re: Grim stats about the student loan bubble

I signed up for it but never used it. I did use CLEP/DANTES a lot though.

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I signed up for it but never used it. I did use CLEP/DANTES a lot though.

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So you leveraged your real-world experience in the military and passed exams offered to gain college credit?

Asking because I dont know much on CLEP/DANTES outside a quick google search.

If true, maybe we could provide a civilian version? A mechanic who works in a shop for 5+ years could take examinations that go toward a BSME.

You get credit for your technical field schooling, Professional Military Education (PME) courses, etc.

Some services have their own community college systems and offer two year degrees which can then be used to earn a four year degree and so on.

DANTES is the military version of CLEP. They may have a new name for it now, I've been retired for almost 11 years.

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People need to go to college part time and pay as they go in an effort to avoid massive debt.

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I agree. But you offer an 18 year old who has never had a job and has no real world experience unlimited free money with no credit check and no payment for 5 years it is hard to blame the dumb kid for taking it.

The government backed gaurenteed loan programs with no credit checks and 11% interest rates need to die. All of that should be handled in the private sector.

The problem is ballooning out of control. To put it in overly simplistic terms:

College tuition is $10 a semester. Government offered gaurenteed no credit check loans at a standard rate. An average student can pay that back in 10 years after college.

Fast forward a few years

College raises tuition to $20, without raising quality or anything else, government gaurentees that amount. Now students will take 20 years to pay it back with higher interest rates than the private sector.

Fast forward a few years.

College tuition is now $35, over triple what it is actually worth and costs to educate, the government is still offering to gaurentee all this money to colleges, so colleges drop their admission standards and degree standards and you end up with millions of young kids in too much debt to ever pay off at interest rates through the roof that default because they get into the real world and realize they have been sold a lie but it is too late and they are too far in debt to do anything about it and their other expenses are piling up.

It is a very grim and sad reality facing this country.

And what is worse is that government offers basically unlimited deferment and interest only payment options. Something is going on there. If they ever tried to aggressively collect on all of that student loan debt they could effectively bankrupt and jail a quarter to a half of the educated youth of this country. Scary thought.

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Getting a degree for the sake of being educated and not for any career opportunities it might open up doesn't make a lot of sense.

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One may argue that college was never intended to be workforce training.

Somewhere along the way companies expected colleges to pump out graduates that didn't need any on-the-job training once they got there.

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23 Billion is effectively the cost of the wall. No one seems to mind that option.

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The wall will work. People who take loans for college don’t work

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Somewhere along the way companies expected colleges to pump out graduates that didn't need any on-the-job training once they got there.

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I've never worked anywhere where they acted like this.

My issue in all of this is the fluctuation in student loan rates over time and the increased cost of tuition over the last twenty years.

Loans from undergrad are at about 2.5%, and 5 years later they are between 6.5% - 8.25% for law school and are all federally backed. At the same time the cost of attendance skyrocketed, so the cost to obtain a degree has multiplied.

It is easy to say that you should not go if you can’t pay for it, but that’s not reality for the vast majority of people in this country.

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that’s not reality for the vast majority of people in this country.

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That's the problem.

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What makes it a bubble?

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I think it's more a looming albatross that seems to be getting fatter with age.


What will we do when the default rate hits 50%? We are well on our way there.