Kramer Tells Students to Flip Student Loans

Jim Kramer has returned to his alma mater, the Harvard Law School, to hold his hit show, Mad Money. The show was great, featuring his unusual candor when asked nontraditional questions by some very bright students (with the exception of the face-painted Harvard football player who asked about Cramer's sex life in college -- I guess football players are the same everywhere).  However, he began the show by telling students that he "flipped" his student loans while in school.  In other words, he took the proceeds from his subsidized loans and invested them in stocks rather than paying his tuition.  His stock profits paid his tuition. His is terrible advice of course.  First the ethics of taking government subsidized student loans and investing them in stock are suspect at best. Second, the risk of losing the money in the stock market is substantial.  The returns from stock speculation can never beat the beat the risk/return profile of investing in a law degree; a close to sure beat on collecting, in present value terms, a degree worth close to $600,000.  I trust students understand that his example should not be followed in this regard.