Uber Debt

"Too much debt is never a good thing"

The other day, while I was in Boston, I hailed an Uber car with my iPhone app and within minutes a black Mercedes SUV magically appeared to pick us up. It is terrific technology.

One thing I have learned from riding in Uber cars is that the drivers are almost always interesting people; polite, well educated, entrepreneurial and happy to engage in conversation. This driver was no exception. Within minutes I found out that he was 24 years old, working multiple jobs and was $150,000 in debt because of student loans. $150,000 in debt because of student loans!

I asked him how he thought he was ever going to pay off all that debt and he said he didn’t know but “I will just keep working and do the best I can.”

What does it say about our society when we claim to have one of the best education systems in the world but are burdening our students with unimaginable debt if they want to avail themselves of what our colleges and universities have to offer? It is a broken system that needs to be fixed now.

In 1976, when I graduated from Tufts University in Medford, Massachusetts, the “all-in” cost of tuition, room and board was about $7,500 per year. I remember thinking that “some day” the costs may rise to $10,000 a year. It seemed like an unimaginable number in those days. I never dreamed that by 2014 the “all-in” cost to go to Tufts would be more like $65,000 a year of after-tax money. In round numbers one has to earn $100,000 a year just to have enough left over after taxes to pay for one year of college. Unbelievable.

Now imagine that you have two kids who want to go to Tufts; or 3 kids or – even worse – 4 kids. And Tufts is by no means unique. There are many schools that cost as much as Tufts and some cost even more. The cost of a college education is out of control and unsustainable and I mean unsustainable. It cannot keep going like this. 18 year olds and their parents cannot keep borrowing truck loads of money for an education. It cannot continue.

I don’t pretend to have all of the answers but one thing I do know is that life is getting more expensive all the time and knowing how to make money, save money and invest money is more important than ever.

No one should be bashful about focusing on this simple fact of life: we need a “money smart” society and anything we can do to better educate our young people – those who will bear the burden of supporting our economy in the years to come – is a good thing. “Blue Chip Kids” is an attempt to start the education process.

-David Bianchi