Free College? Sign me up!
My Freshman year of college, I found a sign by an enormous steel building offering up to $15 per hour for general laborers. I took on the job and began working there 20+ hours per week as a fulltime student and as many more hours as the union would let me squeeze in during the summer. This opportunity, subsequent career advancements, and the generosity of my parents to allow me to live at home rent free have enabled me to pay each semester out of my own pocket. Statistics show that the vast majority of people are not as blessed as I am and depend on student loans to pay for school. However, am I actually doing things smarter by not taking out student loans? I have been considering this possibility for several years.
According to usdebtclock.org, student loan debt is $37,000 per student, while the median income is only $33,000. Since the cost of living in the United State is over $33,000, it is safe to say that most people will never be able to afford to pay this debt. -And the problem is not just for a few people. The Bureau of Labor Statistics reports that 70% of high school graduates were enrolled in college in 2016. Since the cost of education has almost doubled since 2000, college enrollment continues to increase, and many college graduates cannot even find jobs after graduating college, the problem is only growing more strenuous. Obviously this sounds like a major problem and there is going to be some kind of bottom. -And I do not believe taxpayers are on the hook because tax dollars are nowhere close to being enough to pay off even a fraction of our national debt.
So what will happen to all this student debt if it cannot practically be repaid? Does it vanish? Can it be forgiven as some Democratic candidates claim? “Humanitarians” that talk about forgiving student debt are actually saying “screw you” to the world because the only way they could possibly bankroll such a ludicrous claim is by either convincing corrupt leaders of overworked countries to buy a massive amount of United States debt or by increasing the money supply and devaluing United States debt that was previously bought by struggling countries. (The other option is that they could make student loans and financial aid merit based instead of need based, in turn lowering the rapidly increasing cost of a continually watered down education, but this is not politically acceptable). Well, to the dismay of my brothers and sisters of America, our unfrugal spending habits are not necessary to support the global economy. We are not the only innovative thinkers and our intellectual property is not so unthinkable by people in other parts of the world.
If (and when) the world decides to stop bankrolling the United States in its wildly out of proportion spending habit, fixed interest loans guaranteed by the broke government are going to be pretty cheap to pay off and the precious metals or stocks that I intend to buy will be worth a whole lot more. I do not even regard my decision as a high risk endeavor because I am so sure of my assertions that the United States economy is headed south, the fixed interest on a direct unsubsidized loan is only 4.55% per year, and the price of precious metals are historically stable. Just last year, my gold and silver investments went up over 20% beating the interest on a student loan by 15% and I strongly do not believe that the price of precious metals will decrease in the next few years. The worst I will lose is a few thousand dollars as the price of precious metals stays relatively steady. However, I believe the upwards potential significantly outweighs the risk and is difficult to even quantify in United States dollars. In the best case scenario, if there is some kind of debt forgiveness in America by some “do gooder,” then I will have pocketed a ton of free money. In a more modest prediction of a scenario, a recession will hit and the cost of precious metals will continue its upward trend toward $2000 per ounce of gold and $40 per ounce of silver. In such a scenario, I will still have pocketed a ton of money except it will be quantified in raw materials rather than US dollars, since such a prediction assumes that US dollars will have taken a significant blow. However, I reckon that I will be able to live quite a few beachfront years in some South American country where the cost of living is far lower than it is here. Meanwhile, I will watch as the United States debates whether or not to leverage the next couple trillions on medicare for all because everyone needs good health (excluding the people bankrolling the system via bonds) or to stage an all out war against Iran.
Think I am crazy? Pessimistic? Maybe a little, but my chips are on the table and I am not in the business of playing the lottery. I only play when I think my odds are ahead. Let's wait and see.