college costs

Does This Even Make Sense Anymore?

Dear Reader,

Some of the best advice of the past was found to be false – and sometimes disastrously so.

In the early 1900s, tapeworms were sold as a safe, natural way to lose weight.

Around that same time, heroin was created and billed as a good way to break a nasty opium habit.

This isn’t just a phenomenon of ages ago, either. In the more recent past (the 40’s and 50’s, to be exact), cigarettes were thought to be a healthy appetite suppressant and a good way to keep your teeth healthy.

Advice like this was all thought to be perfectly sound at the time, but in the light of current information, we now know they had results ranging from parasitic infection to addiction to death via lung cancer.

Nowadays, there’s one piece of time-honored advice that may turn out to be just as disastrous. It doesn’t involve disease or dismemberment, but if you make this choice, the consequences could be just as disastrous.

Even worse – if you’ve managed to escape from the far-reaching effects this choice creates, your kids might fall prey to it anyway.

This choice could leave your son or daughter saddled with deep, almost unsolvable debt – right as they’re about to begin their adult lives. Forget moving on and experiencing the relationships, growth, and freedom that come with adulthood – they’re more likely to hole up in your basement for the foreseeable future.

I’m referring, of course, to the choice to go to a pricey college and to pay for that experience with student loans.

You may be thinking this is hyperbolic. After all, higher education is commonly touted as the road to wealth, and if not wealth, then at least financial solvency, right? If that’s the case, how could this possibly be disastrous, even if it is funded by student loans?

I get it. When we were younger, student loans seemed like a harmless means to a supremely beneficial end. After all, not everyone has thousands of dollars stashed away for tuition, so what’s the harm in borrowing – especially when it’s a low-interest loan from a trusted institution?

Back In The Day

Boomers and Gen Xers borrowed money with the expectation of paying it back. They finished school, got their degrees, started jobs and paid down their modest debt a little bit at a time.

As more college-educated people entered the marketplace, the competition for jobs began to creep up, too. Suddenly, it was no longer enough to be qualified for a basic job – you now needed a specialized degree just to be considered, too. The folks who got their degrees in the 70s, 80s, and 90s began to feel the sting of this…

When it came time for their kids to enroll in college, these people turned from weary workers into paranoid parents. After all, if experience or a basic degree isn’t enough to get a good job, then everyone needs specialized degrees. A Bachelor’s Degree in Liberal Arts was no longer good enough? Then, by golly, their kids needed a Master’s.

This didn’t make college any cheaper, though. With more students and the need for deeper, more specialized programming, colleges have had to increase their offerings to stay competitive, and that spelled extra costs.

These costs translated into higher tuition, of course.

Did those higher prices make people stop and say, “This is crazy – we need to find an alternative solution”? No, it made them head straight to their school of choice’s financial aid department.

After all, if said school wants to accept you, they’ll probably find a way to help you pay for the ever-more-costly experience, right?

If I Can Borrow It, Then Why Shouldn’t I?

The problem with this thinking is one of immediate gratification. Just like in the mortgage crisis of 2008, if you let people borrow more than they should, it’s human nature to think, “Sure, I’ll be able to pay this back some day.

Then, with thousands of new buyers armed with loans, colleges can again increase their tuitions. It’s no longer about making sure they have programming that will help their students succeed – it’s about luxuries like on-campus movie theaters, gourmet cafeterias, and jumbo Jacuzzis designed to lure prospective students to spend their fat student loans there rather than anywhere else. (You may think I’m kidding, but these kinds of luxury facilities are even found at respectable state universities these days.)

The result of this is a collective college debt that’s hamstringing even the most conservative student. Sure, there are some kids who sign on for a couple hundred thousand dollars in debt, but even the average student graduates $29,000 in the hole.

These numbers are slowly, but steadily, rising, too. We may have a population that’s more educated than ever, but that’s not without a price. Student loan debt in the USA, for example, has reached an all time high of 1.6 Trillion dollars.

Some people think that wiping the slate clean of his debt is the answer, but you and I know that’s not a good solution at all. After all, debt isn’t magic – it can’t disappear into thin air. Someone will always be accountable for it, and if we erase or forgive this debt, that “someone” will be every single taxpayer.

There’s no simple answer to wiping out student debt, but we can at least stem the rising tide. In many cases, college is no longer affordable and accessible to all. Nor does it have to be. For today’s youth, alternatives like trade school, joining the military, or starting a business of their own may seem risky…

But when compared to starting life with very little practical knowledge and a grim debt in the hundreds of thousands, they don’t seem so risky after all.

When faced with the decision between a future generation so saddled with debt they can’t see a way to succeed, or a future generation who’s struck out on their own and found success for themselves, which do you think is the better answer?

The higher education system is not a one-size-fits-all solution. When it comes time to make choices for yourself and your family, don’t pick the option that feels best right now.

Pick the one that works today AND tomorrow.


Brian Rose

Brian Rose
Editor, Brian Rose Uncensored

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Brian Rose

Brian Rose is an MIT graduate, with a degree in engineering. Upon finishing school, he immediately began working on Wall Street. An advanced technical trader, Brian was trading a book of $100 million at the age of 22. He spent years on Wall Street, working in New York, Chicago and London. He made millions, but...

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