Student Debt Affects Outcomes : Capabilities Determines Debt Crunch Results

This is an ongoing theme in higher education; everyone has to get a college education or they are doomed to be 'second class citizens'. What nonsense. What's really cruel is convincing the average student in high school the only way to succeed in life is to attend a college or university when most of the time a tech school is by far a better alternative solution and better suited to the students needs and capabilities.

Hey, what's wrong with just going out an getting a job and working hard to succeed? Learn on the job. Move forward on ones desires and ambitions is enough to succeed.

Anyone that has attended college knows most of those that are now trying to become educated to succeed are fight a losing battle, as the subject that they decided to study is worthless in the job market, and their personal abilities to study anything else, like the sciences or engineering, is beyond their intellectual capabilities. Goodness, the number is huge.

So the only thing they accomplish is acquiring a huge debt that will drag them down for decades.

Student Loan Debt Affects Borrowers Differently
Source: Andrew Kelly, "Who's Struggling to Pay Back Their Student Loans? (Hint: It May Not Be Who You Think)," Forbes, June 30, 2014.

July 11, 2014

A larger student debt load does not mean that a borrower is in worse shape than a person with less debt, writes Andrew Kelly, founding director of the Center on Higher Education Reform at the American Enterprise Institute.

While many see a higher student debt load as evidence of a worse financial position, Kelly writes that a borrower with only $10,000 in student debt could actually be much worse off than one with $60,000 in debt. In fact, a paper from Beth Akers for the American Enterprise Institute found little correlation between financial hardship and the amount of student debt owed:

• Akers found that financial hardship was highest among those who had relatively low levels of debt (debt below $5,000) and no college degree.
• Those with the highest levels of debt often had the least amount of financial hardship, because of their education levels.

Similarly, recent data from the Consumer Financial Protection Bureau indicates that student borrowers in default tend to be those with the lowest average debt balances.

One of the biggest problems in this area, Kelly writes, is that student loan programs encourage college attendance, no matter the cost, leading the government to subsidize failure. He points to the fact that 37 percent of undergraduate loans in the Stafford and Parent PLUS programs in the 2012-2013 school year went to schools that had six-year graduation rates of 40 percent and below.
Instead, Kelly says, the United States needs to institute policies that encourage students to enroll in more effective, and affordable, programs.