Last May, I wrote a column titled “Declining value of college.” While the conclusions it contained are still correct, they were much less forceful than they should have been, thanks to my ignorance of the corrupt federal-university complex that has erected a legal wall of debt slavery around young Americans today.
This is because the value of a college education has not only declined significantly due to the vastly increased supply of college graduates and the reduced quality of degrees provided by the academic institutions that sell them, it has also been slashed by the construction of a methodical system of financial rapine by which the future wages of American college graduates are inexorably, and in most cases, unknowingly, committed to the federal government and a few giant corporate leeches. It is a cynical system in which the university, the college professor, the government and the financial institution all profit at the expense of the young and clueless.
CollegeScholarships.org has provided a detailed infograph that explains how the system methodically grinds up the ambitions of high-school graduates and their parents and converts the graduates into helpless debt-slaves with less recourse or hope of escape from the system than had Victorian debt-prisoners of the 19th century. The dark secret of the college-loan system is that it is not designed to help students pay for college and generate a reasonable interest-profit for the loan provider that will be paid off within a short period of time after the student begins working and receives a degree-enhanced salary. It is specifically designed to keep the graduate on a treadmill of debt that will ideally never be repaid.
This should be readily apparent upon considering the fact that there is presently $850 billion in outstanding student-loan debt in the United States. Since there is a total undergraduate enrollment of 14,473,884 students paying an average of $10,871 to attend college, the total annual cost of all college education is $157.3 billion. This means that past and present students are burdened with 5.4 times more debt than it costs to educate every single current college student enrolled in higher education. Since 44 percent of college students don’t graduate within six years, (and notice how the metric has climbed from four years to six years to artificially raise the graduation rate), the debt is 10 times the cost of educating a single national graduating class.
Thirteen years ago, the college system entered into a death spiral when Congress barred the ability to discharge student-loan debt when filing for bankruptcy. This allowed universities to engage in the same foolish and risky profit-maximizing behavior that the mortgage banks did, secure in the knowledge that the underlying funds that paid for their products were completely guaranteed by the government.
I highly recommend reading the complete document titled “The Student Loan Scheme.” In abbreviated terms, the system is designed to work like this:
1) The private SLM corporation provides a student loan.
2) The student defaults on the loan.
3) The federal government pays the balance of the loan and its interest to SLM.
4) The government sends the debt to a collection agency which adds a collection fee and a commission totaling more than 50 percent to the total. The agency is owned by SLM.
5) The collection agency garnishes wages, income and even Social Security checks. The former student, now a debt-slave, will literally be paying until he dies.
High-school students must learn that no degree, not even one from a top Ivy League university, is worth the gamble of being caught up in this infernal system. And parents must learn that they must deny their children the dubious honor of being sacrificed to the illegitimate gods of educational debt, no matter how desperately their children might plead for the privilege, like innocent Aztec maidens bedazzled by the sun.