Friday, January 18, 2019

Why is there more than a trillion dollars of student debt?

How is it possible for college tuition to increase every year at a time when we have almost no inflation and GDP growth of less than 2%, based on the economic numbers you are led to believe ? In reality, tuition fees are rising because the government guarantees student loans and creates this bubble. Because so many people have been led to believe that going to university was the path to a successful future and career, they would spend almost anything to go to university. It 's amazing how much people will spend when they use someone else' s money.

What is really unfortunate is that we do not teach college economics to a sufficient degree, and we barely teach it in high school. Most kids who graduate from high school know how to read and write, they can also do basic math, but very few of them can legitimately balance a checkbook or exercise bookkeeping . This is a real problem. The worst is when these kids grow up and work for the government. Apparently, our graduates are not the only ones balancing their books. Our own federal government spends more than $ 1 trillion a year on taxes. I really hate to mention this because I do not even like that buzzword, but it's just; unsustainable!

If children arrive with money as a student loan to enroll in the university, the demand will remain very strong. Because the demand is high, colleges can ask for more money, and they do. In addition, they pay teachers too much and offer them incredible pensions and benefits, including health care. The accumulation of all costs related to the inheritance puts our colleges and universities on the same footing as the many municipalities and governments that are near bankruptcy.

What happened was that we burst a huge bubble in the university industrial complex. Rather than face the challenges and problems that lie ahead, we are not honest with economic realities. The Obama administration wants to raise taxes and continue to offer this strange and unsustainable way forward. If children who are currently out of college do not find work, then sending more kids to college and raising tuition seems like a bad idea for those who stop going to school. ;think it.

Apparently, no one is, while default rates exceeded 9% in 2012 before surrendering to God, but do not know where or how high. And so, the dilemma of $ 1 trillion student loans will present a pop of epic proportions that are not so different from the 2008 housing crisis, fortunately it will only be in one sector, even if it is very important: education.

It is amazing that the Obama administration is not tackling this problem or doing anything to fix it. It does not work, and the problem only worsens. Indeed, I hope that you will consider all this and that you will think about it.

No comments:

Post a Comment