Student Loans: The Chickens Are Coming Home to Roost

By Rich Kozlovich

On May 25, 2013 Daniel Doherty wrote an article titled, Last Dance With Sallie Mae, saying; “A new study shows that roughly 33% of millennials wish they never went to college.”  He goes on to point out why; “Plainly put, since more than 50 percent of college students finance their educations with student loans -- graduating, on average, about $28,000 in the proverbial hole -- it’s easy to see why a plurality of young people wish, in retrospect, they had never attended college in the first place.”  He points out the reason why.  “Here’s an indication of how burdensome student loans have become:"

"Here’s an indication of how burdensome student loans have become: About one-third of millennials say they would have been better off working, instead of going to college and paying tuition.

That’s a according to a new Wells Fargo study which surveyed 1,414 millennials between the ages of 22 and 32. More than half of them financed their education through student loans, and many say the if they had $10,000 the “first thing” they’d do is pay down their student loan or credit card debt.

That’s no surprise when you consider student borrowing topped the $100 billion threshold for the first time in 2010, and total outstanding loans exceeded $1 trillion for the first time in 2011. Student loan debt now exceeds credit card debt in the U.S. which stands at about $798 billion."

"Delinquencies are also on the rise. The number of borrowers who are at least 90 days late on student loan payments has jumped from 8.5% in 2011 to 11.7% today, according to a study by the New York Federal Reserve."

And it gets worse! He notes that “more than 50 percent of students who take out student loans in order to enroll at “four year for-profit schools” never actually finish their studies.”  That doesn't surprise me at all since a large chunk of these kids shouldn't have been in some university in the first place.  Not to mention how many stupid social agenda studies they offer that in no way can get them a job that will pay enough to pay off these loans.  Even if they can get jobs in those arenas, which isn't likely.   

The ease of obtaining student loans is at the heart of many problems.  First, it is the primary reason tuition rates are as high as they are.  The more the government steps in to finance higher education the more the high education institutions raise the cost.  When you take a look at what the 'adminsitrative and professional' people at Ohio State University are making a year you begin to understand.  Let’s start with the Universities President, E. Gordon Gee.  “Although Ohio State President E. Gordon Gee is paid a hefty salary, Gee’s salary was only the third highest in the country for public university presidents for the 2011-2012 fiscal year, earned slightly less than $1.9 million as his total compensation in 2010.”

On the financial chart provided by OSU regarding salaries he is listed as $775, 008 in 2008, $802,125 in 2009 and $802, 125 in 2010.  As for “total compensation’ which may not appear on the chart; we may wish to wonder about others also.   Between 2008, 2009, and 2010 Ohio State University paid a total of 252 salaries averaging $390,037.49 for administrative and professional personnel.  Some were medical people, some were coaches, some were administrative personnel and some were teachers of some kind.  Are they worth it? 

I have to believe the medicine they are teaching must be competently and effectively performed, after all, that will have practical application that can be seen early on. But the question remains; are the costs out of line? 

As for the rest; I don’t know,  personally I doubt it, but there is no way to know except to end the constant spiral of rising costs by eliminating the constant spiral of student loans and grants generated by some government scheme designed to get more people into higher education.  Once that happens we will see the true value of these people. 

As for right now; it is my view that educators at the lower level are ineffective and overpaid based on the value of the product they are turning out.  If they were making nuts and bolts they would be rejected by the manufacturers.  I have to believe it is even worse in higher education, especially when I see the insanity they are teaching these kids today.  They end up not only ignorant, but arrogant in their ignorance. 

I would be willing to bet we could get that for a whole lot less money.