Debt

Slaves

The Great College Loan Swindle

How universities, banks and the government turned student debt into America's next financial black hole

Horror stories about student debt are nothing new. But this school year marks a considerable worsening of a tale that ought to have been a national emergency years ago. The government in charge of regulating this mess is now filled with predatory monsters who have extensive ties to the exploitative for-profit education industry – from Donald Trump himself to Education Secretary Betsy DeVos, who sets much of the federal loan policy, to Julian Schmoke, onetime dean of the infamous DeVry University, whom Trump appointed to police fraud in education. 

Americans don't understand the student-loan crisis because they've been trained to view the issue in terms of a series of separate, unrelated problems. They will read in one place that as of the summer of 2017, a record 8.5 million Americans are in default on their student debt, with about $1.3 trillion in loans still outstanding. 

In another place, voters will read that the cost of higher education is skyrocketing, soaring in a seemingly market-defying arc that for nearly a decade now has run almost double the rate of inflation. Tuition for a halfway decent school now frequently surpasses $50,000 a year. How, the average newsreader wonders, can any child not born in a yacht afford to go to school these days?

Everybody wins in this madness, except students. Even though many of the loans are originated by the state, most of them are serviced by private or quasi-private companies like Navient – which until 2014 was the student-loan arm of Sallie Mae – or Nelnet, companies that reported a combined profit of around $1 billion last year (the U.S. government made a profit of $1.6 billion in 2016!). Debt-collector companies like Performant (which generated $141.4 million in revenues; the family of Betsy DeVos is a major investor), and most particularly the colleges and universities, get to prey on the desperation and terror of parents and young people, and in the process rake in vast sums virtually without fear of market consequence.

DYI:

How to drop the cost of college substantially?  Simple solution but almost impossible politically.  End all student loans, grants and subsidies.  I guarantee the cost of higher education will drop like a rock thrown into the ocean.  If the Universities/Colleges attempt to hold their elevated tuition costs the number of students attending will plunge, so much so, bankruptcy in some form will transpire for State or private colleges.  Tuition will drop; schools will have to reorganize; cost will go back to the days where a student with a part time job and a little help from Mom and Dad will graduate debt free.  Why?  Basic economics.  You cannot charge more than what your customer can pay UNLESS they take down debt!  The big bankers scam how to turn multiple generations into debt slaves.      

DYI