DC: What was once part of the American dream has now become, for many, an American nightmare. In 2012, the nation was shocked by a stunning new fact: outstanding student-loan debt had reached $1 trillion — an amount rivaling credit-card and car-loan debt. Today, that figure is $1.5 trillion and growing — with no end in sight.
What are we doing to our young people? We insist they need more postsecondary education to compete in an increasingly globalized and automated world. To obtain this education, many students assume loans resembling a home mortgage. But here’s the catch: with a home mortgage, there’s at least the prospect of some residual equity. With student loan debt, far too often there’s no guarantee of anything, because the student hasn’t received the promised education, or doesn’t obtain a degree or certificate.
No other developed country treats its young people this way. According to the Committee for Economic Development, between 1982 and 2012, the consumer price index was relatively flat given low inflation. During this period, American health-care spending (already growing at an alarming pace) rose twice as fast as the CPI. What most Americans probably did not realize is that postsecondary-education spending rose twice as fast as health care – four times CPI growth. Meanwhile, median family income during this period hardly budged.
This enormous debt load hurts our economy. Young people are moving back with their parents, delaying home purchases, and starting families much later. This debt load also hurts older people. The “Wall Street Journal” reported recently that older Americans also had significant student-loan debts — either their own or the loans they assumed to fund their children’s postsecondary education. Americans 60 years or older now owe $86 billion in student-loan debt.
Three critical questions arise: how did this situation happen, who’s to blame, and what can we do about it?
Seeking a competitive edge in attracting students, many American colleges and universities launched massive spending programs: student housing, sports and recreation facilities, student clubs, health care, libraries, computer centers, facility renovation, plus increased administrative staff to maintain compliance with increasing state, federal, and accreditation demands. These amenities and expenses are not typically found in foreign postsecondary institutions where the infrastructure is relatively modest. The late William Bowen, an economist and former Princeton president, deemed such expenses a “cost disease.”
To attract and retain students, many institutions post high sticker prices which are then subsequently discounted. When endowment funds prove insufficient to offset the discounts, these schools recruit students who can pay the full price. Many of these students come from abroad. The entire pricing structure is irrational: it’s like going to Nordstrom’s and finding six different prices for the same pair of shoes, depending on a bizarre and confusing array of factors. more here
I told my girls I’d pay for their college right after I paid for mine.
I had no intention of going to college, never did.
Who does not see what the government is doing? The same thing it did with health care. The government became involved with college tuitions and the cost of tuition started growing exponentially. Its cost has grown out of control and is now unaffordable. Any day now the government will claim an “crisis in education” that can only by solved by government taking over student loans. Thus consolidating more power over the private sector and draining more money into the coffers of the federal behemoth.
This is all by design. Why do you think the left has put so much time and effort into taking over education? They are incrementally socializing our society one piece at a time.
The left created a crisis in order to create another circumstance where the government can socialize the private life of Americans and steal your money. So you kids can “compete in an increasingly globalized and automated world.”
Why pay that kind of money for indoctrination and brainwashing when you can sit in front of a television and let the main stream media do it for free?
The children new where they wanted to end up before they started college , I was not going to invest in an extended party. The Army a MOS with civilian applications + the GI bill has served me well.
Maybe teaching personal money management in middle school would help avoid those silly choices
My high skrewl Junior baby boy is being courted by every college in the commonwealth right now (not to mention the USMC). Have no idea what he is planning, but I have been telling him for years that people will ALWAYS need plumbers, electricians and HVAC technicians among all of the other trades.
“Speaking the truth in times of universal deceit is a revolutionary act.” Geo. Orwell
College is like most other things – you get from it what you’re willing to take.
Since WWII college is propagandized as THE panacea for those immured in the “lower” and “middle” class. The idea of “education” is dead – that of obtaining certification (in a sheepskin) is paramount. Colleges and Universities (being staffed by some very smart people) quickly understood the money-making potential and, thus, pushed the idea even harder, and begged, through various modes, to gain the subscription of the Federal Gov’t. Starting with the “GI Bill” and progressing to “Pell Grants” to taxpayer “Guarantees” allowed those Colleges and Universities to raise cost while diminishing value, knowing that they’d get no grief from Business or Government – because both Business and Government maintained the pretense of the “value” of a college diploma.
So, now the full weight of the scam is being felt – $1.5 Trillion and growing – and the breadth of the scam is glaringly obvious in the likes of Sandy Ocasio-Cortez’s gross imbecilities (despite her “cum laud” degree) becoming a daily show. And the socialists want to nationalize the debt and make all future “educational” debt (ie “free” college) national, as well.
Another moronicism amongst a flurry of moronicisms.
izlamo delenda est …
When the climate retards get their way a shovel or hoe will be as technological as it will get.
Alexandria ‘Ocrazio’ Cortez, D-Da Bronx has a Degree from Boston University. ‘nough said!
Our Best and Brightest are nothing of the kind.
Barack O’zero has a degree from Columbia and Harvard, Michelle O’zero has a degree from Princeton and Harvard and both are dumber than a bag of bricks. At least the bricks can be used to build something. All those two were good for is destruction.
At today’s colleges and universities, critical thinking is nowhere to be found… and it shows.
You can’t get a living room set from Rent-A-Center but the bank will approve $150,000 for you to go to college with an undeclared major with all interest deferred for 4 to however many years.
It prevents buying a house and starting a family. It prevents being able to hold out for a job in your field. Building any wealth.
It’s a government backed debt trap that feints toward compassion but has enslaved a generation. If you don’t know which spelling of “principal” applies to a loan, you shouldn’t get one.
I’d begin Carter’s Dept. of Education and what they currently do. Look back 100 years and see what a 5th education got you…you could read, write and do arithmetic. 50 yrs later they were tracked (college or tech bound) so that everyone would have an opportunity at gainful employment. It was superior to what kids get in high school today.
@Moe Tom precisely…AOC aka Ms. Diversity-ConArtista is the poster child for stupid on steriods with multiple degrees.
Bilingual ed was sold to the masses in the 80s. Most of the learned b/l educated are masters at neither language. Add to that fact, SAT & ACT are in English. Many students would use up 125 hours of grant money on remedial courses. Then come the adverts for loans to get a Bachelor degree which would garner them employment. On the way to becoming an educated and employable human they find love, marry and must now have a love nest. Clinton’s subprime lending made sure that they got that. It’s a racket. If they can’t find work now, it’s because of racism or some other pathetic excuse. This is the age of teaching feel good no matter how badly you suck at working. Gumption seems to be forcefully slipping away.
The Fake MSM image maker defines success now, and it’s not your plumber. That said, most plumbers I know have purchased their homes long ago and have no problems paying their bills.
You can thank Globalist Carpetbaging President George W. Bush for this fiasco. In 2005 he, as a favor to Alfred Lord, the CEO of Sallie Mae, signed the bankruptcy reform law that made student loans nondischargeable in bankruptcy. Thus opening the flood gates to where any school could give any student loans without any of the normal market restrictions such as creditworthiness of borrower. Government and private lenders flooded the market giving student loans like candy, knowing full well they would never be held accountable for bad loans, because the government would pay for defaults, and the student borrowers having no recourse via bankruptcy.
College never was an american dream. It is a place to continue living off of momma’s teat and to party until you grow up and decided to be a self sufficient member of society……..
The other nice trick is as long as they keep going to school they are not being chased for the money. Perpetual students.
As long as Washington keeps micro managing everything, things will just keep going off the rails. Fix Washington ~ fix America.
Where is Lizzie (Borden) Warren’s, Consumer Financial Protection Board? Shouldn’t they be preventing Universities from selling children Womyn’s Studies degrees on time payment plans?
In the early 1970s I realized college was a crock-o-crap so I quit. I then made my own choice on what books to read and what to study. That’s what made me the great intellectual I am today.
“As long as Washington keeps micro managing everything, things will just keep going off the rails. Fix Washington ~ fix America.” -Perry
This culture won’t fix Washington. But I agree with your statement.
I didn’t read the entire article, but I heard something else recently about the effects of huge student loan debt. Not only are graduates who have worthless (non-technical) degrees unable to find work to pay off their loans, but the burden of that debt — besides making them unable to purchase homes and all the stuff to put in them — means they will be unable to take any other steps toward independence, like invest in their own businesses. Just at the time and age younger adults should be deciding how to make their mark in their own lives and in society, they are reduced by their economic circumstances to revert back to an economic “childhood” that depends on others for their daily bread and has created a generation of insecure, anxious people who vote for politicians who promise to “take care” of them. Is it any wonder, then, that college administrators have been quick to keep their ATM happy by giving in to their nonsense regarding “safe spaces”, being “triggered” by every little boogie man, and protecting them from everyone and thing that disagrees with their immature points-of-view? Colleges will do little, if anything, to upset the flow of money coming into their coffers. Education has become a very low-ranking goal at most colleges.
Two things that I’ve noticed in Seattle in the past decade is 1) All the huge construction that has taken place in local colleges/universities and, 2) All the huge, expensive construction that has been done by city, county and state gov’t for their own office buildings.
The first step to a solution is to eliminate any program/course that contains the the word “studies.” No loans should be approved for students taking courses that contain those words, period!
@Arby — That was the rule in our house. Dad and I said, “Any ‘studies’ courses will be paid for by you.” The number of ‘studies’ courses taken were zero. Our kid has a finance/accounting degree and a good job — secured before graduation — her own apartment and a savings account.