I should start by saying how lucky I am. I will graduate in 2016 completely debt free. That is, until I decide to pursue a Master’s degree. Many people I know are not nearly as fortunate. I have friends swimming in thousands of dollars in debt. My dream is to pack up and travel after graduation, but so many people will never have that opportunity because they are being bound down by the consequences of an education.
In lieu of American student debt passing $1 trillion (about 2% of total American debt) and Germany providing free tuition for students, I thought we should examine the impact of student debt.
Approximately 85% of college seniors consider moving back home upon graduation. (According to study conducted by Twentysomething Inc.) With the average grad sitting on $30,000 of loans, is that really surprising? While the job market is improving, the unemployment rate for recent graduates is still nearly double the national average. It is a seemingly wise move to go back home until graduates can find their feet, financially.
Students and recent graduates are also accruing credit card debt. The average college senior already has over $4,000 of credit card debt, and that rises to almost $8,000 for graduate students, according to Debt.org. This is in addition to mortgages and car loans.
It’s becoming more difficult to pay off debts. According to the WSJ, debt for recent graduates ages 25-34 has increased 35% since 2005, while earnings for the same group has decreased almost 5%.
Why is education so expensive? In a 5 year span (2007-2012), tuition increased at least 15% in 40 states, and up to 70% in two states. All the while, government funding decreased almost 8% just between 2011-2012. In the past 20 years, tuition rates have increased over 1,000%. Why is this? Mostly a combination between a decrease in government funding, competitive salaries for faculty, increased pay for administrators, nicer dorms, and here’s a good one-sports programs (which are increasing at a faster rate than educational programs). Don’t forget the ridiculous cost of books. A full-time student will spend, on average, more than $1,000 a year on books and supplies. Even if they can be rented, they are often still very pricy. However, many courses require new additions so often that renting or buying used can be very difficult. Online editions are still in the $100 range, despite the relatively cheap cost of publishing them. Universities know that students want and need these resources, and will provide them for a cost.
So, here’s the trillion dollar question, who should pay for these expenses? Education is in investment for the government. Schools that accept federal loans see tuition prices nearly double those of schools that don’t, according to Forbes. Is it possible that educational institutions are taking advantage of students ability to access loans, without consideration of how difficult it may be to repay them? The government loses money and messes up the lives of students who default on loans because they can’t afford to pay them back. The work force can’t contribute in relieving federal debt when they are spiraling out of control handling their own.
Until prices lower, some nice websites help college students and grads budget. Youcandealwithit.com is particularly helpful. They really guide people in determining what they need vs. what they want. Examples for items you want include a car (hopefully you live in a city so you can get to work without a car, but good luck paying rent in big cities), a cell phone (no calls to mom, the boss, or 911 for you), computer (absolutely unnecessary, unless you need to do just about anything), and entertainment (life is fun enough). Okay, so maybe that was a little unfair. Young adults do tend to overspend and be careless. However, they shouldn’t be forced to cut back on everything simply because they start off way behind.
The majority of students still say that the education is worth it, though. What kind of society are we living in where receiving a degree that is becoming decreasingly less helpful in landing a good job, and starting off in thousands of dollars in debt, is the optimal option? If education is the best asset a person can have, why are we making it so unattainable? It seems that if education were easily accessible and relatively cheap, the country as a whole could benefit. The economy would grow instead of face even more debt, and we could grow as an academically prominent society.
Unfortunately, this huge amount of debt doesn’t correspond with good performance. In 2012, the United States ranked 27th in mathematics, 17th in reading, and 20th in science, despite spending more than nearly any other country per student. This is completely unacceptable. What do you want from your education system? What’s important in advancing society? How can we expect our economy, political system, and quality of life to improve when the education system is hurting students from the very beginning?