The College Debt Crisis in America
America has a problem that’s growing on an unimaginable scale. In the last decade student loan debt has become an issue that should be at the forefront of any agenda looking to push serious long term change. The fact is, college is a wonderful thing for the growth of a nation, and while I certainly agree that we shouldn’t be so focused on pushing everyone to go, those who want to go, and can go, should be able to attend without the nagging fear of walking out with their arms filled with an eternal debt. Innovation and change is fueled through the education of the next generation, and college is a wonderful place to further the potential of young people.
Over the last decade student debt in the US has nearly quadrupled. Today the average student walks out with nearly $30,000 in debt (about 31,000 in Delaware, also, keep in mind that this number changes based on where you look. All of it is in the high 20,000 range usually) and over 37 million Americans currently have student debt. Here’s another frightening fact, about 7 million people have defaulted on their loans, or about 20% of the total borrowers. Those who do default are subject to huge penalties, losses of different licenses, the destruction of their credit, potential unemployment, and more. Student loan debt is also credited as a major reason why new graduates don’t buy cars, start families, or buy houses. So while the average wage in the US hasn’t moved much in decades, the amount of people struggling due to student debt has skyrocketed.
This should be nothing short of drastically alarming. Do we want the next generations weighed down by the threat of the expenses of college? Do we want students deterred from learning more, getting a wonderful experience, and furthering themselves because of this crisis?
The question is, what do we do about this? Well, while Republicans have seemingly just written the issue off, democrats like Senator Elizabeth Warren have done introduced legislation to tackle the issue head on (She recently introduced a bill to allow millions to refinance student loans at lower interest rates). Things like the use of public in-state colleges more can as well reduce student loan debt (As the average public student’s debt is usually about 5-6 thousand lower than a private student or more). We can also work to reduce interest rates, and manage the loans that are dished out in a more professional manner. Did you know the US government makes $50 Billion a year in profit off of student loans? Solving problems like these can be a much needed remedy to an important problem.
But how can we do more than just throw a band-aid on the issue? Sure, we can push more people to try community college, public universities, and work to bring down interest rates, all that will provide a much needed level of assistance to drowning students. But can’t we do more?
Well, in my opinion, we can. Looking at other nations around the world, you’ll find that a significant amount of developed nations have much less student debt on average than us. Programs like the UK’s allow students to take loans from the government, then pay it back through a percentage of their income until the debt has been repaid or forgiven (which if I remember correctly, all debt is forgiven after 20 years). Even better, no income is deducted until you reach 21,000 pounds in yearly income, or about $35,000 US Dollars.
Truthfully, I think a mixture of ideas could really prove very helpful to US students. I think if America is to continue in the right direction, it’s time we handle the issue of our education system and the foundation we lay for the next generations.
Tags: College Debt, Debt, Education, Featured
Limit tuition increases to CPI, or no federal aid and no federal loans to attend the university. Universities have raised their tuition at 4 times the rate of inflation over the last thirty years and built luxurious facilities. Dining halls have fancy food and head chefs. College is not supposed to be a country club; but colleges face a customer base that will go to any lengths to pay the price to get in, and the federal government just piles on more student aid and loans to help “reduce” the cost for students.
If universities want federal money and federal loan guarantees for their students, then they need to limit tuition increases to CPI. Period.
I wish I understood how to fix this.
There was a time, not so long ago, that kids filled with education got out college and thought they could change the world. Thank God they didn’t know better. Many of them made a remarkable difference.
Now so, so many kids get out of college and public service/betterment is completely out of the question because their college debt precludes it.
No ideas on a fix but we’ve lost too much when idealistic college graduates won’t try to change the world for the better because they can’t afford to.
The new deal, I am confused. You seem very concerned about the next generation of college students having to exit college, (something they have a choice of whether they attend or not), owing $30,000 plus in student loans, but you make no mention of the $50,000 plus debt that every man, woman, and child has involuntarily incurred due to the physcal irresponsibilty of the last decade of 15 trillion dollars worth of government deficit spending. What about the next generation of all of our kids. They will now have to pay back as ll of our excesses.
To fix the student loan problems you have to do 2 things.
1, abolish tenor
2. Only offer student loans for tuition, not room snd board and books. And, you have to qualify for the loan by having a part time job, so that you can pay back part of the loan while attending college.
I lived at home while I went to college, I worked two jobs and paid for all of my college cost. I made decent grades as well. If I can do it, than anyone should be able to, because everyone at the delaware liberal has stated at one time or another that I am a bleeping idiot.
P.s. no socialist solutions from the liar/cheater elizabeth warren are ever going to improve anything
I love hearing a good tenor sing. If you mean tenure, what does it have to do with the mounting costs? College professors are not exactly overpaid relative to the overall costs of an education, and I believe you would find that their wages have been steady if adjusted for inflation. I agree that much of the debt is a result of choices people make, but pushing that aside, the surging costs must be controlled in some way. The government profiting less of the debt owed would be a good place to start. Drop student loan rates to inflation rate and no higher. Be a good start.
Competition improves quality and lowers cost 100% of the time.
Getting rid of tenure completely makes teachers actually have to compete to keep their jobs or earn their raises. Imagine that. They may even have to innovate, but right now, they have to do nothing to keep their job once they have tenure. That raises cost and lowers the quality of education 100% of the time.
“Competition improves quality and lowers cost 100% of the time.”
Then explain Windows.
@rd “Competition improves quality and lowers cost 100% of the time.
Getting rid of tenure completely makes teachers actually have to compete to keep their jobs or earn their raises.”
Getting rid of tenure will simply drive teachers (especially the good ones) into other higher paying professions. My daughter was a teacher… treated badly… she quit and went to medical school.
Explain to me how that improves quality and lowers cost. Or maybe you don’t completely understand the concept of 100%?
They compete for the tenured positions. Again, the costs aren’t absurdly high because of professors salaries….administration may be another story. Or sports facilities. Or really nice dorms, academic buildings, etc….or the fact that these loans are available in the way that they are. Colleges are in a market business and in the end will charge all that the market can bear.
My son attends a university in New York. The facilities are quite glamorous. An upscale sushi/Japanese restaurant (complete with waiters) that accepts his meal plan. Starbucks, an Italian grille, decked out gyms in every dorm – and I didn’t even touch on the massive sport’s facilities for a school that focuses on engineering, biomedical and mathematics (which isn’t necessary, cause, ya know… engineers – of which my son is one!) It boggles the mind.
Tenure isn’t the problem with costs.
Tenure is not the fundamental problem.
Unchecked inflationary pressure on college tuition is, to my understanding, the single greatest contributor to burdensome college debt. In essence, there is no natural check on rising tuition costs especially when we beat into every kid’s head that they need a degree and we likewise expect it of them.
I love how people act as if this is the 90s or 80s and a part time job will pay your way through college. These schools are 40k per year. LOL Good luck finding a part time job that puts a dent in that these days. Also, the problem isn’t the rising cost of room and board, so Rusty, why would a solution be to ensure that loans cannot cover those areas?
The Philly Inquirer did a series on this back in the ’90s. The increasing cost of college is directly related to the increased number of administrators at said colleges, many of them in the financial aid offices.
Wonkblog did a great explainer about the rise in college tuition costs last year.
They charge what the traffic will bear. As long as Gov etc. are handing out money they will continue to increase costs and students will pile on more debt. Why should the tax payer be responsible for bailing them out. Suck it up, take responsibility and pay up. Comes with the territory.
College and Universities are much like the Government, self serving, bloated and inefficient.
The students are what college is all about. And why do they go to college to learn? The teachers, that is why. They want to be taught by highly qualified teachers. Otherwise, they could just go to the library and check out books and try and teach themselves. So tenure takes the most important part of college, the teachers, and ruins them by removing the key motivator, fear and
reward. So, the rest of the university
follows suit by having an un
motivated administration. If you take over a failing proffesional sports team, or a failing business, and you determine in either case that you have alot of mediocere employees, you have to find a way to motivate them or get rid of them, once you do that, the whole team or company can be turned around. WHAT YOU DONT DO FOR SURE IS GIVE THEM ALL LONG TERM CONTRACTS WHERE THEY CANT BE FIRED
Back charge the college for a percentage of the student loan defaults.
@rd “So tenure takes the most important part of college, the teachers, and ruins them by removing the key motivator, fear and reward.”
Tenure is about academic freedom. It’s to prevent administrators from telling the faculty what they can teach and not teach. It’s to prevent the administrators from telling the faculty what they can research.
And teaching skills are not what gets someone tenure. In most places its demonstrating your national and international reputation by bringing in money… lots of money… a.k.a. research grants that include overhead.
These people are all highly motivated. They don’t need lack of tenure threats to motivate them. This is a HIGHLY competitive world. The ones who fail get pushed aside rather quickly. The “dead wood” problem is not as severe as you imagine.
Well rusty.. It’s obvious that you’ve never seen this world up close in that you have a cartoon view as to how things really work in academia.
Minor disclosure: I have a tenure contract. You have no idea how many 100 hour work weeks I’ve had… No idea! …and you think I need something crappy like that to be motivated? Do you have any concept of true motivation?
“Well rusty.. It’s obvious that you’ve never seen this world up close in that you have a cartoon view as to how things really work in ____________ . ”
You can put literally anything in the blank and the sentence works.
GHY….. you say “they charge what the traffic will bear” I suppose you mean it is market driven, and since people are paying X, then charging X is acceptable? That if “everyone refused” to pay X, it would change….
First of all, if that is not what you were saying, I apologize for the misread and the following pointless point….
HIgher education is something that should be played with like Ipod prices, or best pizza in America. People pay the asking price, whether or not they can afford it, because it is too important not to. It’s the same deal with Gas. yes. people are paying 390/g because there is no choice….. they COULD refuse to buy gas, and not commute… and lose their job and, well we don’t want them on welfare so they should GET A JOB!! Same with College. people need higher education to further their potential to contribute to society. It’s something that has immeasurable demand. Yet banks and other lending institutions seem hell-bent on measuring this demand, at the expense of countless futures.
None of this addresses the main source of the problem, for-profit “universities” that exist mainly to cash in on these loans without giving students anything like what we consider a college education.
Gives lie to all the free-market nonsense rattling around in rusty’s empty head.
The major reason for increasing student debt is the decline in state support for public colleges and universities. Costs have shifted from states to students and their families, driving them to borrow to pay for tuition and related expenses. Thirty years ago, state colleges and universities had anywhere from 20% to 40% of their operating budgets paid by state governments. That has gone down to single digits. Additionally, federal government support has shifted from grants to students and institutions to loan programs. With regard to tenure: Fewer and fewer faculty members have full-time positions, let alone tenured positions. About 60 percent of courses taught in the United States are taught by instructors without tenure.
Also… University Presidents are being paid like Fortune 500 CEO’s:
E. Gordon Gee (Ohio State University) — $851,303
James P. Clements (West Virginia University) — $775,000
Francisco G. Cigarroa (University of Texas system) — $751,920
Ray L. Watts (University of Alabama at Birmingham) — $748,464
Renu Khator (University of Houston main campus) — $700,000
Patrick T. Harker (University of Delaware) — $669,120
Samuel L. Stanley Jr. (State University of New York at Stony Brook) — $644,455
Satish K. Tripathi (University at Buffalo) — $643,309
William C. Powers (University of Texas at Austin) — $628,190
Elson S. Floyd (Washington State University) — $625,000
That’s nothing compared to what college football coaches rake in. Nick Saban, Alabama, $5.5 million.
Jason, ya got it right. The folks at the top get their buddies on the board to give them ever increasing salaries. While at the same time complaining if they give the lowest paid workers a raise, everyone will have to pay more. How much more are we paying when the head administrator gets $669,000 for doing what? Commiserating with Gov Christie at a football game?