College & Student Loans…Is It Worth It? (Part 1)

Pile of Money 800Last week one of the major news stories was congress debating on whether or not to allow student loan interest rates to rise later this summer.  According to the book “The Two Income Trap,” 97% of Americans believe that they need a college degree to become successful.  With the consistent rise of costs for a college education the question becomes is going to college really worth it?

Take a look at some of the latest statistics about college and student loans.

  • 54% of new college graduates are unemployed or under employed
  • 39% are behind or are currently deferred student loans
  • Over 1 trillion dollars in student loan debt as of 2012
  • Average consumer has just under $30,000 in student loan debt
  • Only 54% of students that start college end up with a bachelor degree in six years
  • Tuition averages an 8% increase per year (which means the cost of college doubles every nine years)

In the spirit of education, what grade would you give higher education with the above statistics?  More than likely the grade you would give would not be a satisfactory one, yet almost every American feels this deep obligation to obtain a college degree.

So is it true that you need a college degree to become successful?  What is the definition of being successful?

  • How much you make?
  • How big your house is?
  • Job title?
  • How many degrees you have?

Check out the top 100 Entrepreneurs without a college degree according to youngentrepreneurs.com

There is nothing wrong with going to college and obtaining a degree that will help you pursue your dreams, goals and desires.  But like anything else in life, it is only a wise choice if it something you can afford.

Next week we will uncover how you or your child can go to college without ANY student loans and if you have student loans how you can pay them off quickly.

Justin Bennett

  1. Good, honest common sense! Since the Soviet Union launched its first satellite, Americans have had a college frenzy, and too many people are wasting time and money on something that won’t serve them.

  2. Student loans have become a hot political issue. That is too bad because the true solution to the issue will be delayed. There are a few simple principles in play here.
    ■First Issue: Supply and Demand. With the massive government subsidization of higher education it is no wonder that college tuition is out of control. This subsidy has created an increasing demand curve against a relatively fixed supply so of course the cost of tuition has outstripped inflation for many years.
    ■Second Issue: Return on Investment. The conventional “wisdom” that “everyone should be able to get a college degree” has left us with millions of new graduates with thousands in debt because their schools misled them into thinking that getting a job with a unique degree would be easy.
    ■Third Issue: Caveat Emptor. Parents, teach your children fiscal responsibility at an earlier age! They are targeted by predatory financial institutions for credit cards and to assume debts for material things before starting a career. Without a strong sense of reality and good math skills your child will be an indentured servant to these institutions for their entire life.

    I believe a classic market correction is in the works. Increasing competition from on-line learning venues will lower the cost of getting a higher education soon (over the next ten years). Cost will plummet as the “bricks and mortar” college experience is replaced by a predominately on-line experience. Think of it as disintermediation of the “bricks and mortar” experience. Then the predatory financial institutions (and the alcohol cartel) will need to find new ways to exploit our children.

    Here is a great “rant’ by Dave Ramsey on this issue. He nails it. http://www.daveramsey.com/radio/home/loadclip/studentloans-20120426?ictid=text

  1. College & Student Loans…Is It Worth It? (Part 2) | - May 6, 2012

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