The College Student Loan Scam

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Here’s the Video Transcript:

 

hyatt’s dwyer keeping it free blogspot.com you know I hate to see anybody get exploited let’s talk about the current situation with student loan debt right now first as an aside let me point out that I paid off my own student loans about 15 years ago right I know what it’s like to accumulate the debt burden that comes from attending an expensive private school and an expensive private law school right I understand the sacrifices early on that you have to make between paying your student loans and other possibilities in life right the system work for me it’s possible but let’s talk about the current situation right now government has made a lot of promises to a lot of people we have unfunded liabilities in the trillions of dollars right all of these expensive government programs where they are helping people giving people benefits paying people covering people’s health care expenses and other expenses you can imagine all of those things cost an awful lot of money and as we all know our government is trillions of dollars in debt right we need for some people to pay more than they’re getting too close the funding gap right especially given our demographics baby boomers getting older they have more requirements more needs that they need fulfilled from the system like we need for someone to pay those bills now it may shock some people but what we think of as the student loan program could be construed I would argue should be construed as a way to get working and middle-class young people to pay for the system right understand that not only student loan debt right now more than housing debt in America but you need to further understand that student loan debt is not dischargeable in bankruptcy the reason why lenders are making student loans is because they get a profit on the backend like there’s a reason why it’s called a student loan and not a grant right there’s profit involved on the backend you borrow X you pay back x + 1 to the lender now under the guise of removing the middleman the government is now assuming these student loans they’re cutting out the private financial institutions they’re getting access to this pool of non-dischargeable receivables from young people the young people who need student loans to attend college right now all of the people who say that you’ll be able to easily pay back student loans they can’t predict the future ten years ago could these people have predicted the iPad I mean if predicting the future were so easy wouldn’t we all be multimillionaires by virtue of the stock market wouldn’t we never be surprised by ongoing market conditions if you believe as does Warren Buffett by the way that it is very hard to beat the market that these hedge funds ultimately long-term are not going to outperform index funds if you believe that economic truth then you need to ask yourself if it’s so hard to pick the financial future of our country how could anyone discuss with you your ability to repay a student loan in your financial future right isn’t what is really going on young people accumulating 20 30 40 50 60 80 90 100 and I know there are some young people watching this video saying keep going literally a hundred and ten thousand dollars worth of student loan debt while the people around them are saying don’t worry you’ll be able to pay it back meanwhile you have this debt it’s not a mortgage because you don’t have the house that goes with the debt but you can’t cut the debt by selling the house right or liquidate the bed by selling the house to pay off the mortgage no this is worse than that this that just hangs on you you can’t discharge it in bankruptcy you really have to pay it back if you’re going to do anything like get a mortgage from a lender or have a government license right you know you you’ll be surprised you can’t have a medical license or a legal license that’s valid if you have a huge debt hanging that you have not repaid right and so to the government just like taxes that’s where we’re headed when the government cuts out the middleman on the student loan program let’s go further and I encourage economist to do the numbers on this let’s get provocative understand that the student loan program is also a big transfer from the 99 percent to the one percent right because the one percent pays for college in real time they don’t have to pay back the student loans right an argument can be made that it’s the one percent who are profiting off student loans right understand that indebted middle class graduates have to take jobs to pay off the debt right jobs with steady salaries in other words when you leave college and you have this debt you can’t compete with the inefficient companies around you right you can’t start your own business because you need a steady stream of income to pay back your financial obligation right and so here’s where it gets dicey so you’re going to have to work for a company that can give you that steady stream of income and what you need to realize is that because you’re not alone because there’s a whole group of graduates a whole class if you will let’s say the class of 2012 hitting the labor market at the same time right it’s really a rat race for a limited number of jobs being offered by wealthier people right and because of the laws of supply and demand and your debt you might have to take a lower paying job you might have to trade off bigger more uncertain profits for lower paying steady salary to have the income to pay off your student loan debt right in essence you’re working for the one percent and you’re working for them for less right you know it’s a real tough one all I can say is to everyone thinking about going to college I would encourage you to carefully think about the debt you’re incurring in college and I would encourage you to look at the people who are 24 25 26 27 who recently graduated from college and for those you trust you should find out from them what their debt burdens are and how they’re coping with them and how it has impacted their lives including their ability to start families by mortgages things like that then you need to look at the salary levels of the college graduates in your area and you need to compare and contrast that with the salary levels of the people who did not complete college right not just people who didn’t go to college people who did not complete college because you have a whole group who started college and then made the decision that College was not for them and then you need to ask yourself whether or not the people who have completed college are doing so much better than everyone else when you factor in their debt burden right if I complete college and i’m making a hundred dollars a week right five thousand two hundred dollars more a year than the person who didn’t go to college is it worth it if in that year I’m paying ten thousand dollars towards student loans and have a student loan debt burden of a hundred and ten thousand dollars right those are the questions always be aware of the cost right many people are finding out quite frankly when they graduate from college that the costs outweigh the benefits right the world has changed since I went to school many years ago just the change toward making student loan debt non-dischargeable in bankruptcy court has greatly shifted the risk to the student let me also point out that you know your parents went to college at a time when the cost of college was a lot lower than it is now right bankruptcy nondischargeability aside understand that the cost of a college education has exceeded the rate of inflation for several years for decades right College is just simply more expensive than it is right now so when any older person is telling you about their experiences going to school in the 80s and 90s if you’re a potential college student what you need to do is to figure out what their tuition was then and whether their experience then is remotely analogous or would be remotely analogous to your experience now there are a lot of people in debt because of student loans funding our Great Society right now and unfortunately people in their 20s have one of the highest unemployment rates in the country and of course this debt is just sitting there like luggage you can’t leave before you’re in that situation think it all through let me also point out too that you have a myriad of educational opportunities today that you didn’t have in the 80s and 90s you have online universities that quite frankly aren’t paying the costs of maintaining an expensive real college campus unreal property right where I in high school now I would certainly have to include those universities in my calculus on whether or not to go to college and whether or not to go to traditional college let me also point out too that there’s a huge opportunity cost to go into college young people often are more creative than older people not only that you have a group with you your peers 19 20 21 year olds who are a lot cheaper to hire and to work with just from an out-of-pocket cost perspective they’ll take lower salaries then people who are in their 30s 40s and 50s right Steven jobs and others were able to start their businesses when they were young 18 19 20 21 22 and of course they had a lot of ideas they weren’t beaten down by working in 95 s for decades they had a lot of ideas they could in the garage create the next Apple and of course their friends were in the same boat right a lot of energy to change the world when you’re 18 19 20 21 right when you go to college you don’t have quite the same opportunity you’re already juggling a collegian workload right you’re going from senior year of high school hanging out with the friends and enjoying youth to suddenly being in classes with statistics calculus college professors things like that right you’re spending your time and energy not in the garage creating apple but in the classroom trying to get an A right there’s an opportunity to cost to that that people need to consider too because you’re only 18 19 20 and 21 once in your life let me know what you think leave your comments for me here online visit us at keeping it free da blogspot com and wealth spin blogspot com thanks for watching

 

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