The college bubble–poof!
A quiet economic storm, or more likely a hurricane, has been brewing for several years now, and it’s gaining more strength every day. After the Dot.Com bubble burst in the early 1990s, we were shocked. Then along came the housing bubble and folks started losing their primary assets: their homes. Black people lost more than $1 trillion in wealth, when housing values dropped. Yes, it was the result of dishonesty and greed among borrowers and lenders alike, but the vast majority of us are suffering from it nevertheless. Well, it looks like the next bubble to burst will be the college bubble.
Currently college debt is nearly $1 trillion, and has “outpaced credit-card debt for the first time,” according to a New York Times article. Unlike credit-card debt, however, college loan debt cannot be discharged by bankruptcy. Can you imagine current college students, 20 or 30 years from now, trying to pay off their college loans while at the same time trying to pay for their children’s college education? Unless those parents write a best-selling book and end up in the White House, like the Obamas did after accumulating an estimated $120,000 in college debt, that will likely be the case.
College grads have an average of $25,000 in debt when they begin looking for jobs that do not exist. Starting salaries for college grads continue to fall, with liberal arts degrees being the worst, dropping 8.9 percent between 2009 and 2010 to $33,500. Who do you think has the most liberal arts degrees? Who do you think has the most need for college loans?
Black folks are at the bottom of most categories when it comes to employment, income, and wealth; college degrees are declining in value while tuitions are skyrocketing in price. This convergence of economic realities does not bode well for us when the college bubble bursts. So what do we do?
First of all, we must get more involved with our children’s education at an early age. We have turned our youth over to someone else to educate, or baby-sit in some cases, and now we are paying dearly for their lack of information, inferior education, and excessive dropout rates—not to mention their incarceration rates. Parents are the primary educators of their children—at least they should be. Instill in them the value of doing their very best in school, from elementary through high school. It’s too late to do that when, and if, they reach the 10th or 11th grade.
Second, we must start preparing them early for their SAT and ACT tests, not just those graduation tests many are being taught. Rather than being taught how to learn, by using their critical thinking and analytical skills, our children are being taught how to pass a graduation test that, in many cases, only makes the school system look good and receive more funding.
Meanwhile, the students are faced with entering college or the work force ill-equipped to deal with the financial issues of today’s dog-eat-dog world. ACT and SAT scores carry a lot of weight, when it comes to scholarship awards and acceptance to various universities.
Finally, start searching for scholarships early, especially those offered in your local area. Become familiar with what is offered from various organizations and the criteria to which students must adhere to receive scholarships. Apply for as many that relate to your child’s field of endeavor.
There are many scholarships that are left untapped, especially by Black students who simply did not know about them or procrastinated and missed the deadlines.
Of course, it’s always best to start saving some money, no matter how little you have to put aside, because the college bubble will burst, tuition costs will continue to rise, jobs will continue to disappear, and Black folks, as far as we can see, will continue to lag behind when it comes to economic empowerment in this country.
As for jobs and business opportunities for our young people when they graduate from college, don’t forget about the “BRIC” countries: Brazil, Russia, India and China. I don’t know about you, but I have recommended Brazil to my daughter, who is a freshman at Howard University.
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The failure the Congress’ “Super Committee” to come to a resolution on the nation’s budget deficit is not a surprise. They were supposed to reach $1.2 trillion in budget cuts before Thanksgiving or mandatory “across the board” budget cuts would “trigger” to “automatically” reduce the budget.
I think it was a ploy all along to get past the debt-ceiling stalemate that allowed both parties to save face, in the face of a government shutdown. They kicked the can down the road, and now down the road is here.
A lone heckler didn’t stand a chance at a House of Blues fundraising event for President Barack Obama in West Hollywood. Shortly after Obama thanked actor Jesse Tyler Ferguson of the television series, “Modern Family,” who introduced him, and recognized the presence of Lt. Gov. Gavin Newsom and West Hollywood Mayor John Duran, the heckler shouted something about “The Christian God is the one and only true living God, the creator of heaven and the universe.”
OK, enough of this machismo bravado over money the United States of America already owes.
Here’s the skinny: if there is no miracle on Pennsylvania Avenue by or before Monday, Aug. 1, President Barack Obama will change the entire game by invoking the 14th amendment authority to always pay America’s debts. As commander-in-chief and the highest ranking elected official sworn to protect and defend this country, President Obama will cite this debt-ceiling crisis as a challenge to America’s national security interests, and take charge.
Discussions of the fiscal cliff also include discussions about ways to change Social Security and Medicare benefits in order to save money. One of the proposals is to raise the Social Security retirement age to 70.
After all, some argue, there is nothing magic about 65 or 67, so why not push the rate up to 70?
The difference is the kind of work we do. I can’t imagine that I will ever stop talking and writing, advanced age notwithstanding.
Ignorance is not bliss. However, there are too many of us who are ignoring the discussion about a legislative maneuver known as “Sequestration.” This is also known by a more descriptive term, “fiscal cliff.” (Federal Reserve Chairman Ben Bernanke coined the phrase.) Unless this is updated, all financial rules and budgeting will come to a halt on Dec. 31, 2012. Let me tell you about a few of the programs that are at risk.