Feeling blessed today that my kids do not have to borrow money to go to school in 2013.
College students that have to, will see interest rates almost double to 6.8%. This applies to 1/3 of all kids in college that will borrow an average of $6500.00 for the school year.
That will be more than 42 billion dollars borrowed and almost 3 billion owed in interest per year from here on out. Most of these will be paid to colleges and universities that are also subsidized by tax dollars.
After the Affordable Care Act takes effect in 2014 students will come out of college owing more than ever in debt, required to have health insurance whether they have a job or not, expect medicare and social security to still be bankrupt within their lifetime and make less than a student that graduated with the same degree in 2007. They are less likely to buy a home, own a new car or take long vacations in the first 5 years they leave school.
Yes and 50 percent of these students will drop out before they receive a degree. The class of 2013 may create the largest working class poor population of all time and this is just the beginning. College enrollment is declining at 2.3% this year and will continue to fall at a much larger rate as the cost of education goes up. The cost of a 4 year degree at a public school is now above $80,000.00. Many of these institutions have been on a building spree to keep up with other schools and soon will be searching for funds to sustain what they have.
So what will the next crisis be the government will try to solve and be unsuccessful in doing so? You got it, they will try to save the college education.
Institutions that are smart and see this coming will have more and more classes online and less infrastructure. Text books will be digital and professors in lecture halls will become less necessary to the curriculum. Most of them will try to save their precious buildings instead.
The largest union of the government, the department of education will cry foul and sadly find out while they have diverted too many employees to the school lunch program they should have been coming up with a plan to prevent the coming crisis.
My suggestions to students, instead of borrowing money, find a job in or close to the field you would like to pursue and take longer to get a degree. Start at a community college, keep your grades high and finish at a school that is well established in finding jobs for the graduates for the degree program you are in. Look for every scholarship or grant you can get and apply. Or plan to live in mom and dad's basement for quite some time after you leave school. Students still have choices. They are just different than what they used to be. If it takes the student six years to finish college instead of 4 and they come out debt free they will still be ahead by not having to make a student loan payment for 10 years or more. Another option would be military service which still provide for a great subsided education and experience along the way.
Education is not the end all for those that can't afford it. You can self educate yourself online now for next to nothing if you have the desire to do so. Search engines provide answers to almost any given question. You can learn to program a computer or create an app easily now.
The death of the public education is on the clock now. It will come sooner than we think. Make plans to succeed anyway. I know my kids will.