Student Loans

It wasn’t too long ago that I graduated from university and whilst I appreciate the excellent work that most lecturers do and that my alma mater was stellar in what it provided to its students, the fact still remains that going to university doesn’t guarantee a bright future. As a matter of fact, it is criminal how so many jobs demand that you have the minimum of a Bachelor’s degree when that is never enough for you to find an entry level job in your field. Therefore, you are faced with the prospect of either racking up even more debt in order to secure your Masters or working in jobs that could be acquired with a high school diploma. It is also unfair that after 3 – 4 years of arduous studying (for those that even bothered to study hard), in exchange for the piece of paper that validates that we are degree-holders, we are awarded with a debt so big that it’s enough to initiate a start-up business. However, the most cruel joke of all is the fact that many before and after us have proven that you don’t need a degree to be extremely successful. All you need is a dream, what you nurture is your talent and combine that with the tenacity to fight through failures, the will to not concede defeat and some business acumen and you can actually earn thousands in income rather than generate the same in student debt. People may read this and think that only prodigies or the obviously talented are the ones that have such success stories. This is not the case. The problem is that very few care to discover their true potential, let alone be brave enough to tap into it to the extent that it becomes an avenue for income. In this article: http://www.dailymail.co.uk/home/you/article-1301921/Weve-gone-degree-Why-university-longer-passport-success.html there is a celebrity journalist who started to earn £18k only four months after taking a ten-week course in Journalism. There is also a 20-year old mentioned who is currently earning £22k although he only has a diploma in business and an A level in English. These and all the other stories appear to be modest cases of success in comparison to the likes of Steve Jobs and Mark Zuckerberg who are currently earning billions despite being university/college drop-outs. However, what both stories have in common are that NONE of these individuals have student debt.

Is University A Con?

Considering the number of people who find jobs that are completely unrelated to their degree or find themselves in odd, random jobs after university, it begs the question as to whether or not going to university is just an over-rehearsed rhetoric? If you ask a child what they’d like to be in the future, the answer will most likely be ‘lawyer’ or ‘doctor’. This way of thinking is not only unimaginative but it also ignores the fact that everyone is NOT academically inclined and there are other ways of being a success without having half the emotional and work-related grief of lawyers and doctors. Studying at university is a very expensive undertaking. The debt acquired afterwards doesn’t justify the often humiliating experience of scrambling for jobs which are always in short supply. Furthermore, it is too expensive a gamble to go to university in the hopes that you will eventually discover what you really want to do career-wise. It would be cheaper to go to a palm reader. However, with that being said, the system has been rigged to feed this vicious cycle of debt. Too many jobs are insisting that they want candidates with degrees which feeds into the whole idea that a degree is essential. There are many ways to acquire the relevant skills and experience in your field and since the constant slap in the face for recent graduates is that experience is required for the jobs they seek, then why isn’t the emphasis on this instead? Why isn’t the educational system programmed that if you want to learn a language, instead of labouring for hours in the classroom, you just spend all your semesters in the host country? Why aren’t there more apprenticeships, internships and vocational qualifications that are not only on par with university degrees but can substitute them in every career field? Why should you acquire so much debt from a government who ultimately expects you to reinvest your skills, talents and knowledge back into your country? A degree isn’t proof that a graduate has the common sense, intuitiveness or resourcefulness to do the job. At the very least, all it proves is that they can read and regurgitate what they’ve been taught. Therefore, for university students not engaged in technical fields, why don’t they have the option of doing all the relevant reading from home, each semester, and just show up to the exams on campus when required? Going to university works out brilliantly for those who can actually put their degree to good use. However, for those who don’t?

Big Business For The Government

Regardless of what happens, one thing remains certain and that’s the fact that the government will always stand to benefit. Here is a very interesting and comprehensive article about the ins and outs of the student loans scheme in the UK (http://www.lrb.co.uk/v37/n05/andrew-mcgettigan/cash-today). In effect, students will bear the brunt of the financial catastrophe caused by greedy bankers through their liability to pay back student loans with interest. The government will attempt to repackage and sell these loans to third parties in exchange for ready cash (so that they can cover their current national debt) while the third parties will profit from the interest students pay. Have a look at the extracts below:

After the election, the coalition awarded the contract for the feasibility study to Rothschild. The higher education White Paper published in summer 2011 stated that the ‘full range of options’ would be considered, ‘including retaining the loans on the government’s books, selling them outright to financial investors, or selling loans to one or more regulated companies set up to manage the loans.’……. The main aims of a sale, from the government’s perspective, were to reduce its exposure to the risk of non-repayment, and to lower national debt. We were told that the value for money of a sale would depend on a comparison of how much purchasers are willing to pay against an estimate of what the loans are worth…….. Higher education is devolved in the UK. The Department of Business, Innovation and Skills is responsible only for English universities and colleges. The administrations of Scotland, Wales and Northern Ireland have different policies on tuition fees. Scotland, for example, charges no fees to Scottish or EU students: those from the rest of the UK are charged £9000. The figure put on the national debt is obtained by adding up the nation’s liabilities – money owed – and subtracting the value of the assets owned. The net amount is ‘public sector net debt’. The government borrows to create student loans, but the loan is an asset…….

Here is another article which speaks to the effects of student loans on American students (http://www.cnbc.com/2015/06/15/the-high-economic-and-social-costs-of-student-loan-debt.html) with the following extracts:

Men and women laboring under student debt “are postponing marriage, childbearing and home purchases, and…pretty evidently limiting the percentage of young people who start a business or try to do something entrepreneurial,” said Mitch Daniels, president of Purdue University and the former Republican governor of Indiana. “Every citizen and taxpayer should be concerned about it. You wind up disadvantaged just as you begin. It has reduced the ability of our educational system to be a force for upward mobility, and for an equitable chance at upward mobility,” said Melinda Lewis, associate professor of the practice at the University of Kansas School of Social Welfare. “It is still true that you are better positioned if you go to college, but you are not as much better positioned if you have to go to college with debt. There is also the matter of “credentialism,” the trend in many professions to screen for ever higher qualifications for jobs that may not require them. A 2014 study by Burning Glass, a labor analytics firm, found that 42 percent of management job holders had bachelor’s degrees, but 68 percent of job postings required them. In computer and mathematical jobs, 39 percent of employees had bachelor’s degrees, but 60 percent of job listings called for them.

Studying at university has become a commodity. While we rack up debt under the notion that our studies will somehow create a brighter future, the powers that be use our debt for either financial leverage or profit.

Look out for the third and final part of this discussion. Don’t forget to share your views, give feedback or leave a comment.









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