Student Loans & Ponzi Schemes
Is taking out large and burdensome student loans a Ponzi scheme-like scenario?
A recent Rolling Stone article by Matt Taibbi discusses the political machinations in Washington of student loans. Ostensibly a tool for Americans to level the social playing field – Federal student loans – became a pawn between the bickering branches of government and the two political parties. Though interest rates of loans were prevented from doubling, Taibbi points out that with extravagant building and infrastructure, colleges and universities have pushed the cost of advanced education out of reach of most students.
According to Atlantic, roughly 8% of college grads are unemployed – mirroring the national average. It appears that half or more are “underemployed” in temporary, menial labor or entry level jobs.
The stats are worse for law school graduates: 44% of the class of 2012 is in part-time, short-term or non-professional jobs. Almost half of law school graduates taking out loans that can approach $200,000 aren’t able to find jobs as lawyers. When I was in law school, my loans doubled overnight, so that the university could build a business school. What was a tradesmen’s local law school with affordable tuition is busy building fancy glass buildings, dormitories and amenities. Who’s paying for that?