,…….”A Trillion saved is a Trillion Earned!”

  87. Tom Carey says:

    Amazing how many of these comments are regurgitating the premise of the article. Valid as the comments and article are, the greatness and the promise of America is to solve problems. Only babies cry and whine. Adults fix Problems. I know no one wants to hear this, but it is the truth.

  88. ML Paddock says:

    Sounds like an entitlement guru talking. We are talking LOANS here. Inherent in the concept of a loan is that it must be paid back. Do you understand that students are provided a contract when they borrow money for school? Perhaps if they did their due diligence about a field they seek employment in and READ the student loan contract prior to spending the money they may understand these loans are not free money, cannot be forgiven and the degree pursued may not result in employment. What ever happened to the notion of personal responsibility? Millions of people have done this successfully. Why should these responsible graduates, taxpayers and investors pay for the others? Additionally, when in college students will learn through internships, co-op, observations and other required coursework what the state of employment is in the real world they seek to work in. Why not transfer to another field or stop borrowing as soon as you learn there will not be a job in the field of choice? In most cases it takes years to earn a degree. How long does one have to study a field to figure out there are few employment opportunities?
    It is simple really, if you borrow money for ANYTHING it is your duty to figure out what your return on your investment will be ahead of time and to pay back all debt you incur.

    • Dave says:

      Well said and I agree wholeheartedly.

      Added note. we as a country need to figure a way to make the federal legislators personally responsible for evry tax dollar they spend. I feel that this would end many of the problems we have with our government.

  89. chris95 says:

    Thank You Shah for your insights for this event. I have never looked at higher education like this. I only remember one of my family members who went for higher education and got quite a decent job in IBM. I always thought higher education was a key to success in the society. Good information you have provided there. Also, I would like to take this chance to tell you that I love reading your articles. Keep It Up!


  90. Steve says:

    Your article is right on. I have been saying this same thing for a while now. What ever happened to on the job training. I have friends who are high up in their career field who started at the bottom and worked their way up. On woman I know started off as a teller at National City and worked her way up to an executive position with no college. I would have to imagine that she is way more qualified for her job than some kid with no experience fresh out of college. I use to be a union carpenter, I went through a four year apprenticeship with on the job training. This was a great way to get an education without student loans hanging over my head. I later became a partner in a commercial construction company and loved being in business for myself . A couple of years into it my little brother was killed when a semi driver went into his lane and caused a head on collision. The construction company was a dream of ours together and I didn’t want to do it without him. I sold my stake in the company and moved on. I became a mortgage broker, I found a great mentor who is one of the good guys in the mortgage business. I am a self motivated learner so that helps. I received a nice settlement from my wrongful death lawsuit and decided to quit doing mortgages (which was a hurting business) and go back to school. I could not believe what I experienced. I attended a small technical college for business management. It was a joke! The class was an accelerated program, so it was fast paced and suppose to be more difficult than the normal college structure. I actually quit buying books at one point and would just borrow other students book to get the homework questions from. The only people who dropped out or failed were students who didn’t want to put any effort into the class and most of them were younger students. It seems as though they weren’t equipped with self motivation. The college also said that they offered life experience credits. This ended up not being all together true. They did offer them but it was almost impossible to get them. I tried to get them for several classes and was denied. One class that I tried to get LEC for was project management. I had been a project manager for ten years and was denied LEC for intro to project management. I actually enjoyed the class because of the instructor but it too was a joke, a $400 dollar joke. I wasn’t the only one who was denied and many of the other students felt the same as I did. I did go on to graduate but only because I wanted to finish what I started. I know it may seem like I was rambling but it does all tie in together. I had two very different jobs in my 17 years after high school. Both of these jobs I received on the job training from great mentors, I got paid to learn and was productive member of society, I have no student loans to weigh down my income, and I have the life experience to succeed. This seems to be more important than a piece of paper telling me that I should be able to do a job. Now don’t get me wrong college does have its place, I don’t want a self taught surgeon doing my heart bypass but there seem to be too many college grads waiting tables and doing jobs that don’t take higher education. I am convinced that most of the classes could be done away with now thanks to GOOGLE.
    Keep up the good fight!

  91. Maureen O'Connell says:

    A horror movie should be made about student loans. My son is at least $70,000 in debt to the AI of Pittsburgh. He graduated in 2007 and guess what? NO JOB!! I can’t even tell you how many times he complained about the teachers, how bad some of them were, how they didn’t teach certain programs telling the students they “weren’t needed” and how all the companies he applied to said “yes, they are”. I could go on and on but you get the picture. He has even looked into a class action lawsuit against the school, but is having a hard time finding other students willing to go out on a limb and back him up. Any recommendations as to action that can be taken to get this debt monkey off his back, and expose the hypocrisy of these institutions, will be most gratefully accepted.

  92. Tom says:

    I don’t see any comments on the complicity of business in the “education scam”. How many businesses (including the one I work for) REQUIRE a college degree for work that can be performed by a high school graduate (many times with the skills of an 8th grade graduate).

    Businesses are using the degree as a filtering tool that says someone is better than someone else because the managed to graduate from a university.

    Come on business leaders! Make the job requirements fair so that the requirements match the job. Entry level jobs which typically are paid near minimum wage should NEVER require a college degree.

    The only way the escalation of college tuition will end is when the average person doesn’t NEED a diploma to start work and then has time to further their education while working and will choose courses and a degree in areas that a) they are interested in and b) are hiring.

  93. Energy PE says:

    Clearly most higher education is not worth the cost. Unless you need a certain degree as a legal requirement for your chosen profession, you are probably better off going straight into business, or doing some low budget world travel to find opportunities.

    Prices will come down when the students quit signing up for slavery.

  94. fallingman says:

    Well, I guess you touched a nerve.

    Yeah, it’s a colossal scam.

    As Frank Zappa said, “If you wanna get laid, go to college. If you want to get an education, go to the library.”

    Today, anybody with a cheap computer and internet access has the world of knowledge literally at their fingertips, and yet they leap at the chance to indenture themselves for life for the privilege of going through an over-hyped “educational” experience that, in most cases, isn’t worth much in terms of knowledge gained or employment opportunities created.

    It’s pathetic. The government promoted this nonsense. They want us to be to be virtual serfs.

    I say get a real education and screw the system.

  95. Joseph Dasovic says:

    Since the big 6 banks control both political parties I.e. the Dodd-Frank bill, how do you propose to stop it?

  96. Ian S says:

    It is a competitive world.

    First a reply to the respondents from Poland and Italy who say that in those countries Higher Education is free. It is not of course. What happens there is the student himself does not pay, but a tax is levied on everybody – including those who did not partake of Higher Education – to pay the salaries etc of the University staff. It is generally better to have the people who consume a service pay its full economic cost, and leave those who don’t consume it free to spend their money elsewhere.

    What we are hearing now in the USA from graduates looking at the starting salaries and the debts they now have is “It is not worth what I have paid.” And it won’t be for 80% of those participating. Only the cleverest 10% of the population truly benefit from higher education.

    Here in UK when I was at University in 1970 only 10% of my age group qualified to get in. Then in the 1990’s our government decided that 50% of the country’s young people should attend unversity. The expansion in higher education provided for the next 40% ability range, so of course the average competence of a graduate declined. The average graduate salary declined with it. Employers were not fooled, and basically only pay good money to students who qualify from the Universities which existed prior to the boom – that is the old top ten percent again.

    My message to USA students is. Ask yourself are you in the top 10% of ability of your age group. If you can honestly answer yes then aim for a top course at a sought after college. If you get it you should get a job that enables you to repay your outlay. If you answer no – then you are likely to be conned and spend your working life regretting it.

    Here in the UK – as somebody already said – we are maybe a decade behind the US in the student loans bubble. But I do not see a different outcome here.

  97. Alan Noblitt says:


    You are right on. I voiced a similar opinion in my blog last June at I’d be interested in your thoughts on that piece.

    Clearly, the federal government is in too deep, and society needs to evaluate the return on investment for a college education. For doctors, accountants, lawyers, etc., that shiny diploma is a necessity. For others, there are better ways. The for-profit colleges are out of control and need to be reigned in as priority one.

    Excellent article. Thank you.

  98. Tom Hegarty says:

    I always get a new insight from reading Shah !
    One little point about the 1.1 trillion borrowed by the european banks. That money never went anywhere useful, it went straight back into the ECB in their individual accounts and just sits there !
    Ontop of which those banks are LOSING money on the interest arrangements ! Ever heard of a bank deliberately losing money ?
    It is being done because when the deep and smelly hits the fan, they aren’t sure that they can cover their individual debts.
    Enough said !
    Last point, so many of the things said by many on here are reflected accurately here in the UK. Spooky or what ?

  99. Janet Norco says:

    Did you you know that the Junior Colleges in Stanislaus and San Joaquin County Junior Colleges are filled with parolees ( who need a second chance ) and welfare recipients who need a chance, that most classes are so full that the middle class youngster can not get the classes he/she needs to move upward. It is all about the head count only. It is no longer about education and potential. Did you know that some of those socialist countries in Europe do not have any where the welfare programs that the US has. The workers in the misguided European Countries have it really good, but they have to be working.
    I lived overseas. .

  100. Kyle says:

    After working twenty years in finance and pretty disgusted with the vipers behind the bank crashes, as well as the attitudes of finance managers, who would stick it to anyone in order to increase their bottom line by .1% and show what a good manager they are, I returned to community college to get a trade-school degree in HVAC. I studied hard, did well and enjoyed the coursework. But there are just no jobs, and while I know that part of the problem is that some have a harder time seeing an older man working in the construction/maintenance field; it’s just tough all around. Aside from the difficulty of securing capital for small businesses and finding the “placement training” that will qualify the prospective graduate for a real job, businesses are trying to run so lean that customer service sucks and accountability is non-existent. The attitude is to sell it, sell it; then take the money and run, let someone else deal with it. I don’t know how you change that. It’s tragid, what has happened to this country.

    • Paul says:

      I agree 100% with you!! I worked in the banking sector for 3 years, and it was all about selling accounts, selling credit cards, and selling everything else.
      Customer service didn’t matter, and I would get long discussions if I ever tried to help a customer without selling something…

      As for education.. I did my BA, and after finally leaving the bank I had to go back to school because I couldn’t afford to pay my loans. So this is a deeper hole I was doing to myself – taking student loans so that I can defer the current loans I have.

      I have a feeling that to get a good job you have to know someone who knows someone who can push you inside the company. Otherwise, good luck.

  101. steve says:

    I have observed this getting worse over many years…
    Too many of my school friends spent so much on tuitions (and did the time) only to discover later that their selected field was not right for them. My own higher education major proved far from adequate in the real world of business and I am convinced that working experience is more valuable than a diploma. I have hired a number of classic MBA’s and have been somewhat disappointed in their abilities without actual experience. Most other parents express how un-parent like I must be to think this way about higher education but my kids need to know that a diploma is just part of what will be needed from them to succeed. The business community should offer more “learning opportunities” for our young adults to try-out careers before they go off to universities. I do believe that education is important but experience rules.

  102. John from Colorado says:

    My goal is to have my 15 year old son get out of college debt free. He is an academic and does very well in school. A higher education is still very important, however, it’s harder to justify the costs with what market payscales jurisdict.
    It’s infuriates me to read the statistics regarding the debt students come out of higher education with, and the reasons for the debt. They are starting out in servitude as it were. And these costs are inflationary? When’s the last time you got a 6% to 10% raise?
    So, what could be a solution? There are of course many ways parents can be creative on an individual level. It has also been suggested that the same reasons we have had our housing bubble, and the creation of trillions of dollars of notional value of derivitives, are to blame. Perhaps if a supply and demand situation were created. Perhaps if easy money was not as easy to lend colleges may less expensive…..Less borrowing, less students, less revenue for the colleges, lower costs for the masses.
    It couldn’t be that simple? Could it?

    • ML says:

      Indeed navigating the minefield of financing higher education is one of the greatest challenges of our time. Rest assured a college degree without debt is possible. I myself finished my education in the mid 90’s with a PhD. I say this only to point out that it can be done and without borrowing money. I did it by working all the way through the process. I firmly believe that debt is a self emposed prison. If your son has the intelligence, stick-to-it capabilities and seeks employment in a field that has opportunity in the forseeable future then consider this. (I can only speak from personal experience).
      My 21 year old son is in his third year at a great university. He has remaind debt free by living at home and working while attending school. While it will take an extra year or so for him to graduate, he will be debt free, have a bit of $ in savings and will still HAVE A JOB.
      If your child truly needs a college education to find work in their field of choice (medicine, education, engineering, accounting, architecture, law etc.) and has a strong grade point average encourage him to seek employment at any level in that field. Often employers will pay a portion of tuition for employees to attend school/training programs. AND there is a level of respect that comes from employers for the individual who worked their way through college. Most importantly, conduct your own due diligence to ascertain what the growth opportunities are in a field of choice PRIOR to attending. Your son may need to adjust his sights a bit however in the long run this in and of itself will limit wasted class time, emotional strain and debtors “prison” so many graduates face.

  103. Navin says:

    Having three college age kids – one just out of college, one a junior in college and one just finishing up high school – I had the ‘good fortune’ of seeing the good, bad, ugly and coyote ugly of the college scene in America. The Good – we have so many universities, colleges, community colleges, trade and technical colleges offering studies in just about everything under the sun. The Bad – how these institutions of learning ‘market’ themselves to students and parents with glossy brochures appealing to their emotions and aspirations without connecting to the reality of work life after college. The Ugly – unjustifiably high cost of tuition (up an average of 12 % a year), books($15-150 for paperbacks), supplies, housing and so on. Professors more interested in research and publishing then teaching. Humongous class sizes (100-300 per class), bureaucracy and waste that add to the cost and frustration. The Coyote Ugly – hogs (college administrators, publishers, technology, products and service suppliers and yes students themselves) at the trough sucking up trillions of dollars churned out by government grants, govt. backed student loans, private loans, second mortgages, home equity loans Coverdale and 529 plans, endowments … and demanding more and more.
    Conclusion – throwing more money at these pigs through expanding govt. grants and cheap loans will just exacerbate the problem. Just like healthcare in America. Students, parents, state and federal govt., lenders should demand that colleges bring costs under control while improving education at the same time so that graduating students can actually come out of college with skills that helps them get and do a better job at work which is why they are going to college in the first place.

  104. PT says:

    The people who are good at maths stopped going to uni when they realised it didn’t add up. The people who were less than 100% naive stopped going to uni when they realized it involved signing an open, one-sided contract that involved trusting either government or banks to do the right thing.

    Who are our new engineers? Not the people who are good at maths.

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