Debunking the “Marketing Lie” of Higher Education: Student Loan Payments Resume
As the looming date for resuming student loan payments approaches, personal finance expert Ken Coleman is taking a critical stance on what he calls the “marketing lie” surrounding higher education. In a recent interview on “Cavuto: Coast to Coast,” the host of “The Ken Coleman Show” expressed deep concern for those who expected their student loan debts to magically disappear.
Coleman’s apprehension stems from the belief that only a “small percentage” of borrowers seized the opportunity of the interest pause to prepare for the impending financial burden. He acknowledged the absence of concrete data but pointed to the persistent rise in credit card debt during this period as a worrisome sign.
For over three years, federal student loan borrowers have enjoyed the relief of no monthly payments. However, this pandemic-induced pause has now reached its conclusion, setting the stage for a potential financial shock for millions of Americans.
Approximately 44 million borrowers in the United States were impacted by this payment pause, which initially began in March 2020 at the onset of the COVID-19 pandemic. Despite eight extensions, the Biden administration has decided not to prolong the pause any further, courtesy of the bipartisan debt ceiling deal approved by Congress.
Coleman shared that they had received countless inquiries on ‘The Ramsey Show’ and ‘The Ken Coleman Show’ from individuals desperate for advice. His resounding message was clear: “Pay it off. The government is not going to get rid of your debt.”
With payments resuming in October, recent Federal Reserve data forecasts an average monthly bill ranging from $200 to $299 per person. However, some borrowers will face even steeper costs. The resumption of interest in September adds to the financial stress.
Coleman believes it’s high time to shift the focus towards Congress and the White House and address the root cause of the problem—soaring tuition fees. He argues that the skyrocketing cost of education has become a lucrative business for state governments and their economies, funded by federal student loans, while the American people bear the brunt.
“The answer lies in the unbelievable skyrocketing tuition. It’s big business for these state governments and their economies to have colleges and universities funded by these federal student loans. And the American people are the ones that are hurting. They’re taking too much debt out, and it’s ruining their lives—literally… No one’s talking about it in Congress.”
The ever-increasing cost of tuition has driven many students to rely on loans, but an unfortunate reality is emerging: a college degree does not always guarantee a brighter future. Coleman emphasizes that the longstanding message of “get a college degree for a better life” is no longer gospel truth.
According to a report from Georgetown University’s Center on Education and the Workforce, the cost of college and university programs surged by a staggering 169% between 1980 and 2020. In response to this, trade school attendance and other college alternatives have witnessed a surge in popularity, as more individuals question the value of a traditional degree.
Trade schools and programs like coding boot camps are thriving, while headlines suggest that corporations are often required to retrain college graduates for practical job roles.
Over the past decade, college enrollment has declined by approximately 15%, while the number of apprentices has risen by over 50%, according to data from the Wall Street Journal and the Urban Institute. Currently, colleges and universities enroll around 15 million students, while companies employ approximately 800,000 apprentices.
A recent study conducted by the Higher Education Advisory Group (HEA Group) has challenged the perception that the most popular college bachelor’s degrees lead to high-paying jobs. Surprisingly, the study found that the top 10 most popular bachelor’s degree programs did not necessarily result in the highest salaries.
While graduates in these fields earned over $40,000 annually, only business administration, registered nursing, and accounting boasted graduates with earnings exceeding $50,000 per year. Conversely, teacher education and professional development, along with majors such as psychology, liberal arts, communications, criminal justice, biology, health, and physical education, reported average salaries below this benchmark.
Coleman predicts a shifting landscape in education, driven by the realization that the traditional college degree path is no longer the only route to success. He asserts, “There’s a marketing lie that says a college degree is the only way to success, and that’s not true. Two questions young people and parents need to be asking: Is a degree the only way or the best way to get the future that I want? And if the answer is no, I got good news. Less expensive and less time-consuming alternatives are everywhere.”
In the wake of resuming student loan payments, Coleman’s message serves as a stark reminder of the changing dynamics in the world of education and finance. As borrowers brace themselves for financial challenges, a reevaluation of the value of a college degree becomes imperative.
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