Student Loan Payments are Overdue because Universities sold Students Costly Degrees with no Market Value

Posted by PITHOCRATES - May 26th, 2013

Week in Review

American companies have difficulty in filling positions requiring strong science, technology, engineering, and mathematics (STEM) skills.  So they turn to foreigners.  And the H-1B visas (see H-1B Visas and the STEM Shortage by Jonathan Rothwell and Neil G. Ruiz posted 5/10/2013 on Brookings).  Which means our colleges and universities aren’t producing enough of these STEM graduates.  Instead, what they are producing is a lot of people who can’t get a job.  And probably will never be able to repay their student loan (see Overdue Student Loans Reach Record as U.S. Graduates Seek Jobs by John Hechinger posted 5/23/2013 on Bloomberg).

Overdue student loans reached an all-time high as students struggle to find work after college, according to a government report renewing alarms about the rising burden of higher-education debt.

Eleven percent of student loans were seriously delinquent — at least 90 days past due — in the third quarter of 2012, compared with 6 percent in the first quarter of 2003, according to the report by the U.S. Education Department. Almost 30 percent of 20- to 24-year-olds aren’t employed or in school, the study found.

The research is being released amid concern in Congress and President Barack Obama’s administration about rising college costs and $1 trillion in outstanding student loans, the largest category of consumer debt besides mortgages.

So our colleges and universities pocketed a cool $1 trillion in return for giving our kids degrees that have little market value.  At least 30% of those degrees.  A trillion the U.S. taxpayer will probably end up eating.  Just like they had to eat the subprime mortgage mess.  Which begs the question.  Why are our colleges and universities selling our kids degrees that can’t help them land a job?  And don’t say it’s just the economy.  While the bad economy plays a part it doesn’t explain all those H-1B visas.  What these visas tell us is our colleges and universities are screwing us.  By conning our kids to go into great debt for worthless degrees just to bring hundreds of billions into their campuses.

If anyone bails out this student loan debt it should be those responsible for it.  The ones who sold our kids these worthless degrees.  In fact, in the future, we need to make some kind of eligibility scoring system for student loans.  Based on a survey of who businesses are hiring.  Those they’re hiring most (like those with STEM skills) should be eligible for the greatest student loan amounts at the best interest rates.  Because these graduates are most likely to get a job commensurate with their education.  And will be able to easily repay their student loans.  While those who businesses are hiring least (like those getting degrees in gender studies or drama) should be eligible for the smallest loan amounts and pay the highest interest rates.  Or simply denied any student loans.  Because they will be the least likely to get a job.  And will have the most trouble repaying their loan.

For those who feel they must have these degrees with no current market value to enrich the American tapestry they can still get these degrees.  They just need to pay for them out of pocket.  Or have their parents pay for them.  Which shouldn’t be a problem.  For they can demand colleges and universities lower the tuition costs for these degrees with no current market value.  I mean, why should they be charging so much and put a student into so much debt for a degree that won’t improve his or her economic position.  Which is the ultimate reason we go to college.  So we can earn a bigger paycheck.  Even the drama students dream of going to Hollywood where they can be rich and famous.

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