-Let me start off by saying that I do not have student loan debt. I am very fortunate that I was able to obtain scholarships to get my college tuition payed for with out the need for a bank loan. I have a Bachelor of Science in Anthropology with a minor in Communications.-
There are many people to point the finger at who has caused this new very very large financial bubble that will plague our country for decades. I blame three main culprits for this brilliant scheme to keep the masses oppressed and in an indentured servitude state to the corporations that hire them. The employers, the universities and the United States Federal Reserve are all responsible for this slavery. The end of the tunnel is in sight because I have a solution. Let me first describe how each party benefits and why its in their best interest to continue this process.
I. Employers
Lets start off with the employers because they are the real proponents that drive this machine. It benefits the employer greatly to require a college degree from a new higher for many reasons.
1. The employer no longer has to cover the high cost of educating their workforce and thus benefits financially. Not so long ago, companies would offer "on the job training" for specific jobs in that industry. Now if a worker wants to get hired for a job, not only do they have to have experience, but they also must have formal education from an accredited university in that field before entering the workforce.
2. Hiring a candidate with high amounts of debt makes the employee subservient to the company in order to pay off the dept. In addition, student loans do not go away like a business loan can when you file for bankruptcy. The IRS will even take money out of your social security check in order to pay off the balance of the loan. This means that the former student has to pay off his debt and is forced to work in order to do so.
II. Universities
It benefits the university to charge more in order to make more money, so they will.
The universities can charge more for tuition for 3 major reasons.
1. Soon, I believe every employer will require a college degree in order to get hired; that means every person has to have higher education in order to survive. Most people do not have enough savings to sustain a lifetime of living and thus they have to work in order to live till the next paycheck.
2. The universities charge more because most if not all universities are charging more. Students have no alternative for legitimized higher education that the employer requires in order to get a job.
3. Since the majority of student loan debt derives from federal government loans with very low interest rates than the ability and temptation for cheap money increases, especially in regards to poor high school students getting ready to leave the comfort and security of their parents. Since money is made from paper, money literally grows on trees. The Federal Reserve can simply print more of it when ever it needs more. The universities know this and take advantage of the money being handed out to students like beads thrown out during a Marti Gras parade.
This brings me to the ring leader of the group, the Federal Reserve and the banking institutions.
III. The Federal Reserve
The Federal Reserve and the banks all benifit from the education scheme.
1. The student loan is a guarantee for profit from the interest because student loans can not default for non payment. This means that years later if the student has not paid off his debt than the government can reach into your social security check and take out the money. What will happen when a whole bunch of elderly die with debt? Who will pick up the tab? The next of kin?
2. The banks facilitate the lending process and gain profit from the interest on the student loans and even hedge for a larger margin with other financial institutions based on the security of the loans. Student loans are the biggest guarantee of return on investment because the students can not file for bankruptcy like a business can. If the universities require more for tuition; the Federal Reserve will gladly print more.
This cartel between the banks, universities and employers has to stop. My solution for this would be to pass legislation prohibiting hiring discrimination based on the education level of the employee. All state licensing and education requirements would still apply, for example real estate license, insurance license, financial advisory, medical license and education requirements etc. Employers would still be allowed to require work experience under this legislation.
If the people do not rise up in time, the institutions who had the biggest meal will have already left the table by the time we realize that, we the people, will be stuck with the bill, once again.
Please share this link with everyone you know. Now is the time to rise up and force change. The only person that will take care of you and your family...is you. We can do this!
