Saturday, August 22, 2015

More on College and the Hidden Costs of Embarking Unknowingly on a Lifetime of Debt

Keenan wrote earlier today about the politically driven proposal of Hillary Clinton to make college free and 'help' the students financially.

Of course, she conveniently failed to mention that many of our entering college students are ill prepared to do the work academically, and that fewer still are knowledgeable about the fundamental perils of taking on student debt. Nor did she bother to point out that many entering students never graduate, and that many who do graduate enter the globally competitive workforce unprepared. So let's take a further look at all that herein.

Before embarking on a college education, our typical student has 'progressed' through the K-12 government, aka taxpayer, funded public school system. The already 'sunk' cost to taxpayers associated with 'preparing' our new college student has amounted to approximately $150,000, assuming a cost of ~$12,000 annually for 13 years of 'preparation.'

Then the real 'education' begins. The newly enrolled college student takes out a loan and perhaps is the recipient of a Pell Grant as well.

That's how the college gets paid. In other words, 'butts in the seat' are required in order for the college to collect its monies charged for the privilege of attending. What isn't required, however, is any demonstration that the entering student is genuinely prepared to do the college work academically.

Thus, remedial courses are often required, so let's call this college what it is --- 'University High School.' Next the borrowing student signs on the dotted line and thus begins a lifetime of ill advised debt. No prior debt education was provided during the 13 years of pre-college preparation, and neither is one offered by the college.

It's simply a 'butts in the seats' world at Dear Old University High School.

The official college drama is complete either when the indebted student drops out and fails to graduate, or when the indebted student graduates but is unprepared to enter today's globally competitive workplace for college graduates. See School-Loan Reckoning: 7 Million Are in Default.

Of course, Hillary has an answer for that ill prepared graduate as well. The graduate can secure public sector employment and perhaps teach the next crop of K-12 students.

But there's even more to this sordid story, so let's take a look.

The Progressive Principle is subtitled 'First you encourage student debt, then you write it off on taxpayers:'

"The arc of progressive politics these days seems to be hoping to benefit from proposing policies to solve the problems their previous policies have created—and hoping nobody notices the cause and effect. . . . The goal is to win over millennial voters with more taxpayer largesse, while slowly turning higher education into one more universal federal entitlement. . . .

What Democrats don’t say is that such taxpayer generosity wouldn’t be necessary if they hadn’t done so much to encourage students to load up on taxpayer-guaranteed debt. The Education Department reported this week that some 6.9 million Americans with student loans hadn’t made a single payment in at least 360 days. That’s up 6%, or 400,000 borrowers, in a year.

The Obama Administration took over the student loan market in 2010, easing terms and expanding benefits. Now that the bills are coming due . . . Democrats hope to benefit again by handing the tab to taxpayers. They nail you coming and going."

Summing Up

Basic financial literacy is not taught in America's schools.

Meanwhile, our indebtedness grows, both individually and as a nation.

Hillary and the 'progressives' oppose parental freedom of choice and school vouchers for kids who attend K-12 schools.

They do that because the teachers' unions are their biggest political supporters at election time.

Thus, the 'unfree to choose' kids pay the price of big government from kindergarten through 'University High School' and beyond.

Too many will then spend their adulthood trying to repay the burdensome indebtedness which their 'helpful' teachers and politicians WILLFULLY neglected to warn them of while they were still young, not indebted and hadn't yet forfeited the opportunity to act sensibly and responsibly.

And all Americans, willingly or not, may very well be required to help them pay the bills.

That's my take.

Thanks. Bob.

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