The Student Loan Debacle

“Holdin’ on to sixteen as long as you can
Change is coming ’round real soon
Make us woman and man.” — John Mellencamp

Yesterday, social media was all abuzz when Joe Biden announced his plan for student loan forgiveness. The upshot is that most borrowers can qualify for up to $10,000 in total forgiveness. There was a ton of rhetoric and a ton of snark yesterday on both sides. The crisis (yup, I’m calling it that) has three underlying causes.

College Costs have Exploded over the last 20 years

Nationally, the average cost for a public college was over 20,000 a year. That ballooned to over 30,000 for private colleges. The average cost in 2000 was just over 8000. I’m not good at math, but by my eyeball test that amounts to a 150 percent increase over 20 years. That obviously is well beyond the rate of inflation for that time period.

Now, we could go into the whys this has happened, but if we dive down that rabbit hole we may never make it out. The question is one of responsibility. For instance, had I known that I was going to become a teacher I probably wouldn’t have gone to a private college. I wouldn’t give up that experience for the world though. So, this problem has to be attacked from multiple directions. Students bear some responsibility for choosing an institution that’s as cost effective as possible. Yet, it cannot all be on them. There is no good reason for costs to go up that much over 20 years.

College Degrees aren’t worth what they used to be

This is where our straw man enters the conversation. One commenter yesterday made reference to “Mesoamerican Lesbian Studies”. Yeah, we all know it’s an exaggeration, but still we need to define our terms. As much as people might laugh at liberal arts degrees in general, they are not necessarily coming from a genuine place.

Back in the 1960s and 1970s you could get a college degree in anything and still get a good job. That was less true in the 1980s and 1990s, but it is far more true than it is today. Saddle someone with 80,000-150,000 in debt and then force them to work a minimum wage job and you see the dilemma. Somewhere along the way the rules of the game changed. It’s not students’ fault they changed, but they need to adapt.

The issue is more acute for those without the means to pay for college or support at home. My wife and I can advise our daughter on college. We can coach her into choosing a major that makes sense. Some kids don’t have that at home. Buyer beware goes only so far. It is an issue that needs to be addressed on more than one side.

The Nature of the Loans Themselves

One commenter showed their loan expenditures for their undergraduate and graduate degrees. The totals ended up being well over 150,000 with total monthly payments coming in at over 1000. That by itself is bad enough. Then you throw in the fact that those 1000 payments didn’t touch the principal at all. On top of that, if that person comes into dire straits, they cannot discharge the loan through bankruptcy.

Again, this is where some people added snark to the conversation. They were responsible. They repaid their loans. It is not fair that the current generation is “too lazy” to take care of their own loans. Again, it’s not that simple. At some point we have to realize how ridiculous it is to pay twice as much as what was loaned to you because of the nature of the loan. Mortgages don’t work that way. Car loans don’t work that way. Why should student loans work that way?

Putting it all together

Those that oppose forgiving loans or subsidizing 100 percent of public college tuition have a point. As I said in an earlier post, monies spent by the government are an investment of sorts. It is fair to ask whether that is the wisest way we could spend our tax dollars. I would argue for a measured approach that addresses these issues from multiple angles.

The first question we should ask is how many kids (I’m old now, I can call them that) are majoring in something we might consider frivolous? I imagine it is lower than people think. However, it wouldn’t be difficult to target certain careers and subsidize students studying those things. It wouldn’t be difficult to require graduates to work in certain fields for a fixed period of time in exchange for forgiving their loans. We already do that in limited circumstances. It probably should be expanded to other things.

Finally, we have to admit that college is just too damn expensive. We educate students in Texas for less than 9000 a year. That includes people like me that are support staff. Colleges don’t have nearly as many of those. They aren’t serving students with severe disabilities in the same way we are. Yet, they cost more than twice as much. That money isn’t going to the professors. So, where is it going?

Author: sbarzilla

I have written three books about baseball including The Hall of Fame Index. I also write for thefantatasyfix.com. You can follow me on twitter @sbarzilla.

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