Exposed, The Student Loan Trap

In today’s fast paced world of high finance where profits are all that matter it is not surprising that institutions of higher learning have now joined the rank and file wall street consortium. The surge of for profit universities has more than doubled just within the past few years and with it student loan debt has reached the highest level in the history of the US. Never before have institutions of higher learning been so profit oriented. Just imagine tuition at Harvard University 100 years ago cost a whopping $150 and many state schools charged nothing at all. Now, when we look at the consumer price index from the past 100 years there has been a 2,263% rise since 1915 in the cost of everything we buy. College tuition on the other hand, the price index has risen by over 43,000% since 1915. That alone should be a real wake up call for all educators, the public and all elected officials. This increase is just tuition costs never mind room and board, books, and all the other incidentals associated with campus living.

One of the most concerning facts about the ever increasing amount of student loan debt are the many smaller more specialized for profit universities that have taken over the TV adds lately. It is pretty obvious when so many of these for profit schools emphatically state in their recruitment practices that they offer students a much better chance and practically guarantee employment upon successful completion of course requirements. With the US economy still in an economic quandary what employment opportunities there are too many times these students will not land a qualified job with the salary to match their ability to repay all the student loans that have been added just to complete their course requirements. It is as though these schools are deceiving students, their parents, and even grandparents by offering incentives attached to degrees in specialized fields using their own financial network knowing full well that there is still a very little chance these students will ever be able to repay all the costs incurred.

One of the most influential factors in college recruitment practices especially among career advisors, guidance counselors, school officials, and college recruiters today claim that by going to college it is an investment in your future. Today, it is more like speculation of a future that really isn’t that secure. What they don’t tell even though tuition may seem high today the student loans incurred by going to their school may never be fully be paid off. With so little actual good paying jobs in these specialized fields that future is marred by enormous debt from all the student loans that have piled up. It is just like the Housing Crisis when financial institutions coerced people to take on the seemingly unimaginable costs in mortgages in the hopes that they will in the future be able to pay the balance on their mortgage. But, in reality those future costs became insurmountable. The same thing is happening with student loan practices today.

Never before in American history has this nation been so immersed in debt. Whether it is Auto loans, home mortgages, credit cards and now student loans have all amassed trillions of dollars of debt that too many will never be able to repay. With this holiday season already upon us credit card debt is already sky high and is getting higher all the time. Just this past week on Cyber Monday 93% of sales were all debt transactions. Credit or debt financing has taken hold of our whole economy. When we add student loan debt combined with all the mortgage foreclosures that have befallen millions of Americans since 2008 the United States is being crushed by the massive weight of colossal debt. Yet, there are unscrupulous institutions, and individuals who continue to reap billions of dollars capitalizing on others indebtedness. Just this past year the Federal Government reaped over $42 billion in profit from all the student loans that they issued..

It has been known for quite some time now, thought grossly under reported that college students have been inundated with massive student loan debt. For years now that debt has only set the stage for an economic and financial disaster. All too often it is the for profit universities that have lured prospective students using false pretenses into thinking that by attending their school you will in fact be better prepared to actually get hired by businesses that would utilize your specific educational background. Today, what these for profit schools do is unconscionable. They purposely are luring students into large student loans knowing full well they have no intention of following through on what they advertise. It is a fact that the more a student gets in loans whether it is through a financial institution or from the school itself like DeVry, which uses it’s own financial management company that underwrites their students loans, these institutions continue to make huge profits.

Call it what you will private for profit institutions of higher learning continue fleecing students and parents alike by the sheer volume of loans offered by the Universities in conjunction with the Federal Government. Today, the total amount of student loan debt in the United States is over $1.3 trillion. To think that a college education had always been a gateway to an occupation to ones chosen field and the promise that their occupation would provide the means for a standard of living much better had they not attended and got that degree. Sad to say those days are long gone.

There maybe a bright spot on the horizon where student loan debtors may very well be on the verge with a new ability to have these loans discharged. The biggest reason today is the fact that students all over the country are being duped. For years now students and their parents have been literally on the hook for massive student loan debt. Without some sort of ability to discharge these loans students and parents will never be able to pay them back. As it stands today thousands are immersed not only in massive debt but their entire lives continue to be adversely affected. Instead of contributing to a growing economy too many will in fact be a burden upon society. And, that will do absolutely nothing to generate economic growth, stability and prosperity for our communities and our country.

The biggest problem today with the enormous debt associated with student loans is that financial institutions that provide these loans are now bundling them together and then selling them just like the they did and continue to do with home mortgages. Like 2008 when the housing bubble broke the same thing is going to happen with student loan debt. What is so tragic is that these financial institutions as well as the Federal Government continue to reap billions of dollars in profits every year. The best way to address this growing crisis is with legislation that is being proposed by Senator Bernie Sanders. And if it comes to pass that free college tuition for anyone who qualifies to attend it just maybe the best way to advert a financial disaster.

Source by Dr. Tim G Williams

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