Mark Cuban Warns of Crash that will Kill America’s Colleges
After years of subsidizing loans for students, the United States federal government has succeeded in raising college tuition costs to astronomical figures and formed another “bubble” that is bound to pop eventually. The government has been providing loans to individuals likely to never be able to pay their loans back.
What’s going to happen next? Entrepreneur and billionaire Mark Cuban had this to say:
“College tuition’s have exploded because of easy money guaranteed by Sallie Mae. So, if any student can borrow more and more money, and it’s guaranteed by the federal government, why wouldn’t the colleges take it all?
The problem is that bubble has led to over a trillion dollars in student loan debt, which is having a significant impact on the economy and it’s really holding us back in the economy’s ability to grow. It’s holding back housing, it’s holding back apartment building, it’s holding back car sales, it’s holding back clothing sales… anything that’s not an absolute necessity, kids can’t spend their money on.
That’s a real problem for the economy and I think that bubble is going to burst. I think it’s inevitable at some point there will be a cap on student loan guarantees and when that happens you’re going to see a repeat of what we saw in the housing market when easy credit for buying or flipping a house disappeared. We saw a collapse in the price of housing and we’re going to see the same collapse in the price of student tuition and that’s going to lead to colleges going out of business.”
College education is big business, and with easy Federal loans, prices for everything from tuition to text books is going through the roof. Once degreed, the majority of college grads are ill-equipped to handle the current marketplace. Many of those who entered college just five years ago simply can’t find work in a 21st century economy that’s imploding on all sides. What college grads are left with are massive loans that can’t be repaid and a room in mom and dad’s basement.
At one time, college was an investment. Today, it’s become indentured servitude.
For parents and teens looking at colleges, we suggest taking a close look at the amount of money that will need to be spent and borrowed, compared to the benefits that will come out of the degree pursued. Thirty years ago, a bachelor of business would have been a desired degree to hold. In an economy with over 20% unemployed, one must ask: how many business administration and management jobs will there be four or five years from now, especially if we continue to lose production capacity to cheap foreign labor.
A micro-documentary created earlier this year by Crush the Street exposes this scam:
The government gladly invests taxpayer dollars into student grants and loans. This is what has been driving the increase in college tuition bringing it above and beyond the average student and family.
For teenagers the propaganda is so potent that high school students in many cases have blind optimism that they will land their dream career after college and have the income to easily pay off any loan balances occurred along the way.
Some graduates are left with over 100,000 in debt and can barely find any job, let alone the one they pictured themselves getting into four years ago.
Millions upon millions of dreams will be crushed by the propaganda being spewed by high school counselors, university marketing departments and the federal government.
Think carefully before committing yourself to tens of thousands of dollars in student loans just so you can hang out and party, because partying is the last thing you’ll be doing for the 20 years that follow your graduation ceremony.
If you already have student loan debt, there is good news. The Obama administration has made several forgiveness programs available for former students. If you have federal student loan debt, give us a call to see if you qualify for loan forgiveness.