Free Money is Killing our Economy

The concept of students loans, let me give you “free” money now and don’t pay until you graduate, is at a minimum setting our young people up to carry a heavy debt load and in the worst case will become such a burden on them they will not be able to become the consumers the economy needs and the economy will suffer.

The lure of “go into debt now and pay it back when you make the big money” after you graduate is putting the majority of our young people in financial chaos by the time they are 25. For every young person that “makes it big” and starts out at a salary of $50k or more there are a dozen more working for $10 to $12/ hour because they cannot find a job with their educational background. If you don’t believe me look around you and you will see them struggling.

A typical young couple in their mid-twenties who both recently graduated from college and are just starting out in their married life have enough student loan debt that the payments are equal to a house payment, except they don’t own a house. Now they need cars, a home, etc. The dream has turned into a nightmare.

The truth is you cannot break laws that are put into place and win. The fact is that “the borrower is a slave to the lender”, even if the pain is delayed for a season. How do supposedly mature adults come up with these “immediate gratification” programs and not realize someday the participants will have to “pay the piper”?

Whatever happened to “pay as you go”? If you are going to work for 40+ years, does it matter if you get into your chosen career by 22? Can you survive if you don’t finish school until you are 25 or 26? As a person that has been involved in recruiting for 20 years, I find someone in their mid to late twenties with a degree and also a number of years of working experience in the field a much better candidate than a 22 year old with a degree and no experience.

My biggest concern is that we are creating another bubble in the economy. Student loan default could be the next bubble that bursts. We need to stop this foolishness now.