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The Great College Hoax
Forbes ^ | 2009-02-02

Posted on 01/15/2009 10:10:48 AM PST by rabscuttle385

Higher education can be a financial disaster. Especially with the return on degrees down and student loan sharks on the prowl.

BY KATHY KRISTOF

As steadily as ivy creeps up the walls of its well-groomed campuses, the education industrial complex has cultivated the image of college as a sure-fire path to a life of social and economic privilege.

Joel Kellum says he's living proof that the claim is a lie. A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

Accepted into the California Western School of Law, a private San Diego institution, Kellum couldn't swing the $36,000 in annual tuition with financial aid and part-time work. So he did what friends and professors said was the smart move and took out $60,000 in student loans.

Kellum's law school sweetheart, Jennifer Coultas, did much the same. By the time they graduated in 1995, the couple was $194,000 in debt. They eventually married and each landed a six-figure job. Yet even with Kellum moonlighting, they had to scrounge to come up with $145,000 in loan payments. With interest accruing at up to 12% a year, that whittled away only $21,000 in principal. Their remaining bill: $173,000 and counting.

Kellum and Coultas divorced last year. Each cites their struggle with law school debt as a major source of stress on their marriage. "Two people with this much debt just shouldn't be together," Kellum says.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; Front Page News; Government; News/Current Events
KEYWORDS: bankinglist; college; creditbubble; cwsl; debt; financelist; financialcrisis; highereducation; moneylist; studentloans; uva
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Also, FTA:

"The two disillusioned attorneys were victims of an unfolding education hoax on the middle class that's just as insidious, and nearly as sweeping, as the housing debacle. The ingredients are strikingly similar, too: Misguided easy-money policies that are encouraging the masses to go into debt; a self-serving establishment trading in half-truths that exaggerate the value of its product; plus a Wall Street money machine dabbling in outright fraud as it foists unaffordable debt on the most vulnerable marks."

Getting a college degree isn't always a bad thing, but it's not always a good thing, either.

1 posted on 01/15/2009 10:10:49 AM PST by rabscuttle385
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To: PAR35; TigerLikesRooster; bamahead; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; ...
*Ping!*
2 posted on 01/15/2009 10:11:49 AM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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The Money, Banking, and Financial Markets Ping List.

"Money, not morality, is the principle commerce of civilized nations."
—Thomas Jefferson

FR Keywords: moneylist, bankinglist, financelist

Please tag all relevant threads with the aforementioned keywords.

This can be a very high-volume ping list at times.

Ping list jointly pinged by rabscuttle385 and TigerLikesRooster.

To join the ping list:
FReepmail rabscuttle385 with the subject line add  moneylist.
(Stop getting pings by sending the subject line drop moneylist.)


3 posted on 01/15/2009 10:11:59 AM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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To: qam1

ping!


4 posted on 01/15/2009 10:12:49 AM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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To: rabscuttle385
a self-serving establishment trading in half-truths that exaggerate the value of its product;

I love that line. And I couldn't agree more.

5 posted on 01/15/2009 10:13:54 AM PST by Flycatcher (Strong copy for a strong America)
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To: rabscuttle385

O boo hoo hoo. If each had a six figure income, then I’m guessing they were living the high life instead of paying off the debt. If they had lived on one of their incomes and used the other to pay off the debt, they’d be done with it by now. Silly people.


6 posted on 01/15/2009 10:14:09 AM PST by Mercat (God doesn't call me to be successful. God calls me to be faithful. Mother Teresa)
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To: rabscuttle385
A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

Swing and a miss!

7 posted on 01/15/2009 10:14:29 AM PST by Wolfie
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To: rabscuttle385

>>Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor’s degree in history.

A History degree? Perhaps, if he had studied something useful...


8 posted on 01/15/2009 10:15:19 AM PST by vikingd00d (chown -R us ./base)
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To: rabscuttle385
I concur with just about every point that is made in this article about the idiocy of taking on huge piles of debt to pay for "higher education."

I would recommend attending school on a part-time basis (and working on a full-time basis, or close to it) as one possible alternative to this scenario. I can't think of too many careers in which $140,000 of debt would actually be a good investment.

9 posted on 01/15/2009 10:16:02 AM PST by Alberta's Child (I'm out on the outskirts of nowhere . . . with ghosts on my trail, chasing me there.)
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To: rabscuttle385

Was there some reason this couple with two six figure incomes couldn’t live on one and use the other to retire their loan debt?

While I agree than higher education is now one of the biggest scams on the planet, this couple have only themselves to blame for poor decision making.


10 posted on 01/15/2009 10:17:23 AM PST by Valpal1 (Always be prepared to make that difference.)
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To: Wolfie

Beyond the fact that he received a BA that guarantees you’ll need to go to grad school unless you want to teach HS for peanuts, these people lived in LOS ANGELES—one of the most expensive cities on the planet. No wonder their six-figure salary went nowhere.

Why didn’t they take their fancy law degrees and move somewhere cheaper?


11 posted on 01/15/2009 10:17:42 AM PST by j-damn
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To: vikingd00d

Is profitability the only measure of usefulness?


12 posted on 01/15/2009 10:17:59 AM PST by swain_forkbeard (Rationality may not be sufficient, but it is necessary.)
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To: Mercat

“If each had a six figure income, then I’m guessing they were living the high life instead of paying off the debt.”

####

Unquestionably.

Oh, and the LAST thing this country needs is more “degreed” history graduates and lawyers.


13 posted on 01/15/2009 10:18:27 AM PST by EyeGuy
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To: rabscuttle385

Together, they make in excess of $200,000. If they rented a small apartment or paid on a small home and had low ownership cost cars to drive, then there is no question that this debt could be quickly paid off.

They are living expensive, rather than prudent, lifestyles.


14 posted on 01/15/2009 10:18:44 AM PST by ConservativeMind (What's "Price Gouging"? Should government force us to sell to the 15th highest bidder on eBay?)
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To: rabscuttle385
I went to a state engineering schools. Tuition was about $5,000 a year which I earned working as a TA and odd jobs. Housing was free as a RA and living in a frat (well, almost free).

Graduated with no debt. First year salary more than paid for all the cost college plus interest (ROI - 1 year).

Of course, I was a geek, spend many a weekend studying and my employer actually expects productivity and something of value.

15 posted on 01/15/2009 10:19:07 AM PST by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
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To: rabscuttle385

Nonsense. Nothing increases one’s bankability as surely as an education. With few exceptions there is no greater obstacle to earning potential than lacking education. For every billionaire dropout like Bill Gates there are a million earning $35,000 a year.


16 posted on 01/15/2009 10:19:21 AM PST by Melas
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To: vikingd00d; Wolfie

Each of you hit the real big issue!


17 posted on 01/15/2009 10:20:14 AM PST by ConservativeMind (What's "Price Gouging"? Should government force us to sell to the 15th highest bidder on eBay?)
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To: rabscuttle385

It’s true that it works for some and not for others. I hold four degrees (a Bachelors, two Masters and a Doctoral Level degree). At 46 I still have $59,000 sitting out there at 3.75%. Was it worth it? Yes. Why? Because I was able to get into ivy league programs and parlay them into a very high paying career.

To undertake that financial obligation for a soft science degree and masters or law degree from a third tier university and then to marry someone who did the same thing might not be an ideal financial move. It works on a case by case basis.


18 posted on 01/15/2009 10:20:19 AM PST by johnnycap
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To: j-damn

Los Angeles does indeed have a lot to do with it. I’m struggling too, because my rent is about 400% of the norm. But I love it here, so I just... keep struggling.


19 posted on 01/15/2009 10:21:44 AM PST by A_perfect_lady (History repeats itself because human nature is static.)
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To: rabscuttle385
A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

Where did this goofball get the idea that a degree in history would make him money?

This article is idiotic.

20 posted on 01/15/2009 10:21:49 AM PST by <1/1,000,000th%
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