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Student Debt: A Needless Burden, Yet Widespread

Written by Gary North on February 4, 2013

No liberal arts student needs to pay more than $15,000 to earn an accredited bachelor’s degree. That’s about $10.50 a day. Working at a fast food restaurant part time will pay for this. But parents send their children into the debt swamp, even dipping into their retirement savings to pay for this. Even with help from parents, the average college graduate leaves college with $25,000 of debt — and half who begin do not graduate.

The U.S. government subsidizes this disaster.

Under the Student Aid and Fiscal Responsibility Act (SAFRA) signed into law as part of ObamaCare in March of 2010, students may borrow money directly from the federal government regardless of their credit score or any other financial “issues” they may be facing. They are not priced according to any “individualized measure of risk” nor are there loan limits. They are instead politically determined by Congress with undergraduates receiving lower interest rates than graduate students, but graduate students allowed to borrow more than undergrads.

Once in the debt trap, the student is locked in by federal law. Student loans are not discharged by bankruptcy. These loans are exempt from protection.

College costs are rising because of federal intervention. “Since 2000, tuition at public, four-year colleges has risen by an inflation-adjusted 72 percent, and over the past 25 years it has increased at an annual rate 6 percentage points higher than the cost of living.

Loan default rates are increasing. They are close to 15% of the $1 trillion in outstanding college debt. But the debts do not go away. The debtors’ credit ratings plummets. They cannot borrow to buy homes.

Anyone who marries one of these victims co-signs the note until it is paid off.

Anyone who gets romantically involved had better run a credit check on the other person before pursuing this. The lobster trap is big enough for two people.

Continue Reading on www.thenewamerican.com

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3 thoughts on “Student Debt: A Needless Burden, Yet Widespread

  1. John Cooksey says:

    Very good post Gary. I know a person who just went back to school for another degree and more loans, after four years, just to derfer paying on the first loan! If you go bankrupt you still owe this debt and the government will take it out of your social security when you are 65 if you still haven't paid it. They are already starting to do this with some people who had debt and are now seniors. I shutter to think how much worse it will become in the years ahead. 30 years ago no kid 18-22 had massive debt. Now with credit cards and student loans, industries have been to steal the future of these kids.

  2. 37% of employed U.S. college graduates (5 million) are in jobs that the Bureau of Labor Statistics (BLS) suggests requires less than a four-year college education. 32.2% of police officers, 24.6% of retail sales people, 23.5% of amusement / recreation attendants, 18% of firefighters, 18% of telemarketers, 16.8% of secretaries / administrative assistants, 17.6% of office clerks, 16.5% of bartenders, 15.4 % of taxi drivers, 14.5% of counter clerks and 12.9% of parking lot attendants have college degrees. The cost of their college education is not justified. 30% of people 25 and older have college degrees. There are insufficient jobs in the U.S. that require the college degrees that people have attained. The 2nd, 3rd, 4th and 6th occupations projected to have the largest growth in jobs between 2010 and 2020 require less than a high school education. newsandopinions dot net

  3. First of all, people who incur this type of debt are no use to any company… don't hire them as they provide no value and obviously have poor judgement. You can check their credit reports.
    Secondly, forcing this debt on taxpayers should be criminal. If the grads want to force this onto others, don't hire them… they lack the integrity to function in business.
    My old college wants donations (and why not… everyone is looking for a handout). They must be kidding. If you price yourself out of the market, then go bankrupt or cut salaries. Perhaps they can ask the college debt crowd for more money that they don't have. I won't sent one red cent until they can become responsible with their own funds.
    Besides, I am not funding any more liberal propaganda centers…