Mark Cuban says the student loan bubble is “no different” than the housing bubble that we saw burst in the last decade.
Speaking in an interview on CNBC, Cuban said that the increase in student loan debt is holding back the economy, as the purchasing power of college graduates becomes increasingly held back by high debt burdens.
Cuban said that the “easy money” the government funnels to college students is “no different” than the policies that encouraged people to buy houses in the mid-2000s.
Cuban’s solution is to put a limit on the amount of money that any individual can borrow in a single year that is guaranteed by the government. Cuban said the government’s backing of student loans has allowed universities to increase their tuition and increase administrative excesses.
“When you have more administrators making $US200,000 a year than professors, you have something wrong,” Cuban said.
Cuban added that the worst thing a wealthy person can do is donate a building to a university, because this encourages the excess that have become so rampant and problematic in the higher education system.
The main downside to Cuban’s position, he said, is that right now, he’s not taking the initiative to make something happen.
These comments on CNBC follow similar comments from Cuban made recently at Inc.’s GrowCo conference. You can watch the video of those comments here.
Cuban also talked to CNBC about the stock market, which he says isn’t representative of the economy anymore.
“We’re not really sure what drives the stock market anymore,” Cuban said. “There used to be correlations we could understand. But the problem is that nobody really understands what drives our market, and so when things happen, they happen fast.”
In morning trade on Friday, stocks were lower across the board.