The Ken Coleman Show host Ken Coleman arrives on Cavuto: Coast to Coast to discuss the resumption of student loan payments and the cost of higher education.
As borrowers prepare to resume student loan payments, a personal finance expert debunks higher education’s “marketing lie” and offers advice for those facing the extra bill.
“I’m very concerned for the people who thought Uncle Joe would pull through and get their student loan debt off,” The Ken Coleman Show host Ken Coleman said Tuesday on Cavuto: Coast to Coast.
The Ramsey Solutions rep added he fears only a “small percentage” of borrowers have used the interest rate hiatus to save for the hefty bill.
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“I don’t have any data to back that up, other than that human behavior is still setting new records on credit card debt during all of these skyrocketing wage increases that we’ve seen in recent years,” he said.
“This is really heartbreaking,” he added.
The Ken Coleman Show host Ken Coleman discusses higher education’s marketing lie and comments on the resumption of student loan payments. (FOX Business / Fox News)
Federal student loan borrowers have no longer been required to make monthly payments for more than three years.
But this pandemic-era pause is officially over, posing a potential financial shock to millions of Americans.
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About 44 million borrowers in the US were affected by the payment freeze, which initially began in March 2020 with the outbreak of the COVID-19 pandemic. The Biden administration extended the pause for the eighth time last November, but will not do so again under the bipartisan debt ceiling agreement approved by Congress.
“We took their calls on ‘The Ramsey Show’ and on ‘The Ken Coleman Show’ and people said, ‘What do we do? “Get out of debt,” Coleman said.
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With payments resuming in October, the latest Federal Reserve data puts the average monthly bill at between $200 and $299 per person, although it’s even higher for some borrowers.
Interest begins to accrue from September.
Coleman said it’s time to “call on Congress and the White House” to actually address the root cause of the problem — “skyrocketing” college tuition.
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“The answer is incredibly skyrocketing tuition fees. It’s big business for the state governments and their economies to use these state student loans to fund colleges and universities. And it is the American people who are suffering. It’s taking on too much debt and it’s ruining their lives—literally… Nobody’s talking about it in Congress.”
As tuition fees rise, the need for loans also increases for many students. However, many students learn the hard way that a college degree is not always the best path.
“The message since the ’70s has been: If you get a college degree, you’re going to have a better life,” Coleman said.
“But here’s the reality,” he added. “That is no longer the truth.”
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According to a report by Georgetown University’s Center on Education and the Workforce, the cost of college and university programs increased 169% between 1980 and 2020.
However, nationally, there has been an increase in attendance at business schools and other higher education alternatives, as more and more people believe that the cost of a degree is not worth it.
“As trade schools explode, new careers like tech schools or coding boot camps explode, every day we see more and more in the headlines that companies need to retrain college grads to actually do the work they need to do,” Coleman said.
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Over the past decade, college enrollment has declined about 15% while student enrollments have increased more than 50%, the Wall Street Journal reported, based on federal and Urban Institute data. Today’s estimates show that colleges and universities have a total of around 15 million students enrolled, while companies employ around 800,000 trainees.
“There’s a marketing lie that says a college degree is the only path to success, and that’s not true.”
-Ken Coleman
A recent study by the Higher Education Advisory Group (HEA Group) found that some of the most popular college bachelor’s degrees don’t always lead to well-paying jobs, and the study’s author urges prospective college students to make an informed choice about theirs Career choice.
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The study found that the top 10 most popular bachelor’s degree programs do not necessarily lead to the highest salaries.
While the data indicated that graduates earned more than $40,000 per year, only the business, nursing, and accounting fields showed graduates made more than $50,000 per year. The lowest-paying major of the group was teacher education and professional development, with majors such as psychology, liberal arts, communications, criminal justice, biology and health, and physical education ranking average.
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“I see a fragmentation of education in the future because it can’t continue like this,” Coleman claimed.
“There’s a marketing lie that says a college degree is the only path to success, and that’s not true. Two questions young people and parents need to ask themselves: Is graduating the only way or the best way to achieve the future I want.” ? And if the answer is “no,” I have good news. There are cheaper and less time-consuming alternatives everywhere.”
FOX Business’ Megan Henney, Sarah Rumpf-Whitten and Kristen Altus contributed to this report.