Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20
Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
From Trump’s TikTok Mess to US Tech Cold War against China - 7th Sep 20
The Federal Reserve vs. Judy Shelton And Gold - 7th Sep 20
Fed Dials Up Inflation Target…Own Gold - 7th Sep 20
Does Gold Still Have Plenty of Potential? - 7th Sep 20
CDC Shock Admission - THERE IS NO PANDEMIC! Over 90% of Deaths NOT From COVID19 - 7th Sep 20
Stock Market SPX to Gold/Silver Ratios Explored – What To Expect Next - 7th Sep 20
Is the Precious Metals Market really Overwhelmed and Chaotic - 7th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

The End of College Is Coming

Politics / Student Finances Oct 25, 2019 - 01:24 PM GMT

By: Stephen_McBride

Politics Every spring, millions of American high school kids are faced with this choice.

It sounds like a no-brainer. And it used to be a no-brainer... because college used to cost a reasonable amount of money.

As recently as 1980, you could get a four-year bachelor’s degree at a public school for less than $10,000, on average. These days it’ll cost you at least $40,000… or upward of $140,000 for a private school... or well over $250,000 for a top school.

Unless a kid has rich parents or a full ride scholarship, he must borrow a ton of money to pay for the privilege of attending college.


Education Costs… and Student Debt… Are Skyrocketing

A few weeks ago, I wrote about how America’s broken healthcare industry was bankrupting families. Well, the cost of college has jumped WAY more than the cost healthcare.

The cost of a four-year degree has shot up 15X in the past 40 years, as you can see here:



If car prices jumped as much as tuition, a base model Toyota Corolla would cost $90,000 today.

As costs have zoomed higher, kids are burying themselves under bigger and bigger piles of debt. Student loan balances have snowballed over 400% in the past 15 years. Last month, they hit $1.5 trillion:



If student debt were a stock, every Wall Street analyst would be screaming “bubble.”

And get this… Americans now owe more for student debt than they owe for credit cards and auto loans... combined!

In fact, the average kid takes out $35,000 in debt… a 75% jump in 10 years. That’s a deep hole to dig out of before you’re legally allowed to drink beer.

And student loans are the only type of debt you can’t escape, no matter what.

Declaring bankruptcy can wipe away your mortgage, your credit card debt, and even stop IRS wage garnishments. But it won’t take a penny off your student loans.

Turn 65 and haven’t paid off your student loans? They’ll raid your Social Security check each month.

What Do Healthcare and College Have in Common?

The government’s dirty fingerprints are all over both.

As you may know, the Federal government practically owns the student loan market.

More than 94% of all student loans come directly from the US government. And the small 6% slice that doesn’t come from the government is still fully guaranteed by the government.

If you’ve applied for a mortgage lately, you know it’s a painful process. You fill out stacks of paperwork, pay steep fees, and hand over a full accounting of your family’s finances.

But thanks to Uncle Sam, trillions of dollars in student loans get handed out to 17-year-old kids like candy on Halloween. This free money has warped the whole system and pushed college costs far beyond all reason.

Think about it this way: When banks were handing out no-money-down mortgages in the early 2000s to anyone with a pulse, what happened to house prices?

They SOARED.

Well, colleges know Uncle Sam is bankrolling students, so they hike fees year after year. A recent New York Fed study found for every new dollar of federal student aid, colleges hike tuition by 65 cents.

College Is America’s Most “Undisruptable” Industry

I wish I could tell you the whole college system is about to get sledgehammered by disruption…

But unfortunately, college has been America’s most “undisruptible” industry, unlike other industries I recently covered.

The vast majority of high school grads still go to college.

Once hailed as potential disruptors, for-profit colleges haven’t made a dent.

You’ve probably seen commercials for The University of Phoenix. It grew rapidly into one of the biggest and most famous for-profit colleges in the US. But enrollment has plunged lately. And the stock of its parent company Apollo Education Group (APOL) crashed 80%

Other for-profit educators like Corinthian Colleges and Indiana’s ITT Tech went bankrupt a few years back and their stocks were “de-listed.”

Despite the crazy cost, college is still worth it for many folks today. If you want to be a professional, like an architect, a lawyer, or a CPA, you pretty much have to go to college.

On the other hand, if you plan to study archaeology or interpretive dance, college is almost definitely not worth it.

There Are Promising Signs That College Is Changing...

Have you heard of Coursera?

It’s a website where students can enroll in courses from many of the world’s top colleges—like Stanford, Yale, and Princeton.

Want to learn how financial markets work from an Ivy League school like Yale? You can enroll for just 50 bucks/month.

In the past few years, over 40 million Americans took an online course. I’ve taken classes on public speaking from online learning platform Udemy. They cost ten bucks each and were excellent.

The world’s fourth-largest company Google (GOOG) now offers professional certificates on Coursera. You can get a “cloud computing” certificate in two months. Google has given financial aid to 10,000 students taking the course.

Here’s My Prediction for How the Disruption Will Play Out

It’s only a matter of time before Coursera and other online disruptors start offering real college degree courses.

What happens when you can get a bona fide online college degree—one that confers the exact same benefits of an in-person college degree—for a couple of thousand dollars?

The number of kids going to traditional college will crater. And schools will be forced to slash their tuition costs.

Many top American colleges are already making this shift. You can get a degree from Ivy League school University of Pennsylvania over the internet now.

The best part? Online tuition costs roughly half what you’d pay versus sitting in a lecture hall... even though the course material is identical.

Look, we’re barely in the first inning of disrupting education. Who knows, maybe in a few years the likes of Google and Amazon will open up their own colleges. You’ll get trained by Google for free. And when you finish, Google will charge companies to recruit you.

We Must Always Ask, “What Will the World Look like in Five Years?

Early signs are mounting that some traditional colleges are in trouble.

After rising every decade since 1890… the number of US colleges has fallen over the past 10 years. And the number of kids going to college has declined for seven consecutive years.

Top schools like Yale, Harvard, and Stanford will always attract elite kids and command huge tuitions. But online disruptors could put many of the 4,000 “middle-of-the-road” US colleges out of business.

The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money"

Get my latest report where I reveal my three favorite stocks that will hand you 100% gains as they disrupt whole industries. Get your free copy here.

By Stephen McBride

http://www.riskhedge.com

© 2019 Copyright Stephen McBride - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules