Higher education has turned into a predatory pyramid scheme.

#1 Edited by loco145 (10778 posts) -

Higher education has turned into a pyramid scheme.

Many say student loans are worth it because in the end, one receives an education and is able to acquire a job to pay off the loans. However, according to a recent Forbes article, paying off student loans may not be so simple.

According to Bill Hazelton, founder of CreditCardAssist.com, “higher education in this country has turned into a giant pyramid scheme.”

“With tuition prices exploding, students are graduating with up to $200,000 (or more) in student loan debt and can’t find jobs that could possibly support their loan payments, let alone their living expenses.”

Hazelton characterizes the student loan industry as predatory. He blames unfettered capitalism for this problem and believes for-profit colleges are particularly problematic when it comes to predatory lending.

“What these schools do is go after anybody they can get their hands on, securing them federally guaranteed student loans to fund their tuition prices. It’s like a free-money gold rush for these dubious schools,” Hazelton said.

Source.

#2 Posted by Masculus (2869 posts) -

Not possible to default also, so I hear. It's a recipe for a shitty future for plenty of people.

#3 Edited by lamprey263 (24224 posts) -

It's a scheme, and it's predatory, but I wouldn't label it a "pyramid scheme". A higher education racket share's similar characteristics in that they're making people take on debt and pay out of pocket for the school's financial benefit without actually giving people what they want out of an education, which is a track to a career. But it isn't a multi-level tiered system where people on top take advantage of people below them, there's just the university and then the students, but I digress.

I don't put all the blame on the education system, after all it's many of the students who taken on educational pursuits that lead to dead ends and it's not entirely the fault of the university. Lots of students go straight from high school to college without an idea of what the working world requires of them as far as skills and education requirements. When I was in school people didn't really have goals of what they wanted to be and just ended up taking various courses in what interested them, then by junior year they'd just fast track to the quickest or easiest degree possible without any thought to the consequence of what career (or lack thereof) that education might lead to.

Schools are also cheating students out of the job in other ways. I remember my university got a materials testing lab funded by like Lamborghini and Boeing, they get a nice tax break for their contribution, the school gets the lab, but all this ends up doing is outsourcing jobs from those companies. Undergraduate students, graduate students, and doctoral students end up paying to go to school to do research, and the school in turn gets the intellectual property procurement and hands it off to the companies that made the donation in the first place. So in the end the company doesn't need to hire staff for research and development because students will pay to go to school and do the research for free (well, at their own expense), and in the end the company gets the goods, and they don't have to pay a cent and get donation tax breaks and are free of the cost of hiring R&D staff, and in the end the student doesn't have a job because they've been outsourced to universities, then they have all that debt on them... it's fucked up.

I remember when I was a student before that happened I heard of some schools in other states were holding demonstrations against this very thing in other parts of the country. Students doing research at the university were displeased that the research they were working on were going to companies that made sizable donations to university departments in exchange for intellectual property assets being handed over to them with no additional benefit going to the university or the people who worked on the research.

#4 Posted by achilles614 (4858 posts) -

Tuition prices are absolutely ridiculous. Luckily I'm going to a reasonably priced in-state school, I'm hoping to have at most $50,000 in student loans after finishing my BSc and then PhD.

I have some friends taking on loans to study things that currently pay pretty poorly, I know it's impossible to predict which job will pay well in 10 years but at the least I would try to go into a field like education, medicine, engineering etc, things that we always need pretty much. A BSc in pure physics is not something I would take out large loans for (if it is the person's terminal degree) as it really prepares you for very little (except to study graduate level physics).

I think the main thing wrong with how higher education is handled today is that children are led to believe that they must attend college to have a meaningful life, which just isn't true, happiness doesn't come from green paper and certainly not from student loan debt.

I'm studying electrical engineering and from time to time people want to let me know how "everything is being outsourced", it doesn't bother me because I chose this study path out of interest and passion, not for the pursuit of larger wages.

#5 Posted by lostrib (37732 posts) -

We get it, you don't like college. Let it go

#6 Posted by jimkabrhel (15420 posts) -

Much of the increases in tuition have been driven by the excessive number of overpaid administrators, plus the overdependence on athletics at the larger institutions. There isn't a real focus on education anymore, just prestige. This is coming from someone in the higher education system. If the focus was more student-oriented, and on their education and career aspirations, the system wouldn't be so out of whack.

#7 Posted by Netret0120 (2207 posts) -

The American dream is to get you broke. Spending 12-15 years of life going to school/college just to have a $100k debt that you might only pay off after another 10 years so the first 30 years of your life you are leading a tough life.

Colleges are more about prestige and money now. I suggest people move abroad for education.

#8 Posted by Korvus (3972 posts) -

Man, that's harsh. From what I gathered, here in the Netherlands (only been living here for a bit over a year, went to college in Portugal so I'm not exactly sure of the details) you only pay back your student loans on a rate according to what you make. My wife left college and opened her own company, and since in the first few years she wasn't making all that much until the business kicked up (a bit over 1K €/month) she was paying like 10€/month on her student loans.

I'm also fairly certain that here, after a certain amount of years have passed, you stop having to pay back the loans, regardless on how much you'd still have to pay back.

#9 Edited by wis3boi (31472 posts) -

@lostrib said:

We get it, you don't like college. Let it go

#10 Posted by LJS9502_basic (151458 posts) -

Turned into? Nope. Higher education used to be for the wealthy....now it's available for others. Don't attend.

#11 Posted by Trender_man (137 posts) -

can't relate, european

#12 Posted by foxhound_fox (88743 posts) -

Which is why one should get a job in high school, figure out what they are interested in, and not pursue higher education unless they know it's related to the field they want to go into.

There are numerous industries in North America that are always looking for hard-working, high school graduates (trades, trucking, manufacturing) that require significantly less investment of time and money in skills training (most truck driving training courses are 240 hours (six weeks), cost $8000-10000 and offer included license tests and job placement).

The whole idea of "if you don't go to college, you'll be flipping burgers for the rest of your life" is a huge problem. Even if one works at McDonalds out of high school... if they remain motivated and take on training and advancement courses, they can become a manager in a couple years, and penetrate the corporate part of the company in 5-7 years.

#13 Posted by Aljosa23 (25131 posts) -

For profit schools should be illegal.

inb4 free market or "just don't go to them" or other retarded arguments

#14 Posted by Dogswithguns (10786 posts) -

Nothing is free come to think of it.. you can't just make tons of money out off thin air, how the world works.

#15 Posted by joehult (366 posts) -

I'd rather take the 200,000 and invest it, or use it to start a small business.

#16 Posted by IMAHAPYHIPPO (2604 posts) -

Somebody really didn't have a great college experience. I, however, graduated into my dream job... So, it certainly has its value, expensive or otherwise.

#17 Posted by Shmiity (5149 posts) -

It definitely is a fucked up scenario. I'm lucky, because my student loans will be less than 5,000. The people who rack up 40,50,100+ grand in debt... good luck. Higher education in the USA is a fucked up place when it comes to cost. Especially when a lot of entry level positions start at 30k. Even very respectable careers, like teaching, start at very low salaries. How can you even pay an 100k debt? You're totally screwed.

#18 Posted by wis3boi (31472 posts) -

@Dogswithguns said:

you can't just make tons of money out off thin air, how the world works.

Well, you could....but some suits would be knocking on your door

#19 Posted by IMAHAPYHIPPO (2604 posts) -

@foxhound_fox said:

Which is why one should get a job in high school, figure out what they are interested in, and not pursue higher education unless they know it's related to the field they want to go into.

There are numerous industries in North America that are always looking for hard-working, high school graduates (trades, trucking, manufacturing) that require significantly less investment of time and money in skills training (most truck driving training courses are 240 hours (six weeks), cost $8000-10000 and offer included license tests and job placement).

The whole idea of "if you don't go to college, you'll be flipping burgers for the rest of your life" is a huge problem. Even if one works at McDonalds out of high school... if they remain motivated and take on training and advancement courses, they can become a manager in a couple years, and penetrate the corporate part of the company in 5-7 years.

All of that is very true, but what the original poster is completely ignoring -- because I'm assuming he blew a bunch of money and hates his job -- the fact that college can lead to some very lucrative things that can't be achieved without a diploma. The problem is so many people think their work is over when college is done and have the mentality -- "I did all the work, now I should just be handed a job." College is a jumping off point designed to harness a trade or a skill so that graduates can work hard to turn it into a career.

College is expensive, but it opens up many doors not achievable without going. If all you care about is making money and don't care how you do it, screw college, but if you want to do something in a specialty field, college can be very necessary.

#20 Posted by musicalmac (23036 posts) -

Don't let extreme cases distort your vision of the norm. The ethics of encouraging students to take on that "crushing debt" is a hotly debated topic. Attempting to paint all colleges as predatory pyramid schemes is foolish.

#21 Edited by Enfamous_Mr_BHC (146 posts) -

I think the biggest issue is what is education in general trying to teach us. I feel like there needs to be some reform or modification to the educational system starting at 7th grade. In Japan you are basically learning interest in the job market as well as getting educated on history, math and etc. In America it seems like you learn a bunch of useless shit then if you are blessed with an opportunity, you are asked to decide your future roughly after you graduate. A lot of parents do not guide their kids right, since a lot more middle class families can get college education a lot of the parents and guardians are uninformed and still have that delusional '90s notion if you go to college and complete it you're automatically given a job. So unfortunately young kids are put in college with no idea what they want to be and settle for something near end of their 4 or 5 years their to find something while racking up debt. It's a sad system for most however it works for some people.

#22 Posted by chessmaster1989 (29392 posts) -

Keep trying to justify your decision not to go to college TC.

#23 Posted by Master_Live (14853 posts) -

@chessmaster1989 said:

Keep trying to justify your decision not to go to college TC.

He said in another thread that he was a post graduate student.

#24 Posted by SOedipus (6815 posts) -

Plan ahead. Know what you want to do. Get the proper education for it (choose the right program). Work hard and you'll succeed. Don't go into some general arts degree and assume you'll have a swell career after you're all done. If you don't know what to do then don't go to college. Work and get some experience, travel and meet new people. If you don't know what to do, don't pick some worthless program and get yourself in unneeded debt.

#25 Posted by janeswife (10 posts) -

Move to Scotland, uni is free.

#26 Edited by wis3boi (31472 posts) -

@Master_Live said:

@chessmaster1989 said:

Keep trying to justify your decision not to go to college TC.

He said in another thread that he was a post graduate student.

maybe went to harvard, and pissed away 200k on a culture studies degree

#27 Posted by lostrib (37732 posts) -

@wis3boi said:

@Master_Live said:

@chessmaster1989 said:

Keep trying to justify your decision not to go to college TC.

He said in another thread that he was a post graduate student.

maybe went to harvard, and pissed away 200k on a culture studies degree

he claimed to get a full ride I believe, though he could have still pissed that away on a useless degree

#28 Posted by MakeMeaSammitch (3953 posts) -

@lostrib said:

@wis3boi said:

@Master_Live said:

@chessmaster1989 said:

Keep trying to justify your decision not to go to college TC.

He said in another thread that he was a post graduate student.

maybe went to harvard, and pissed away 200k on a culture studies degree

he claimed to get a full ride I believe, though he could have still pissed that away on a useless degree

basket weaving

#29 Posted by plageus900 (1082 posts) -

I guess it's a good thing I'm using the GI Bill, amirite OP?

#30 Posted by Netret0120 (2207 posts) -

Study overseas then. My university fees for the whole year is 11k including accomodation. At most university's in America that can't cover accomodation alone.

#31 Edited by CodingGenius (8118 posts) -

@LJS9502_basic said:

Turned into? Nope. Higher education used to be for the wealthy....now it's available for others. Don't attend.

The wealthy or exceptionally academically inclined. Now folks with no hopes of succeeding academically are signed up for $10-20k loans for a single semester at for-profit schools. It's a crying shame.

#32 Posted by magicalclick (22844 posts) -

Proud El Camino College student transfer to UCI for cheap. And I got the awesome GPA reset, which gives me high GPA as all the computer class is easy for me. Tahaha. Also UCLA graduate computer science degree is only 10k a year in 2010 for total of two years master degree. It isn't all that bad, really.

#33 Posted by magicalclick (22844 posts) -

Anyway, there are plenty of jobs that doesn't need higher education. Like sales or realtor. Of course, stuff like Computer Science is better with school to jump start the knowledge. Personally I am too lazy to study, so, having a teacher to tell me what to learn is much more effective for me. Of course, after school, I am on my own.

#34 Posted by JimB (241 posts) -

Higher education was a place to exchange ideas and receive an education to prepare you for a better job. That does not happen anymore. You can only express one point of view now days if you expect graduate. Students get sucked in to majoring in studies programs where is no calling for them in the private market. Since the governments backs the colleges they can keep raising the tuition all they want and give you a crappy product.

#35 Posted by MakeMeaSammitch (3953 posts) -

Harsh truth: I don't think people would complain about tuition costs as much if they got useful degrees.

#36 Edited by nomsayin (1141 posts) -

@MakeMeaSammitch said:

Harsh truth: I don't think people would complain about tuition costs as much if they got useful degrees.

This. Not saying the system isn't fvcked up, but honestly, have a little common sense. If you major in sh*t like "Gender Studies" you're most likely a dumbass.

#37 Posted by MakeMeaSammitch (3953 posts) -

@nomsayin said:

@MakeMeaSammitch said:

Harsh truth: I don't think people would complain about tuition costs as much if they got useful degrees.

This. Not saying the system isn't fvcked up, but honestly, have a little common sense. If you major in sh*t like "Gender Studies" you're most likely a dumbass.

I remember people on here arguing with me on whether a LGBT degree is useful or not :roll:

probablly the same people who can't find work with an unusable degree.