The bubble is definitely real. I was in college 20 years ago and the return on investment has been cut in half. My specific example -
- Graduated in 1995 from Public U. Total tuition - $16k. Started at XYZ company doing specific job N, making $32k. So my starting salary was 2x my total tuition.
- Current graduates from Public U. Total tuition - $52k. Now this tuition increase in and of itself is fine...assuming the you get the return on the back end. But you don't. Current starting salary at XYZ company doing specific job N is about $50-$55k, or 1x total tuition. In other words, your return on your tuition dollar is cut in half.
This is all driven by the subsidization of student lending by the feds. If there is an entity (in this case, the federal govt) lending money to 1) people who wouldnt normally qualify (no creditor would lend $100k to a person studying womens studies when the ave salary is $20k coming out) and 2) lending at a below market interest rate, the only rational decision by the colleges is to increase the price. Why? Because everyone can "afford it" courtesy of these idiotic loans. Same thing happened in housing, home prices went up because everyone "qualified" so there was no market clearing price.
So what's the upshot? I dont see the feds getting out of the student lending business anytime soon, so it will only get worse. Instead of pulling out, they will most likely double down by changing the bankruptcy code to allow student debtors off the hook. All paid for by the US tax payer.![[Image: american.gif]](http://www.rooshvforum.network/images/smilies/new/american.gif)
Gotta run, going to tinker on my motor this afternoon...
- Graduated in 1995 from Public U. Total tuition - $16k. Started at XYZ company doing specific job N, making $32k. So my starting salary was 2x my total tuition.
- Current graduates from Public U. Total tuition - $52k. Now this tuition increase in and of itself is fine...assuming the you get the return on the back end. But you don't. Current starting salary at XYZ company doing specific job N is about $50-$55k, or 1x total tuition. In other words, your return on your tuition dollar is cut in half.
This is all driven by the subsidization of student lending by the feds. If there is an entity (in this case, the federal govt) lending money to 1) people who wouldnt normally qualify (no creditor would lend $100k to a person studying womens studies when the ave salary is $20k coming out) and 2) lending at a below market interest rate, the only rational decision by the colleges is to increase the price. Why? Because everyone can "afford it" courtesy of these idiotic loans. Same thing happened in housing, home prices went up because everyone "qualified" so there was no market clearing price.
So what's the upshot? I dont see the feds getting out of the student lending business anytime soon, so it will only get worse. Instead of pulling out, they will most likely double down by changing the bankruptcy code to allow student debtors off the hook. All paid for by the US tax payer.
Gotta run, going to tinker on my motor this afternoon...