The Circle Jerk Business of Education
It used to be that student loans were need based and education was not bought and sold like a commodity. These days, neither is true. Remember when a bachelor’s degree was worth something? Remember when an MBA was worth something? But for a couple years we have constantly seen billboards and TV advertising for MBA’s and every other degree under the sun. This was part of the reason I left my MBA a few years ago, why bust my ass for something that has been stripped of its value and prestige?
It also used to be that student loans were for those who could not cover tuition, books, housing, beer and other expenses that result from working less and drinking more as a full-time student.
Between receiving a BA in History and working on an MBA, I took out some student loans through Nelnet. Fortunately I left school a few years ago and was able to consolidate my loans at 3.5%, an affordable rate to subsidize an education and a future.
But now students cannot consolidate for less than around 5% and because the price of education continues to increase, many students owe substantial amounts of money and are paying a mountain of interest.
Even though I have been out of school for several years and have my loans consolidated at the lowest rate possible, I still get solicitations from lenders eager to snag my loan.
But what was most disturbing was a solicitation from Wells Fargo offering a “Federal PLUS Loan.” The letter indicates that the loan is fixed at only 8.5% and financial need is not a consideration. Is being in school even a consideration for the loan?
The letter is actually aimed at parents of students and being 28 with no children means it doesn’t apply to me. But maybe if I called Wells Fargo and said I was planning on returning to school they would consider me for their low interest education loan.
Why not go back to school? According to the TV commercials it’s a win win situation, especially considering the higher costs and higher interest rates. The universities and lenders want their money so they are happy to guide kids through like cattle to get it. If a kid flunks out, that means he/she won’t be around the next semester to give the universities and lenders more money. And that means neither can get larger, get more kids and get more money. And that’s just not good business.
1 Comment
As a state employee I’m lucky enough to receive a waiver when it comes to tuition, but did that prevent me from receiving loan letters… no!! I think the universities are selling basic information to loan companies so they can solicit students regardless of whether they have scholarships or waivers. Sickening and a waste of paper.