Monday, November 20, 2006

Young people struggle to deal with kiss of debt

Student loan debt has become a serious problem.

Interesting read from USA Today (without any graphs or charts!).

OF COURSE student loan debt has risen. The government made it so anyone can borrow money for school. For that primary reason, colleges and universities have skyrocketed their tuition and fees because students being able to come up with the money is no longer a problem - they can just borrow it. And the schools facilitate the borrowing through their Financial Aid departments. They don't care where the money comes from because they know they're getting paid regardless. They are taking advantage of students desperate for that degree and, especially those advanced degrees (which you are pretty much required to "get ahead," nowadays). The education the students are getting isn't worth what it was in the previous generation because everyone now has a degree, so the job market is diluted with applicants. That's why overall income has declined.

The big time loans ($100k+) get paid off in 20 or 30 years, meaning that the lenders will get their money back nearly two fold. It's like having a house payment, without a house!