Student Loans Are a Scam and the College Industry Knows It

The Hustle Is the Admissions Office

Let me cut right to it. Student loans are dumb. Not a little dumb. Catastrophically, life-alteringly dumb in 2024 when alternatives exist everywhere you look.

I have been saying this on this program for years. Now Mark Cuban is saying the same thing and suddenly the mainstream is paying attention. Funny how that works.

Cuban’s take is exactly right. An accounting class at a community college teaches you the same debits and credits as an accounting class at Harvard. The content does not change based on the price of the building you sit in. What changes is the debt you carry out the door.

The College Industry Is Selling You a Status Symbol

Here is what the admissions departments and the student loan servicers do not want you thinking about:

• Universities are businesses. They are in the business of filling seats. Their business is hurting right now and they are competing for your student harder than they will ever admit.
• Schools charging ninety thousand dollars a year are not making money on most students at that rate. Nobody pays sticker price. Which means you have serious negotiating leverage that most families never use.
• The “selectivity” and “prestige” narrative is marketing. The University of Florida is hard to get into because it is a great school at an affordable price, not because it has a fancier brand.
• The delta between an expensive private university and the best public universities, in terms of actual career outcomes, is remarkably small for most fields.

Parents, You Are Being Manipulated

I am going to say something that is going to sting a little. A huge portion of the decision to send kids to expensive schools is driven by parental ego, not by any rational financial calculation.

The bumper sticker. The cocktail party conversation. The Whole Foods parking lot bragging rights. Parents are mortgaging their kids’ futures so they can feel good at the golf club. That is the truth and the college marketing machine knows it and exploits it ruthlessly.

Teenagers think they are smarter than they are. That is developmentally normal. That is why the adult in the room has to make the hard call. Letting your kid sign six figures of debt because they fell in love with a campus tour is a parental failure, full stop.

The Playbook to Avoid the Trap

• Community college for two years, then transfer. Saves a fortune and the degree reads the same on the resume.
• Call the school. Tell them what you can actually afford. Make them compete for your student.
• Prioritize excellent public universities. The return on investment crushes private alternatives in most cases.
• Never let debt obligations exceed realistic starting salary projections in the chosen field.
• Understand that the student loan servicing industry profits from your confusion and inaction, not your success.

The higher education machine has built a beautiful product that costs a fortune, delivers inconsistent results, and leaves the customer holding the bill for decades. If any other industry operated this way, people would be outraged.

Start being outraged. And stop taking out the loans.