This was on top of the existing $20,000 in debt I had from undergrad because my family couldn’t pay the already ridiculously high college tuition for me to go to a top school. And back then NOBODY was talking about NOT going to college. In fact, there was pressure in my high school to go to the best college you could get into; hence the debt.
In Grad School, I couldn’t understand why I had a 6.75% fixed interest rate (yes- looking back to 2006 I should have picked the variable rate loan option instead of the fixed, but hindsight is 20/20). I couldn’t believe the government had no problem charging me such a high interest rate for doing something responsible like investing in myself and my future, meanwhile we were rewarding Strawberry Pickers making $14,000 a year with $720,000 mortgages.
This all leads to my main point: the cost of college is bankrupting this nation. Student debt is an economy killer. Take it from me. I graduated college and grad school with student debt. Therefore I spent less during those years and didn’t make big ticket purchases, the things that really drive our economy.
They say people with student loan debt lag significantly compared to their peers without it.
And the issue is just getting worse. Colleges aren’t going to stop raising rates. In the last 30 years, a typical family income has increased by 147% more than inflation but the college education inflation rate stands at 500%.!
How can anyone possibly keep up?
The answer is that most of us can’t. We can’t sustain this and so eventually the 18 year olds of this world will look for other alternatives. And why not? The internet, mobile phones and globalization have given us more control of our destiny than most colleges can offer.
So we are seeing the rise of online education (MOOCs), we are seeing some of the best companies in the world (read: Google) care less and less about whether or not you have that college degree.
I bet we’ll even see a return to the traditional blue-collar jobs. And there is nothing wrong with this. I mean, my neighbor that I grew up with is an Electrician now and I’m pretty sure he makes more money than me today (and he’s his own boss).
College used to be a place for the privileged. Then somewhere around the early 80’s it became so mainstream that my “too busy growing pot and going to Phish concerts to pass high school” brother could go to some joke of a college where 75% of the students don’t graduate in 4 years. 75%!! (Can you guess that he never ultimately hung a diploma on mom’s wall?)
So now I believe college attendance will go back on the downswing. Who can possible afford it?
It’s already happening.
I agree with the wise and ever innovative Clayton Christensen that major college bankruptcies are on the horizon.
Now don’t worry- there will always be a place in this world for the Ivy Leagues and Stanford and the big state schools like my grad-school alma mater University of Michigan, but I bet you my undergrad won’t be around 50 years from now.
So my point here is, if you get into an Ivy League school or Stanford or Duke or Notre Dame, then by all means do whatever it takes to go. (If you got into one of these then you are probably already wealthy enough to pay for it anyway, but that’s another story). But if you didn’t get into a top school, and you don’t feel comfortable putting yourself into the student debt trap, then don’t. Seek out alternatives.
Go teach yourself a skill like how to code and build an app. Go travel around the world for a year working in 3rd world countries, then reapply and get a full ride to Princeton because “now you are interesting”.
I just want everybody to know that there are options now. We all don’t have to follow this cookie-cutter path of Highschool–> College –> Cubicle. There is no shame is skipping college anymore. The stigma is changing. You can learn what you need to learn in other non-traditional ways.
So do it.
What do you think? Leave me a note telling me all about it!