Following on the heels of last week’s blog on The True Cost of College, this came across my desk. I’m taking the time to share it this week because I think it adds more to the discussion because: 1) It addresses where most of the defaults on student loans are coming from and 2) It shows how the default on student loan debt is going to affect the average American 401K dependent.
“For-profit education companies’ revenue stream is almost entirely dependent on the federal government funded student loans. For-profit schools enroll 10% of the people into colleges, used up 25% of government financial aid and account for 44% of student loan defaults...to make matters worse, much of for-profit education student loan academic complex capital/equity base is supplied by mutual funds, which get their funding from Main Street America’s 401(k)s.”[i]
So why should you care about “for-profit education” companies? Take a look at this link and find out what you should know and realize that those pushing more schooling for you aren’t necessarily doing it to benefit you.
According to the Bureau of Labor Statistics 2.7 million skilled jobs have been lost since March of 2008. How did their degree protect these people from losing their jobs? And on top of that does your student loan offer a guarantee that you will find a job once you are out of school commiserate to the degree you hold?
Again, I’m not dismissing the value of real education, but the cold and bold fact is that 40% of college graduates end up in a job that requires no degree at all.[ii] Furthermore, according to Andrew Sum director of The Center for Labor Market Studies at Northwestern University, many of “...those graduating (today) are not likely to see any major improvement.” So don’t throw caution to the wind and jump into college just because everybody else is doing it…especially if you’re borrowing money to do so.
As I wrote last week, learning to control the money which you would have spent on college can far out perform any undergraduate degree which might add additional earning power over your life time.
It’s all about the control of the money flow. And you can learn how to control the flow of your money without a college degree... perhaps even better than if you had a college degree.
I talk with people all over the world today who have learned to control the flow of their money. These folks have created more wealth than they ever did, or ever could have, while working in the field of which their college degree qualified them for. Yet not one of these folks ever learned anything about controlling the flow of money from college.
The concept of learning how to control your own money also known as Becoming Your Own Banker[iii] is considered “too good to be true” or a “fantasy” by many in academia. But consider the fact that many of those pushing and controlling academia today are merely manufacturing a lot of revenue for themselves by controlling the money that you spend on college.
Now deliberate on this long list which reads like a Who’s Who. All of whom have either dropped out, been kicked out, or simply never attended school: http://www.collegedropoutshalloffame.com/index.htm Then pass this on to your friends and family… but especially to anybody you know who plans on borrowing money to pay for a college degree because what you believe matters. And what you believe is based upon what you know. And what you know comes from being educated which is totally unrelated to whether you attend school or not.