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Nov 9, 2015
Presented by
Charlie Kirk

Why does student debt keep going up and up even as it's harder and harder to find a good job with a college degree? And why does it seem that the more aid the government and colleges give, the less it helps? Charlie Kirk, founder of Turning Point USA, shows how politicians and universities have saddled students with dangerous debt...and with little to show for it.

Many students are stuck paying back their student loans every single month for decades.

  • Total student loan debt is more than one trillion dollars, more than privately held credit card debt.View Source
  • The average student in 2015 graduated with $35,000 in debt, the highest debt rate in history.View Source
  • Student loans often take 10 to 20 years to pay off.View Source
  • The trillion dollar student debt market incentivizes students to postpone marriage, avoid entrepreneurial activity, and delay retirement savings.View Source

Student loan debt results in postponed marriages, missed business opportunities, and delayed retirement savings.

  • The trillion dollar student debt market incentivizes students to postpone marriage, avoid entrepreneurial activity, and delay retirement savings.View Source
  • The average student in 2015 graduated with $35,000 in debt, the highest debt rate in history.View Source
  • Student loans often take 10 to 20 years to pay off, and this burden can prevent people from saving money for important things, like a down payment on a home.View Source

Federal college loans lead to higher tuitions, which drive more students to take on more loan debt, perpetuating the cycle.

  • A study from the New York Federal Reserve strongly suggests that the expanding supply of student loans has increased college tuition.View Source
  • Since 1978, the cost of college education has risen over 1,000 percent.View Source
  • Rising tuition costs disproportionately affect low income students.View Source

College tuition has increased twice as fast as medical care costs and risen more than 4.4 times as much as the cost of food.

  • Since 1978, the cost of college education has risen over 1,000 percent.View Source
  • College tuition has increased twice as fast as medical care costs and risen more than 4.4 times as much as the cost of food.View Source
  • A study from the New York Federal Reserve strongly suggests that the expanding supply of student loans has increased college tuition.View Source

Federal loans for college prompt universities to raise tuition, requiring students to take out even more loans.

  • A study from the New York Federal Reserve strongly suggests that the expanding supply of student loans has increased college tuition.View Source
  • Since 1978, the cost of college education has risen over 1,000 percent.View Source
  • Rising tuition costs drive more students to accept more student loan debt, perpetuating the cycle — and disproportionately affecting low-income students.View Source

Students are going into more and more debt in order to earn degrees that are becoming less and less financially valuable.

  • Going into debt in order to secure a lucrative career can make financial sense; however, many students today pursue majors in the social sciences, humanities, and communications, which have high unemployment rates.View Source
  • Only 59% of students who enter college or a university leave with a degree, and those who drop out of college are less likely to pay off their loans, leaving many saddled with debilitating debt.View Source

Americans now have more student loan debt than privately held credit card debt.

  • Total student loan debt is more than one trillion dollars, more than privately held credit card debt.View Source
  • The average student in 2015 graduated with $35,000 in debt, the highest debt rate in history.View Source

Student loans generate revenue for the government and colleges. But for many students it only generates significant debt.

  • In 2013, the Congressional Budget Office estimated that the government would collect $184 billion in student loan interest over the next 10 years.View Source
  • Only 59% of students who enter college or a university leave with a degree, and those who drop out of college are less likely to pay off their loans, leaving many saddled with debilitating debt.View Source
  • Read Turning Point USA founder Charlie Kirk on how student loans help enrich the government.View Source

Only 59% of students who enter a college or university leave with a degree.

  • Only 59% of students who enter college or a university leave with a degree, and those who drop out of college are less likely to pay off their loans, leaving many saddled with debilitating debt.View Source

Rising tuition costs disproportionately affect low income students.

  • A study from the New York Federal Reserve strongly suggests that the expanding supply of student loans has increased college tuition.View Source
  • Since 1978, the cost of college education has risen over 1,000 percent.View Source
  • Rising tuition costs disproportionately affect low income students.View Source

Since 1978, the cost of college education has risen over 1,000 percent.

  • Since 1978, the cost of college education has risen over 1,000 percent.View Source
  • College tuition has increased twice as fast as medical care costs and risen more than 4.4 times as much as the cost of food.View Source
  • A study from the New York Federal Reserve strongly suggests that the expanding supply of student loans has increased college tuition.View Source

I’m guessing you’ve heard of the acclaimed TV show “Game of Thrones.” Seven kingdoms vying for power, plots within plots, watch your back or lose your head. It’s great.

But you’ve probably never heard of a real life drama that I call the “Game of Loans.” That’s a game Washington politicians play on young people, that is, college students, every day.

Just like “Game of Thrones,” the “Game of Loans” has plots within plots, big winners and big losers.

The winners are politicians and colleges. They fool students into thinking that by generously providing ever-larger college loans to cover ever-larger tuition costs, they have earned students’ votes at election time.  Why do I say students are fooled? Because it is thanks to the very politicians who promise students more and more aid -- in league with the colleges -- that college tuition became so expensive in the first place.

Here’s how the game works. 

According to Bloomberg News, since 1978 the cost of a college education has gone up by over 1000 percent. Way past the rate of inflation. Tuition alone at many colleges is 20, 40, even 50 thousand dollars a year! So, how do you pay for it? Answer: student loans, loans that the government is happy to give you since they collect the interest. You don’t have to be a finance major to figure out that all these student loans give colleges no incentive to cut costs. Instead, it gives them every incentive to raise costs. Higher tuition obviously means more money for the college.

Now if students were going to college in record numbers to study engineering or computer science or biology -- professions with high employment rates -- maybe these crazy sums would make some sense. Maybe. But the most common majors are in the social sciences and communications -- in subjects like sociology, cinema history and gender studies. Not surprisingly these majors have very high unemployment rates, as in, they don’t prepare you for a job. And these majors are mainstream! You can get a degree in storytelling, bag piping and puppet arts for your fifty thousand a year.

But here‘s the point: colleges are no longer primarily about preparing you for a career. Today's higher education is about teaching you what a terrible country America is, social activism… and binge drinking. Hey, if college didn't cost so much the parties might be worth it, but it does.

The average student loan debt in America is $28,400 per borrower. Note that this is per borrower, not graduate! Big difference. A large chunk of the 1.3 trillion dollar student loan liability is held by ex-students who never graduated.  For every 100 students who enter a four- year college only 59 exit with a degree.

But maybe you’re one of the lucky ones. You got a business degree and you found a decent job. Chances are you’re paying off your student loans and will be for the next 10, 20 or even 30 years! Good luck saving money for a down payment on a house or just about anything else.

Mike Rowe from the TV show “Dirty Jobs” nicely summarized the issue this way: "We are lending money we don't have to kids who can't pay it back to train them for jobs that no longer exist."

So, am I saying that college is always a waste of time and money? Of course not. But I am saying this:

1) Remember that if you take out a student loan, it’s not free money. You actually have to pay it back. I know this sounds ridiculously basic but it’s also ridiculously important. And since you owe this money to the federal government, you can’t get out of it, even if you declare bankruptcy.

2) Whenever you hear politicians say they want to make college “more affordable,” what they’re really saying is that they want to get the youth vote while making it easier for you to dig yourself into a deep hole.

These politicians don’t have your best interest at heart. They have their own best interest at heart -- namely, getting elected. You don’t owe them anything.

“The Game of Loans” is rigged -- and not in your favor.  But if you’re smart about your choices, you can beat the odds.

I’m Charlie Kirk of Turning Point USA for Prager University. 

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