In the world of finance, there are tremendous safeguards in place to ensure that money does not get laundered. Money laundering, loosely defined, is the process of taking proceeds obtained through criminal activity and making them appear to have originated from a legal enterprise. So, what happens when the people who make the laws are the ones actually laundering the money?
The student loan market is a classic money laundering scheme. Money is taken from the middle class then “washed” using college education as the “legitimate business.” University Administrations flush with cash vote en mass to support the very same government officials who keep money flowing their way. “Okay, so where is the crime?” you might ask.
The answer is overcharging students for a degree that’s worth merely a fraction of the price paid to obtain it.
Pre-Obama, college loans were managed by a variety of banks, brokerage firms and financial institutions that helped administer many of the government programs which helped students go to college. While not a perfect system, it worked well enough. Anyone who wanted to go to college could do so.
The Obama Administration, unhappy with this lack of centrality and control of the student loan market, decided to bring it under one umbrella. The result? The Federal government now has complete control of the student loan market. Sounds like a reasonable plan; but, it has been a disaster for the very students it is alleged to help.
Once the colleges understood what was happening, they started raising the cost of tuition. In the past, given the disjointed nature of the loan market, it was difficult to pass on increases to the students. The students, loan officers and the banks had to coordinate the loans. This complexity added an invisible cap on rising prices. In the past, if the tuition at a school was $30,000 per year, the university officials had to be fairly certain that the students could get enough money from the loan market to justify the tuition being charged.
Not any more. Once the government put the loan market under its control, the cost of education began to rise.
This fear of rising education costs was predicted in the late 1980’s by Bill Bennett, former Secretary of Education, who published a now classic New York Times op-ed titled “Our Greedy Colleges” argued that the government’s attempts to make higher education more accessible may have also accidentally made it more expensive. “If anything” he wrote, “increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase.” With the government now giving money to anybody and everybody for whatever amount, costs have correspondingly skyrocketed. Universities are now fairly certain that the government will grant their tuition increases and grant the loan… whatever the price increase!
Because the Progressive Left knows that the education racket is crumbling. It’s almost a mad dash for the money before it runs out. With more and more avenues for obtaining an education online, at cheaper and cheaper rates, it is getting harder and harder for universities to justify their pricey degrees. In addition, the universities are still teaching subjects and materials in the same manner they did thirty years ago!
Students are now getting out of college with worthless degrees, entering a nearly non-existent job market and carrying staggering debt from the cost of obtaining the underlying education. The U.S has 94 million people out of the workforce because they can’t find jobs. Given these terrible job numbers, one would think college tuition costs would be coming down, yet this is not the case.
Higher education has become a money laundering scheme, where students are being used to incur exorbitant amounts of debt to fund the wages and lifestyles of those administering higher education. This money laundering scheme is being sanctioned by the government and executed by the universities. Given that our higher education system is run by the Left, which votes as a block, the greedy purveyors of this scheme know they have to compensate (bribe) the members of that block to continue to vote them in power.
The same way the bond holders and pension funds were fleeced by the bankruptcy of General Motors to pay off the unions, students are now the vehicles by which their monies are being used to pay off these corrupt Democrats.
There is a revolution taking place in the field of education with companies like Udemy, Code School, Coursera, to name a few, coming online offering courses at a fraction of the prices demanded by traditional universities. Many of the courses are rightfully being designed with the future in mind and so their curriculum offerings reflect that foresight.
Google no longer requires a college degree as a prerequisite to work for their company because they have figured out, in this day and age, its simply isn’t necessary! What is necessary in today’s work force are people who continue to educate and upgrade their abilities themselves by utilizing the latest tools and technologies in order to stay relevant in a rapidly evolving workforce. Sadly, much of academia has totally failed its students in this regard; but, they refuse to adjust their costs accordingly. Greed outweighs their integrity.
Like all money laundering schemes, this one will end with a bust. However, this time it won’t be the Feds coming in to arrest the guilty parties… as they are the ones who originated and have perpetuated the crime.