529 Moon Shot

Save or Die

It's impossible to escape the temptation to compare student loan payments to mortgage payments. Both are methods of post-funding “American dreams” using either direct federal funds or rely heavily on federal guarantees. Both are highly profitable and “too big to (let) fail”. Both represent a de facto securitization of middle class salaries by a blend of federal agencies and Wall Street.

At least a mortgagor can sell their home in a healthy housing market to extinguish mortgage debt. The security backing student loans isn't so liquid: the salary of the college graduate. This asset, too, can be sold, but only in installments of time for decades.

My goodness, Eddie Smith has written a real barn burner about paying for college. As the father of two daughters (and hopefully more kids in the future), the skyrocketing cost of higher education infuriates me. The scenario that Eddie didn't discuss, and which I think is the most likely, is that as the country liberalizes, state-run colleges and universities become free.

While I agree with Eddie that it'd be bad for society to lose those in the liberal arts, I know far too many of my peers with Medevial Art History or Youth Ministry majors that cost $80,000-100,000 and earn all of $40-45,000/year. There needs to be some check-and-balance system so that people stop paying for degrees that they can never pay off out of their future earnings.

My wife and I are both unbelievably blessed that our college educations were paid for either directly or indirectly by our parents. My parents set up a business that I had to manage and then the earnings were mine to pay for school. I hope to be able to do something like that for my kids so they still have to work hard for their education, but without needing to wait tables.

This dovetails well with the article that Bradley Chambers referenced:

The more and more I use online learning from places like Lynda.com, Codecademy, and even Audible.com to supplement gaps in my personal knowledge and technical training, the more I'm hopeful that somehow, non-traditional learning will gain traction and pop the bubble of assembly-line learning found in most higher-ed today. And just in case that doesn't happen, I'm working my tail off to save for my kids.


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