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how long until the student loan market crashes

brainhulk

brainhulk

Diamond Member
https://www.yahoo.com/finance/news/mark-cuban-warns-housing-bubble-160500202.html

It's inevitable at some point there will be a cap on student loan guarantees. And when that happens you're going to see a repeat of what we saw in the housing market: when easy credit for buying or flipping a house disappeared we saw a collapse in the price housing, and we're going to see that same collapse in the price of student tuition, and that's going to lead to colleges going out of business.
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Buh bye degree factories
 
Its going to crash, but not as hard as the housing market crisis... the main reason is depending on the type of student loan, it cannot be removed or eliminated through Bankruptcy and the debt stays with you for life so you cannot walk away from it. The colleges that may be closing are those pop up ones, online ones, and trade schools.

Student loans are also converted into structured investment vehicles to be sold to investors are traded like mortgage backed securities.
 
Long overdue.

At least half the people in college racking up debt have no business being there and are paying big bucks for a worthless degree.
 
and that's going to lead to colleges going out of business.
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And when it does happen, and it will, get ready for the media to start boo-hooing over it and showing all kinds of sob stories, which will in-turn force the federal government to bail the schools out.
 
small private schools will be the hardest hit. The big state schools have so many different revenue streams they will be fine after they downsize.


There will always be colleges. I dont think there will be too big of a momentum swing.
 
CPA said:
And when it does happen, and it will, get ready for the media to start boo-hooing over it and showing all kinds of sob stories, which will in-turn force the federal government to bail the schools out.
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CNN has been posting these sob stories for years now in preparation. My favorite was the couple who managed to rack up $230K in student loan debt so they both could get Masters degrees in social work, one of the lowest-paying professions in the country.
 
It makes me sick that so many people take out $100k student loans on art degrees and stuff that won't likely pay a reasonable salary.
 
Ship good middle class jobs out for decades: check
Tell people they have to go to college and get some kind of a degree or fail: check
Lend them insane amounts of money for said worthless degrees: check
System fail: check

We can send everyone in the US to college and we will end up with the most educated McDonalds employees in the world. We reap what we sow.

People who used to get good paying jobs in the US and now can't are going to college when they have no ability to be there. Waste of resources on all levels, but what else are they supposed to do now? Their choices of years past have been stripped out from under our noses while telling us that we will be better for it. Sure thing there skippy!
 
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I couldn't agree with him more and the sooner we deal with this, the better. Schools and their false economies have to be brought back to a real market. The current path is unsustainable.
 
Does this mean that universities are going to have to stop building townhouses for their students to live in (versus regular dormitories)? Could this possibly spell the end of $200 textbooks with a new edition printed each year so that your edition is useless after a year?
 
DrPizza said:
Does this mean that universities are going to have to stop building townhouses for their students to live in (versus regular dormitories)? Could this possibly spell the end of $200 textbooks with a new edition printed each year so that your edition is useless after a year?
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Those very two things you mentioned have happened at the university that my daughter attends. The 'townhouses' cost 2.5 times the price per semester that the dorms cost. As for books, the damn 'web only' portion that comes with books kills me. You cannot get the web only portion unless you buy it from the university book store WITH the book so it pretty much locks you out from buying outside the university. My daughter's books were $1300+ last semester because of that crap! 😡
 
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Engineer said:
Those very two things you mentioned have happened at the university that my daughter attends. The 'townhouses' cost 2.5 times the price per semester that the dorms cost.
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It is getting out of hand and sets the students up for even more disappointment when they graduate and have to live in their parents house or a sh!tty apartment because they are paying off those townhouse for 20 years.

Here is a great idea, let's teach our kids responsibility by making having them drown in debt as the first "adult" thing they do after stepping out of the family cocoon. That should work out marvelously!
 
PricklyPete said:
It is getting out of hand and sets the students up for even more disappointment when they graduate and have to live in their parents house or a sh!tty apartment because they are paying off those townhouse for 20 years.

Here is a great idea, let's teach our kids responsibility by making having them drown in debt as the first "adult" thing they do after stepping out of the family cocoon. That should work out marvelously!
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They aren't stepping out. They simply stay at home with mom and dad:

http://www.theguardian.com/money/2014/jan/21/record-levels-young-adults-living-home-ons
 
I hope the party continues long as possible. More than half of our revenue comes from colleges and universities. If you can't beat them, join them and profit.
 
Engineer said:
Ship good middle class jobs out for decades: check
Tell people they have to go to college and get some kind of a degree or fail: check
Lend them insane amounts of money for said worthless degrees: check
System fail: check

We can send everyone in the US to college and we will end up without most educated McDonalds employees in the world. We reap what we sow.

People who used to get good paying jobs in the US and now can't are going to college when they have no ability to be there. Waste of resources on all levels, but what else are they supposed to do now? Their choices of years past have been stripped out from under our noses while telling us that we will be better for it. Sure thing there skippy!
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^

check!
 
DrPizza said:
Does this mean that universities are going to have to stop building townhouses for their students to live in (versus regular dormitories)? Could this possibly spell the end of $200 textbooks with a new edition printed each year so that your edition is useless after a year?
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I split books with three other people in my classes. We all paid 25% and then shared it. As long as you pick the right people, this method works very well. I also bought old editions when the differences weren't substantial enough to warrant buying the new book. It did present challenges sometimes, but, overall, that worked quite well. I saved thousands of dollars on college textbooks doing this type of stuff.
 
My daughters finding this out. Freshman at a state school. First year cost right at 16k, luckily she got scholarships covering up to 10k. 5500k had to be a student loan. Wouldn't have been that high, if the school didnt require freshman to mandatory buy meal plans and such. That totaled about 5k. So after this year she shouldn't have to take out a loan. No, daddy wasn't paying and I make her work a job. Great thing is she is getting a Bachelor in Nursing and has a 4.0 gpa, so she has been hitting the scholarships that just opened up hard.
 
iwajabitw said:
My daughters finding this out. Freshman at a state school. First year cost right at 16k, luckily she got scholarships covering up to 10k. 5500k had to be a student loan. Wouldn't have been that high, if the school didnt require freshman to mandatory buy meal plans and such. That totaled about 5k. So after this year she shouldn't have to take out a loan. No, daddy wasn't paying and I make her work a job. Great thing is she is getting a Bachelor in Nursing and has a 4.0 gpa, so she has been hitting the scholarships that just opened up hard.
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She could have gotten an associates in nursing in 2 years, then had a job immediately making somewhere around $50k. Difference in pay for bachelor's degree vs. associates degree is almost zero. There are tons of RN to BSN programs out there that are quite affordable. With the pay after 2 years, it works out better in the long run, unless she plans to continue on for her MSN as a nurse practitioner or some other specialty. But some master's, such as healthcare administration, are almost useless unless you've already got your foot in the door and work your way up.
 
DrPizza said:
She could have gotten an associates in nursing in 2 years, then had a job immediately making somewhere around $50k. Difference in pay for bachelor's degree vs. associates degree is almost zero. There are tons of RN to BSN programs out there that are quite affordable. With the pay after 2 years, it works out better in the long run, unless she plans to continue on for her MSN as a nurse practitioner or some other specialty. But some master's, such as healthcare administration, are almost useless unless you've already got your foot in the door and work your way up.
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Yeah, we talked about all of those options, and for now a practitioner is her ultimate goal, but I'm sure the will change by graduation 2018. Her scholarships are guaranteed for 4 years, unless the grades drop. So, she might as well go the distance.
 
As long as taxpayers keep backing up student loans, the loans will keep getting bigger, and the cost of college will keep rising at hyper inflationary rates.

I predict million dollar college degrees in the future.
 
Hugo Drax said:
As long as taxpayers keep backing up student loans, the loans will keep getting bigger, and the cost of college will keep rising at hyper inflationary rates.

I predict million dollar college degrees in the future.
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It will collapse before then.
 
ponyo said:
I hope the party continues long as possible. More than half of our revenue comes from colleges and universities. If you can't beat them, join them and profit.
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They should come out with a College REIT type ETF.

CEIT. College Estate Investment Trust.

Imagine the fat dividends. 😀
 
Engineer said:
It will collapse before then.
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Only if the Taxpayer backing is pulled away. As long as 6% risk free loans can be handed like Candy to students.

I dont see that happening, because how is college supposed to be affordable if you cant take a 1 million dollar 6% loan? 😀 😀 😀
 
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