How This Great American Dream Is Turning Scam

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Here's a question for you: Has higher education become another great American scam?

I'm not talking about the rich getting scammed. They get what they pay for. They can afford to be scammed – they know what's up.

A lot of rich people send their kids to expensive private colleges hoping they'll get a good education that will lead them into their chosen careers. If they haven't chosen a career, rich parents are more than happy to give their kids the "experience" of college, with all its social aspects, country club accommodations, and alumni status.

But then there are kids who want a higher education because they believe a college education is their ticket to gainful employment and well-compensated careers. They pay for it themselves, or their hardworking parents cosign on loans or take out personal loans on behalf of their kids' college dreams.

For them, higher education is increasingly looking like a scam….

These Aid Programs Only Add to the Debt Burden

Some critics complain that this is students' own fault, that they're pursuing the wrong majors. Or they say that colleges themselves are lacking, that they're not teaching what kids need to know in our ever-changing economy.

However, my problem isn't with education or kids' choices. Today I'm telling you where my beefs are – and why they're costing today's kids and their parents billions…

My first beef is with the come-ons that lure kids and their parents who can't afford college into indentured servitude.

Personally, I don't get what costs $10,000 a year (which is dirt cheap these days) or $25,000 a year. And I especially don't get what costs $50,000 and higher a year.

Maybe if kids were guaranteed jobs that allowed them to pay off their loans, those crazy costs might be justifiable.

But there's no guarantee on jobs, and so those costs aren't justified.

Half of all kids who recently graduated colleges and universities are unemployed.

Outstanding U.S. student loan debt now exceeds $1.2 trillion.

Students are saddled with an average of more than $21,000 in debts. This takes into account both those who got out relatively early without a degree and graduates who can owe $100,000 and more – well into their 50s.

And now they're being victimized by secondary scammers.

My second beef is with these "debt help" outfits that promise borrowers help and end up ripping off those least able to afford such scams.

Join the conversation. Click here to jump to comments…

About the Author

Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Short-Side Fortunes, Shah shows the "little guy" how to make massive size gains – sometimes in a single day – by flipping large asset classes like stocks, bonds, commodities, ETFs and more. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

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  1. Curtis Edmark | July 18, 2014

    My son in law had a large student loan. They had to move in with us for a year to pay if off.

  2. Hapuna | July 18, 2014

    It is and has been a scam for decades. This is not a new scam. The only difference is that the colleges are asking for a bigger percentage of income from the students after they graduate. Our economy is unable to employ those graduates. Well, the run of the mill graduates. The rich kids will find work in Daddy's corporation or one of his friend's corporations. There has always been a clique of the privileged who have friends who have positions.
    But the average student who worked hard for his degree and has huge student debt may not be so lucky finding a job. But the debt will still be there. Yes, it is a scam because the dream is just that. A dream. A nightmare.
    So, the answer is to learn a trade that actually produces products that are needed.

  3. William Miller | July 18, 2014

    IF not college, where are the best opportunities?

  4. H. Craig Bradley | July 20, 2014

    The alternative to going to college and getting a degree ( 33% of adults have one) is to get trade or technical training ( practical). Reportedly, this is where 50% of the good paying jobs are. Jobs like Welders ( $75,000/year), heavy equipment mechanics and technicians ( $100,000/yr) or Registered Nurses ( $80,000/year) all with just a few years of skilled work experience.

  5. craig steele | July 22, 2014

    There is definitely a shortage of craftsman in this country. I owned a union construction company and couldn't get any young men or women willing to learn a trade even when their pay package was substantial. It requires hard physical work which seems more than most young people are willing to commit to. You get paid to learn and still we had very few takers.

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