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Wednesday, August 8, 2012

College Debt = Grandma Eating Dog Food

Dog Food - What Grandma Will Have to Eat...
One of the big trillion dollar boondoggles our country is laboring under is the college debt problem.

I have written about this before: You purchase an education with debt that yields a degree which cannot sustain the debt the education cost.

Not only that but, as the quality of the education suffers, and the economy suffers, the debt becomes a serious problem.  Recent changes to federal law have removed the option of eliminating college debt through bankruptcy.

Yet the message of "Education!" is still pounded into the heads of children and parents.

Everyone feels that unless they have a nice degree from some college they are failure.

So what's a kid to do if they can't sign for their own college loan?

Get grandma to do it...

The only problem is that now, as the "education debt crisis" expands its drawing in a new set of victims: the elderly on social security.

So grandma, who felt bad for little Jr. not getting into college, signed for little Jr.'s college loans.

(Little Jr. might be grandma herself, grandpa, grandma's adult child, grandma's actual grand child, etc. - the majority I am describing are actual offspring of some sort...)

Only problem is that little Jr. either didn't finish or got a degree which was useless for generating the income to pay back the debt.  (Of course there are other variants including the elderly themselves simply not repaying their own debt.)

And now grandma is on the hook - possibly for big bucks.

According to Smart Money in 2000 only six (yes '6') elderly folks had their Social Security garnished for repaying eduction debt.  In 2011 the number of cases as around 60,000.

So out of grandmas $1,235 USD monthly Social Security check comes $190 USD for the US Treasury education loan program.


But wait, there's more...

The social security system, already on its way to bankruptcy, is now funding the trillion dollar education debt.

Kind of like a government Ponzi scheme where one bankrupt government agency pumps non-existent money from one empty slush fund to another.

Basically the government writing checks to itself to payback debt...  The government model to get money to repay educational debt from the consumers who purchased in the first place fails, we take money from another program itself already going bankrupt.


How can our leaders do this to us?

Not everyone, as I have written in other others, needs a college education.  For example, "Everyone Needs a Plumber" and "21, $55K a Year and No Debt."

So why pretend they do?

(So "big education" get keep paying tenured idiots to pervert children's thinking I guess...)

Most significant success comes for a business and not a job anyway: realizing that only you are limiting your options for success.  Working for a "boss" offers you nothing beyond what the boss lets you shoot for.

So now the country is faced with a shortage of folks who can do what's needed in the blue collar department, a trillion dollars in debt, and now old retired folks being thrown to the wolves to pay for it all.

Now obviously grandma "signed" for the education with her own hand but did she get what she paid for?

It doesn't matter because today a college has no responsibility for your success - no matter how much you paid.

I am not saying it should but consumers should be more careful and examine what they think they are purchasing.

For example, demanding to see how successful the grads are in repaying student loans...

I'd like to see those statistics.

I'd like to see little Jr., mom and dad at the college financial office pouring over the stats on how many grads didn't repay their loans.

I'd like to be a fly on the wall listening to that conversation.

Might save grandma from having to eat dog food....

1 comment:

  1. Wow, great post. I am thinking about going back to school to get a degree. I am looking into stenography degrees and life experience degrees. I am so worried about the student loans. I don't want to put myself in debt that I can't get out of. Since I am a little older now, I will not be having anyone sign my loans for me! Thanks for the great information!