Something I’ve noticed the last week is that discussions on education have been popping up everywhere. Our economic system is facing collapse, and the main issues are all centrally connected to the way our secondary-education system is founded and unregulated. The payment of the tuition is resulting in the major collapse but no one wants to focus on it. You have parents taking out mortgages, the government heavily subsidizing tuition, and student lenders, all taking huge losses on college.

I mentioned this in an old post that was originally written in the middle of March, though it focused on only the government subsidization. The issue is not that government shouldn’t assist, but they are hurting themselves and the economy by not regulating school rates. Over a 30 year period they have wasted approximately $2.4 Trillion( with a T) on education. Meanwhile, college rates are rising doubly as fast that of interest rates.

The people who were taking out loans are hurting but if they claim bankruptcy that is only making it worse for everyone else. The students with 30 or 40 thousand dollars in loans are going to find it hard to pay back because of the weak job market, and the parents who took out mortgages are are probably hurting tremendously. Yet, today the NYT’s posted an article on how the lenders should be taking the brunt of this blow. By allowing the students to claim bankruptcy on these funds.

This article is fucking ridiculous( pardon my language) , this will allow for billions of dollars to be wiped from the slate. This leaves the lenders with no capital to provide for the future borrowers and no profit for their services. What needs to happen is a reformation of the collegiate system.

The problems of our current economic tumults are founded upon these 2 systems the collegiate and the lenders. They are the major issues that caused the collapse in the housing market collapse, outside of the pricing bubble. Colleges have been and will be taxing the lending system both private and federal, making it harder to produce revenues to reach the equilibrium needed. College is generally going to cost you more with less job security and lower standards of pay. Lenders are feeding on this fact for interest and fees.

So the point I’m trying to say, is that even if we find a way out of the housing bubble, we still have a huge problem. If we don’t do something to reform college funding we will see this strain the system to a point of another economic collapse. I can see this occuring anywhere from less than 5 years to 10-20 years from now, it will happen if we don’t do anything.