Next Level BS 47: The Real Reason College is Expensive: Wall Street BS

This week we follow the lead of one of our avid viewers, and take a deep look into his concerns about the serious BS happening in the University of California system, which is happening all over the country. It turns out that the rising cost of college tuition is not because of the rising cost of educating students; it's because of Wall Street bankers. We outline collusion, conflicts of interest, and outright fraud in the ridiculously bloated University of California system that is the direct cause of higher and higher tuition. Wall Street is profiting on both sides of the higher-education ecosystem through risky investment vehicles for the Universities that drive up tuition, and bigger student loans that are required for the higher tuition they've caused.




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The other 'game' they're playing is not letting your kid graduate in 'just' four years.

There's also a law that says a school that takes money from the government has to keep it at a certain %. So when that amount goes up for inflation by law tuition has to go up or the formula no longer complies and the school can't take government money any longer.

Its all a complete mess.

Anything and everything that the government and money are involved in is broken and corrupted to the point that it will never get better without a complete reset .when the government starts putting money into something there is someone who find a way to corrupt it and steal all they can. ...sadly the government knows all this happens and keeps all the loopholes open.

a reply to: theNLBS

Obviously, we should subsidize these universities to the hilt.

That should cause the cost of higher education to fall... right?

The government earns a tremendous amount of interest from subsidized and unsubsidized student loans. Is my perception incorrect? Government is all for higher tuitions. Higher tuitions equals higher loan amounts and higher interest earned by the government.

a reply to: theNLBS

"Wall Street is profiting on both sides of the higher-education ecosystem through risky investment vehicles for the Universities that drive up tuition, and bigger student loans that are required for the higher tuition they've caused. "

You like to use the term B.S. a lot and that's what your post is, pure B.S. I signed on just to comment here. I usually don't because, although I like a lot of the articles here I don't agree with the one-sided political slant (hey, how'd ya like your Libya bombed? Was that the idiot Bush? Nope, the puppet Obomber).

Here are the facts. The reason college costs went through the roof is BECAUSE of guaranteed gov'mint loans. THAT is what allowed the uni system in the U.S. to hike up costs and actually hire more administrators now than they have actual teachers. And EVERYONE who is still in the markets now trying to make money is "in risky investments" because the entire system is rigged. You should not even BE in the markets right now.

Your statement above is just a gauzy accusation railing against Wall Street. I am an anti-bailout person myself, but your statement is just pure idiot frat boy comment on economics, of which you know nothing. But I guess you can just mention Wall Street banks and use a full "B.S."s and that's all ya need, right?

You'll be voting for Killary, frat boy, so here's a list of her campaing contributors (hint: WALL STREET BANKS):

www.zerohedge.com...

Vote Elizabeth Warren or go home.

a reply to: theNLBS

Figured I'd mention it here as well, but beyond all the profiteering bull going on with wall street, what gets me is the student loan terms.

You can take out a student loan as early as seventeen in the US, for as much as is necessary to fund your education. These federal student loans come with the clause that they can be forgiven in the case of total permanent disability or death. But, what neither the loan counselors, or the loan servicing agency will ever tell you (I was trained to know this stuff inside and out and was never informed of this) is that even if you're eligible for forgiveness, and your loans are discharged and the balance zeroed out with the loan servicer, that amount becomes a tax bill. It's counted as unearned income for that tax year and you're required to pay taxes on it... In the case of your total, permanent disability or death.

The IRS has a much less flexible repayment schedule than any loan servicing agency, and you'd have to prove that everything you own is worth less than the amount of the loan to not immediately owe taxes on the entire amount discharged. Even if you're able to prove insolvency, you pay that amount in taxes in addition to what you'd normally pay, on the sale of any future resources you gain. It's a shakedown, and it's impacting the young, bereaved, and disabled most directly, not to mention the lending terms and coaching procedures are unclear.

The only recourse many have is to ask their loan servicer for an income sensitive repayment schedule, if you do become permanently disabled, rather than have it discharged to avoid the immediate tax bill. In that case, they're able to make very small payments for their entire life, but, the bill is NEVER paid off entirely, as the payments barely cover the capitalizing interest.

In the 80's and 90's I remember being constantly reminded that California had free tuition for residents in state college, and it used to come up all the time when we were paying for our children's education here in Massachusetts. Things have changed so much, and I am certain that the rising cost of college has a number of dubious factors, many of which have nothing to do with the need to provide a foundational education opportunity for our kids. To me, it is all about corruption, tricky deals and hidden agenda's that have crept into just about every other facet of our society, and I blame the Federal Government all the way down to state governments for making that so. We are facing a crisis that needs a solution. The costs to get a degree are so out of control, it will take real leadership to rectify it, and that is the most troubling aspect.

a reply to: shredhead1

I thought it was pretty much a given that folks understood the government profits from students going to school. The point is with education, EVERYONE, as a society, is supposed to profit. The government has been in education as long as there has been public education, with the rationale that it's a necessary infrastructure... Which... I'll buy to an extent.

What the OP focused on was the not quite as obvious gambling methods and wall street ties to higher education, which you failed to note despite your seemingly endless buzzword vocabulary.

Then again, you're highlighting a major failure in our currently underfunded public education system, which is now too reliant on regurgitation and standardization rather than critical thinking, a skill which would have been useful for you in processing the material folks are discussing around you. But I suppose if you swept out some of those canned phrases you'd have more room for new information.

a reply to: theNLBS
The real reason for the high cost of education IMHO is the ease of getting student loans. Last year, student loan debt exceeded $1 Trillion. Anybody can get a student loan so the institutes of higher learning realize that they can raise their tuition as much as they want. If the student wants to attend, they'll just get a loan for the higher amount.

The next big bubble? ...... Student loans!

So that's where all my tuition money is going...

I was quite surprised to find out in a thread I authored that most faculty members don't make very much money. In fact I had one professor tell me they would make more money as a public school teacher. Now that's screwed up. The supposedly more qualified professionals get paid less than their K12 peers, because that makes sense.

Beaurocracy is a B***. I thought I wanted to be a teacher then I realized I would be subjecting myself to the very system I have grown to loathe. All overrun with bureaucracy. Yay education!

Girard College in Philly is an excellent example of a failed institution.

Worth reading for people interested in this area.

www.philly.com...

We should also look at the Book situation. I have found that the Math books are the same just the pages have been rearranged so that a student has to buy a new book.

Our daughter is in college. High end cost. But what REALLY irks me is the cost of the books. A $300 math book? Really? Comeon. Freak'n college book mafia.

a reply to: FlyersFan

I have a daughter in college too. The Book situation is ridicules.

On top of that, people can hardly get jobs anymore without those damn diplomas.

I don't know how it is in the States but up here in Canada, it's getting worst. You can't even be a janitor anymore without their damn diploma...and no matter the job, they'll have to teach you everything again anyway!

I think we are forgetting here what the goal of the elites is, and that is to enslave us as quickly as possible. Debt is one of the best ways that they can get their claws into us. Not only does debt take the fight out of people, but it also instills FEAR. We are brainwashed into thinking that our credit score is the end all be all of life and that without it we can't buy anything. When people are in debt they are usually obedient in paying it off, not everyone of course, just those that don't know any better.


I'm not sure when the big shift happened in this country, sometime in the 80's or 90's, but it changed this country drastically. The shift I am talking about is the one where not going to college was no longer an option for anyone who didn't want to be a bum. The baby boomers raised their children with the candy coated notion that if you go to college you will make a lot of $$$ and be successful. What a joke this turned out to be considering that these days to get a high paying job you better have a graduate school degree along with another 100K worth of debt to get it. Now work your whole life to pay your loans off like a good little slave ie worker bee that doesn't ask any questions. Trade schools are having lower and lower enrollment and are even closing down all over the country. This is IDIOTIC, because plumbers, electricians, carpenters, car mechanics etc etc make MUCH more $$$ then some little worker bee with a bachelors degree. Yet, in today's society not going to college is looked DOWN upon. It's amazing how brainwashed this whole country is.

Why does it have to be a bad thing to not go to college? Not everyone is meant to go to college and that is totally Ok, yet these days you will be labeled as dumb and lazy LOL. Somehow TPTB did a great job convincing everyone that they need college to be successful and not be considered a bum. The outcome? Most all fields are OVER SATURATED with a bunch of 20 year olds with undergrad degrees who feel entitled to make 70k plus per year. The reality is that it is unrealistic. Now they go and get all the high school kids' jobs in order to start making payments on their student loans and live at home with mom and dad. Well done! What was accomplished? These graduates have LESS independent thought now ( because universities don't harbor independent thought ) and a crap ton of debt and will now get depressed. Yay, more people to get on pharmaceuticals to treat depression!


There are other ways to make $$$ in this country then by getting a sheet of paper you can wipe your ego with, it's time the USA relearns that.

a reply to: fltcui

You are correct and this is also a HUGE load of BS!

There should be minimum academic standards to get student loans. A high school student with a GPA of 1.7 obviously doesn't belong in college and should go learn a trade. Yet, he/she will get their loans and MAYBE get through college in 7 years with a GPA of 2.0. Where does that get them in the workforce? Sure does get them a lot of debt though.

originally posted by: asmall89
So that's where all my tuition money is going...

I was quite surprised to find out in a thread I authored that most faculty members don't make very much money. In fact I had one professor tell me they would make more money as a public school teacher. Now that's screwed up. The supposedly more qualified professionals get paid less than their K12 peers, because that makes sense.

Beaurocracy is a B***. I thought I wanted to be a teacher then I realized I would be subjecting myself to the very system I have grown to loathe. All overrun with bureaucracy. Yay education!

I took an economics class last year, it was taught by a man with a phd in economics. I became friends with the instructor and even did a bit of work for him. For a time he talked about his dream of getting 250k in the bank to retire on. Him and his wife combined (wife also has a phd), are both full time professors for the school. Combined they don't even have a 6 figure income after 30 years of teaching

I found that absolutely incredible to be that highly educated, in a significant field, and for their university pay to be so low.