Posts Tagged ‘student loan debt’

Billionaire Mark Cuban Predicts College Loan Meltdown

In a topic he has written about before, Tech Billionaire/Dallas Mavericks owner, Mark Cuban, took to his blog over the weekend to write at length about our nation’s trillion-dollar college loan debt crisis. Cuban compared the college loan market to the housing bubble before the crash that preceded the great recession.

Cuban states, “It’s far too easy to borrow money for college.  Did you know that there is more outstanding debt for student loans than there is for Auto Loans or Credit Card loans ? Thats right. The 37mm holders of student loans have more debt than the 175mm or so credit card owners in this country and more than the all of the debt on cars in this country. While the average student loan debt is about 23k. The median is close to $12,500. And growing. Past 1 TRILLION DOLLARS.”

Cuban championed non-traditional higher learning institutions and was critical of colleges tuition raises:

“While colleges and universities are building new buildings for the english , social sciences and business schools, new high end, un-accredited, BRANDED schools are popping up that will offer better educations for far, far less and create better job opportunities.

As an employer I want the best prepared and qualified employees. I could care less if the source of their education was accredited by a bunch of old men and women who think they know what is best for the world. I want people who can do the job. I want the best and brightest. Not a piece of paper.

The competition from new forms of education is starting to appear. Particularly in the tech world. Online and physical classrooms are popping up everywhere. They respond to needs in the market. They work with local businesses to tailor the education to corporate needs. In essence assuring those who excel that they will get a job. All for far far less money than traditional schools.”

Cuban was also highly critical for traditional universities unwillingness to offer courses online. In addition he blaims student debt for lack of growth in the US economy:

“The biggest problem the economy has is the enormous student debt new college grads and those leaving college find themselves with. In the past leaving college meant getting a job and getting a used car and/or an apartment with some friends. Yes there was student debt, but it wasn’t any where near your car payment. You could still afford the car and the apartment. Now its the exact opposite. Today, the minute you graduate college you face the challenge of debt against a college education whose value is immediately “underwater”

As a result spending habits have changed dramatically. Now when you leave school you move back home. You take public transportation or borrow your parents car. The only thing new you buy is the cheap work outfit you need. Savings ? Forgettaboutit. It’s not happening. Your entire focus is on hitting your monthly nut for school debt , credit card and maybe a car or apartment. The crush of college debt has taken an entire generation of graduates, current and future out of the economy. Which is exactly why the economy hasn’t grown and won’t grow beyond microscopic growth rates we have seen so far.

So until we get the meltdown in college education, don’t expect much improvement in the economy. Who gets elected won’t make a dang bit of difference.”

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3 Ways to Get your Degree and Avoid Crazy College Debt

diplomabiggerA recent article from WalletPop says that college debt is worse than ever right now. As college tuition drastically increases and graduates overestimate their annual incomes post-college, recent grads are left with heaps of student loan debt that they can’t just discharge in bankruptcy.

So, what are ways to avoid getting caught in this messy web of debt? For one, you can try to avoid it in the first place with these measures:

1. Scholarships Scholarships Scholarships

One of the easiest and best ways to avoid student loan debt is to find scholarships. Apply to as many scholarships as you are eligible for because you have nothing to lose.  Scholarship money is good money because you don’t have to pay it back–no interest, no nothing!  If you make a Cappex profile, you will be matched to all the scholarships in the database you are eligible for–start there!

2. Choose a Practical Major

If you are losing sleep at night about paying off your student loans, then maybe it’s time for a major change.  Yes, that was a pun. We are strong believers that you should follow your passions in life, but if the idea of paying off your student loans is causing premature wrinkles on your forehead, you might consider a college degree that is more likely to land you a job. We did a post on college degrees to land a job earlier, and some of those degrees included:

Registered nursing

Accounting

Computer software engineering

and plenty more here.

3. 1-2 Years Community College

The 1-2 year community college trend is becoming increasingly popular as college tuition is on the rise. Community college might not be your dream school, but spending a few semesters taking care of prerequisites at a community college can save you tons of money on tuition. Just make sure to double check that there’s an articulation agreement with the 4-year university you plan on eventually attending.

One example is the articulation agreement that the Illinois Institute of Technology (IIT) has with Oakton Community College. Students who take their first two years of college at Oakton and earn Associate of Arts and Science degrees are guaranteed admission to IIT. Students who want to take advantage of this program need to apply for it before they start their freshman year and meet minimum academic standards. The program saves students $40,000 over two years.

You can read more about how a year or more of community college can help you save on college here (go to page 19).

Do you have any tips on avoiding college debt? Comment and let us know!