Colleges are going to go bust, Mark Cuban sez

[Bob Of Burleson]

Mark Cuban Warns
That A Housing Bubble-Like Bust
Is Coming To America's Colleges

Myles Udland
BusinessInsider.com

In a clip on Inc.com, Mark Cuban says that colleges are going to go out of business.

In the clip, Cuban talks about the student loan bubble, which he says will burst and end badly for colleges.

The end of the student loan bubble, Cuban says, will be like the housing bubble, where tuition collapses the way the price of homes collapsed.

These collapses will put colleges out of business.

Cuban:

"It's inevitable at some point there will be a cap on student loan guarantees. And when that happens you're going to see a repeat of what we saw in the housing market: when easy credit for buying or flipping a house disappeared we saw a collapse in the price housing, and we're going to see that same collapse in the price of student tuition, and that's going to lead to colleges going out of business."

Cuban also talks about the impact student loan debt is having on the economy, saying that people burdened with student loans can't afford to spend money on anything other than the bare necessities.

There are a number of problems with the increasing cost of college both for the colleges themselves and the broader economy.

Cuban's specific call for a cap on student loan guarantees, and a subsequent collapse in tuition prices, portends an ugly future for colleges in the U.S.

The full clip of Cuban can be seen HERE.

Read more: http://www.businessinsider.com/mark-cub ... z35CrBXtPf

[crackertoes]

He makes sense.

And despite college being touted as the end-all for everyone, it's not. The demise of teaching trades to kids in high school is sad. It's hard to find young people are will work with their hands and become very very good at their craft. I miss fix-it-all shops and handymen who really are handymen, not just fly-bys with a hammer and a fast-print business card.

[dublusk]

I am completely shocked by young graduates with $50K in student loan debt and a degree in "underwater basket weaving" or some other useless major crying and wanting somebody to pay off their student loans? Do they not have any honor when they sign a note promising to pay back what they borrow? What did they expect when they got a useless degree?

[bodine]

There are several issues here. I'll address what I see at my community college. At my school, it only costs about $1600.00 a semester in tuition/fees to attend; add $600.00 for books. My campus does not have housing; so students and their parents borrow additional funds for living expenses. Lots and lots of our students opt to live in private dorms like a&m students, at rates ranging from $1,500 to $2,500 a month. To get in, kids and their parents borrow money. Or they over borrow to buy cars. Our student parking lots are full of late model vehicles; our students drive vehicles much nicer than mine. Or the parents take the refunds, because student loan rates are lower than credit card rates.

Private dorms are a growth industry; in the last 10 years at least 6 have popped up; with another under construction.

I can't speak to four year colleges; but I can speak to our tuition rates. They go up because the state keeps decreasing our funding. We are funded by a formula calculated by contact hours; and that funding has steadily decreased in the 14 years I have been here despite the fact that our enrollment has almost doubled. And the Dept. of Education and the State Higher Education Coordinating Board keep hitting us with unfunded mandates and programs, with which we have to comply, in order to receive federal financial aid and our annual fiscal funding.

We have to fund the growth required for new buildings or new campuses internally, that is by the tuition revenue we generate (we have the lowest property tax receipts in the state).

[bodine]

He makes sense.

And despite college being touted as the end-all for everyone, it's not. The demise of teaching trades to kids in high school is sad. It's hard to find young people are will work with their hands and become very very good at their craft. I miss fix-it-all shops and handymen who really are handymen, not just fly-bys with a hammer and a fast-print business card.

Isn't this due to the emphasis on testing in order to graduate high school? More academics, less workforce?

Maybe jello can weigh in on this. He is a high school educator...

[Mark]

Colleges charge a fortune and deliver very little in the way of value.

[bodine]

Colleges charge a fortune and deliver very little in the way of value.

There are very few objective measures of a college education. Students get out of their education, what they put into their education. One of the biggest values of a college educatin is learning how to function independently of ones parents. I deal with too many helicopter parents who still try to manage every facet of their student's lives. Students need to learn how to succeed, or to fail, on their own. It is possible to succeed after failing...

[Red Oak]

If the School goes Bankrupt are the Students Debts discharged ?

[Grassman]

Who will go broke first? My step son paying his college loans or the universities?

[Sangersteve]

At some point between the 60's and 90's someone started the myth that you could only succeed in life with a college diploma.

That lead to the death of high school vocational classes.

Some brilliant person decided that we no longer needed plumbers, or carpenters, or anyone who didn't mind getting dirty to make a living, all you needed was a masters in art appreciation.

Look at what happened, those guys with the sheepskin for ancient languages could not find a J O B.

So up pops DeVry and a hundred other trade schools, so the gal with a diploma in managing traffic flow could spend more money going to school learning a trade.

[Mark]

I've said it before and I will say it again...

The high school diploma of 50 years ago is more valuable than the college degree of today.

[BigTex]

Two/three words:

Federal bail-out

[PlanoSooner]

I am completely shocked by young graduates with $50K in student loan debt and a degree in "underwater basket weaving" or some other useless major crying and wanting somebody to pay off their 5YR FREE PARTY? Do they not have any honor when they sign a note promising to pay back what they borrow? What did they expect when they got a useless degree?

fixed it for you

[bodine]

If the School goes Bankrupt are the Students Debts discharged ?

No. Student loans are with private lenders; with government guarantees. Not dischargeable by student bankruptcy, either...