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  • This video was made possible by Hover Student debt has crossed 1.5 trillion dollars

  • this year, making it the second highest debt just behind Mortgage debt.

  • It has even passed credit cards and auto debts.

  • And it seems like this number is only going to rise because tuition fees are growing every

  • single year.

  • So the main question is, why?

  • (why colleges are expensive)

  • When students decide what college to get into, they first look into the rankings.

  • So colleges do their best to rank themselves higher.

  • That's why they try to get the best professors, build the most attractive buildings and get

  • the nicest facilities.

  • And all that costs money, in fact, a lot of money.

  • For example, the salary of a professor ranges from 130 thousand dollars to several hundred

  • thousand dollars.

  • So hiring even 10 professors will cost the college several millions.

  • Building attractive campuses, getting nice facilities is just one side of the story.

  • Because maintaining such a gigantic campus with huge stadiums isn't cheap at all.

  • But without them, colleges understand that they won't get many students.

  • But it does not end there.

  • Most colleges have a big marketing budget to convince the 18-year-olds.

  • Who think they know everything but really understand nothing.

  • Why they should borrow a ton of money to get into their college.

  • Why their nice buildings and big stadiums worth every dime they are going to pay.

  • In other words, colleges are run exactly like businesses.

  • But what sets them apart is that they aren't ordinary businesses.

  • First of all, colleges or universities aren't obligated to pay any taxes.

  • Even if they earn more than some of the biggest companies in the country.

  • But that's not a big deal.

  • Because the real problem is that, the government is making it easy for every high school graduate

  • to get a student loan.

  • And most of these students borrow huge debts without understanding how these debts work.

  • And what separates student debt from other types of debts is that there is no way around

  • it.

  • Even if you declare bankruptcy, you still have to pay it.

  • And that's what creates the problem.

  • So when colleges know that these kids who just graduated from school can borrow huge

  • loans to study.

  • And their debt is going to be paid for sure sooner or later.

  • They will build even fancier campuses, bigger stadiums, more facilities and will spend even

  • more money on marketing to attract these students.

  • Which will keep driving the cost higher.

  • In the 1980s, per year tuition fees used to cost 3400 dollars or 10200 adjusted to inflation.

  • But the exact same year today costs over 34 thousand dollars.

  • Schools are getting more expensive not because they are improving the quality of education.

  • But rather they are spending more and more money on things that don't really matter to

  • persuade the 18-year-olds to take large loans that will hunt them for the rest of their

  • life.

  • The problem with student loans is that.

  • Banks usually recommend you to make the minimum payment once you graduate and start paying

  • back your debt.

  • But that minimum is too small to make any difference because it doesn't even cover

  • the interest.

  • And in a matter of few years, you will find yourself paying hundreds of dollars every

  • single month.

  • But your debt is still growing.

  • And now there are 44 million young people all across the United States with an average

  • debt of 37 thousand dollars.

  • The educational system suppose to be the mechanism that lifts people out of poverty.

  • But it seems like in the last few decades, it has been serving a different purpose, dragging

  • people into the loans that they cannot afford.

This video was made possible by Hover Student debt has crossed 1.5 trillion dollars

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A2 debt student borrow tuition student debt college

Here is Why College is a total SCAM

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    Summer posted on 2020/10/30
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