Two weekends ago, I dropped off my daughters at college. As any parent with children in college knows, this is a bittersweet ritual -- piling your kid's belongings into your car, getting them set up in their dorm rooms, then getting shooed away, leaving them with classmates, friends, deans, and professors. Of course, it's bittersweet mostly for the parents. For the kids, it's about anticipation, excitement, the sense of possibility. We are thinking about the past (weren't they just starting kindergarten five minutes ago -- how can they be going to college?). They are thinking about the future.
This year was particularly poignant for me because my older daughter is beginning her senior year; I was dropping her off for the last time.
As I made my way back to New York, I had a chance to reflect on the opportunities that going to college had given me. When I was 16 and living in Greece, I saw a magazine article about Cambridge and was overcome by a desire to study there. And I was lucky enough to get in. In the years after graduating, pretty much every break I got -- all those small but pivotal early steps in establishing one's career -- could be traced back to that experience.
Unfortunately, growing numbers of today's college students are having a very different experience than mine. It's not the education that's changed; it's the circumstances surrounding it. Increasingly, graduating from college no longer means putting your education to work for you -- it now means being a virtual indentured servant to your education. Instead of propelling you into the future, more and more it means trapping you in the past.
And since a new class of students is off to college this month -- replacing a class that just graduated into a historically bad job market just a few months ago -- there's no better time for a new installment of the HuffPost College series "Majoring in Debt," which examines the mountainous student debt college graduates are taking with them, what it will mean for their futures, and what it will mean to the future of America.
The statistics paint a sobering picture of how much the experience of getting a college education in the United States has changed.
For the first time, student loan debt will be approaching $1 trillion. In 2000, that number was around $200 billion.
Also for the first time, last year student loan debt outpaced credit card debt.
In the last decade, student loan debt has skyrocketed by over 500 percent.
In the 1990s, less than half of those graduating with a bachelor's degree did so with debt. Now it's two-thirds.
The average 2011 graduate entered the job market carrying around $27,200 of debt, according to Mark Kantrowitz of the financial aid websites Fastweb.com and Finaid.org.
The debt load is now so great, says Kantrowitz, "in the coming years, a lot of people will still be paying off their student loans when it's time for their kids to go to college." That will certainly change the fall ritual. Parents can drop off their kids' stuff at the dorm and then the whole family can take a trip to the student loan office.
Of course, today's college grads are not only entering the job market with a crushing debt burden, they are entering it at a time when the unemployment rate for those 20-to-24 years old is nearly 15 percent.
According to economist Andrew Sum, the number of college graduates under 25 who are "underutilized" (e.g. working part-time, working at a job that requires no college degree, like bartending or waiting tables, or just plain unemployed) is over 3 million.
To put the challenge these college graduates are facing into perspective, consider this startling statistic: right now there are about the same number of jobs in America as there were in 2000 -- but there are 30 million more people in the country.
And for those recent grads lucky enough to find work, wages have actually dropped over the last ten years.
The job market is so bleak, that, as the New York Times recently reported, the defining trait of "Generation Limbo" grads is giving up the careers they dreamed of and figuring out some other way to make ends meet. For many, that means state and federal assistance. "You don't expect someone who just spent four years in Ivy League schools to be on food stamps," said Stephanie Morales, a recent Dartmouth graduate who has half a dozen friends on food stamps. "We are passing on these traditions on how to work in the adult world as working poor."
Given all this, it's no surprise that young adults are living with mom and dad in historic numbers. A U.S. Census report from May concluded that the percentage residing with their parents has jumped to 34 percent, largely because of bleak economic prospects.
It's hard to be excited about your future when you're moving back into your past.
As HuffPost's Amanda Fairbanks reported, in an effort to pay down college debt, an alarming number of students are turning to so-called "sugar daddies." The sex-for-tuition arrangements are facilitated by a new collection of startups, such as SeekingArrangement.com. "Over the past few years, the number of college students using our site has exploded," says Brandon Wade, the site's founder. "College students are one of the biggest segments of our sugar babies and the numbers are growing all the time." Not exactly what parents had in mind when they dropped off their kids for orientation week.
So, over the past half-century, we've gone from the G.I. Bill to Sugar Daddies. The former was a forward-looking tool that helped pave the way for unparalleled economic growth and what came to be called "The American Century." The latter is just another symbol of our self-inflicted march toward failure and decline. From the Greatest Generation to the Most Indebted Generation.
In fact, the post-9/11 G.I. Bill, modeled on the original and designed to help returning veterans of the wars in Iraq and Afghanistan, was cut as part of the budget deal the president and Congress made last December. And in the recent debt-ceiling deal, a program designed to ease the debt burden of graduate students was cut.
It's not just current students -- and those who might have been students -- who will feel the pain. As the Atlantic's Daniel Indiviglio writes, the failure to keep this vital path to upward mobility open for successive generations will impact us all:
All this college debt could put the U.S. on a slower growth path in the years to come. As Americans grapple with high student loan payments for the first few decades of their adult lives, they'll have less money to spend and invest... higher education is supposed to enhance a nation's growth, but with such an enormous debt burden, graduates might not be able to spend and invest enough to allow that growth to occur.
So the downward spiral continues. In the hope of reversing it, we continue to shine a light on the problem. In February 2010, we launched HuffPost College with the first "Majoring in Debt," which featured stories of nine students and recent college graduates saddled with massive loans. Among them were: Dan Olson and Evan Young, a couple whose combined debt topped $120,000; Sara Tobin, a Tulane student who said that the value of her childhood home was less than her loan debt; and Sonia Galindo, a graduate of the University of Texas-El Paso, who said the only answer to her loans would be "a miracle."
Since then, HuffPost College has stayed on this under-reported story, including the Catch-22 of how the jobs crisis makes paying off loans nearly impossible. We've invited our readers to share their own stories, and the response has been both unnerving and inspiring. Though today's graduates may leave college brimming with optimism, there remains the stubborn fact that, for far too many of them, harsh reality will soon set in.
Education has always been the cornerstone of America's promise of upward mobility -- the gateway to middle-class life. As President Obama said in his 2010 State of the Union speech, "in the United States of America, no one should go broke because they chose to go to college."
As he gets ready to announce his jobs plan to the nation on Thursday, let's hope the president keeps this in mind, and presents us with a plan big and bold enough to include a way forward for today's college students. They deserve a future full of possibilities, not crippled by massive student debt.
Check out the new "Majoring in Debt" here, and the earlier installments here and here.
CORRECTION: An earlier version of this story referenced a study that said 85% of college graduates are returning home to live with their parents. That statistic was picked up by reports in Time Magazine and subsequently in HuffPost. PolitiFact debunked the widely cited number. A Pew study in December 2011 found that "39% of all adults ages 18 to 34 say they either live with their parents now or moved back in temporarily in recent years," including 53% of those 18 to 24. While educational status didn't appear to impact living status for those under 30, it did make a big impact after that age. All of this is far better than the purported 85% of college grads returning home, but these number aren't exactly low. A sobering statistic from Pew: one-in-ten college educated adults between the ages of 30 and 34 are living at home.
Being a Atheist I don't often use the Bible but here goes: Jubilee is in the bible...it is a concept that actually pre-dates the Bible. I first came in contact with this term watching the following interview about DEBT. Other countries actually pay student to attend college, once again Profit-motive destroys a good thing by continually extracting more and more profits...much like the problem with Health Insurance and GMO's that use to be non-profit.
http://www.youtube.com/watch?v=SnOqanbHZi4&NR=1
On another note, get real. You are just paying interest. You will pay 2-3x the amount borrowed in just interest payments over 25 years. Banks/schools sell you the idea of going in debt for education by calling it "good debt" and "affordable payments" but it's a bad investment.
Deferring loan payments adds to loan principal. Banks capitalize the interest that accrues. It's a really bad idea. I'm not trying to be mean. I'm trying to alert you to financial disaster.
Also, the loan forgiveness after 10 years public service is just a proposal at this point. Big lobby against. No champions in Congress.
Making 100k is not enough to "afford the payments" and get started with your financial future (savings, retirement account, home mortgage). You will have to make "hundreds of thousands of dollars a year" to to that. And there simply is no prospect of that for "good guy" jobs in social services. It's a shame, and a horror once you sit down with a financial advisor and do the math.
Our generation is at a disadvantage to the previous. Education costs dramatically more, real estate ..., health care.... The American Dream promises afforded them are unrealistic for us. It would be better if they start telling us that when we are 15 years old. It's devastating financially to start becoming conscious of it only after you've agreed to the debt.
http://www.youtube.com/watch?v=SnOqanbHZi4&NR=1
That's mighty "pro/gres/sive," ain't it?
http://www.youtube.com/watch?v=SnOqanbHZi4&NR=1
As within that process we manage {in spite of ourselves) to realize that we have given birth to truly wonderful multi-generational and multi-geographical children who embody our secret desires of crafting the perfect architectural world, what becomes our greater surprise is the fact that they have not stepped away at all.
In their wisdom they have heard the calling of great grandparents who did not attend college but were instead 19th century industrial artisans, grand parents who may have attended college, parents who were alternative energy hippies and their peers who seek the same 21st century industrial and economic balance as themselves.
So we can borrow from China? The answer is not to further bankrupt the nation. The answer is to address the causes of the high costs. Is it so difficult to open competing colleges because of massive state and government red tape? Are College professors unionized and massively over charging? Are book companies over charging?
We need real world free enterprise answers rather than calling for more government spending. At the heart of this problem we may find government regulation designed to support a monopoly and system and over paid union workers.
Education COSTS must come down. Medical COSTS must come down. Bankrupting the government to shove the money into union pockets is not the answer.
http://www.youtube.com/watch?v=SnOqanbHZi4&NR=1
We have paid & paid & paid the banks through usurious interest & bailouts & we are PAID IN FULL. It is the birthright of every American to have a share of the land & resources they need to survive. The only reason we continue to pay is because the bankers have convinced us it is necessary. But if you buy a home for $160K at 7% interest, in 30 years you would have paid for the house plus paid $235,190 in interest, more than TWICE the value of the home. So, each time a house gets paid in full the bank makes 200% of its value & that is repeated each time the house sells. If that house sold once every 30 years since the year 1800 the banks would have made 200% 7 times since it was built! How could they possibly fail to become incredibly wealthy when every citizen that buys a home must work 20 of those years paying interest to a bank?
What if that money had been loaned by the government at NO interest because they have the power to make money? Would Americans themselves have accumulated that wealth? Would they have used it in ways that benefit them instead of benefiting corporations and banks that have no flag but specialize in making profits and in hoarding power?
Inflation is too much money chasing too few goods.
Imagine an economy with 10 apples and $10, each apple will cost $1. If the money supply is increased to $20, then the price of apples will increase to $2. If the apple supply increased to 20, and the money supply doubled to $20, then apples would still cost $1.
This is why rising oil and food prices by themselves are not inflation. As long as the money supply does not increase, any increase in spending on oil or food would be offset by a decline in demand for other goods. Other goods prices would be forced to fall; and the overall price level (inflation) would remain unchanged." http://www.cdobs.com/archive/our-columns/where-does-inflation-come-from/
Have the bankers taught us to believe that inflation is inevitable?
An undifferentiated liberal arts undergraduate degree from a non-elite college is worth far less than the cost of obtaining it. (*)
(*) I base this on an exhaustive review of the available data, plus a personal survey of several dozen recent college graduates. Among recent college graduates surveyed, STEM and professional degrees are 100% employed at high-entry-wage jobs (averaging $60K/yr plus benefits to start). Among undifferentiated liberal arts undergraduate degrees, unemployment is 40% and the average wage of those who are employed (mostly in menial entry level retail) is $10/hr.
Lesson: if you're parents are rich, you don't have much to worry about. If your parents aren't rich, then do one thing with your life: learn a skill that will pay you well, become a mechanical engineer, a veterinarian, a certified welder, a paramedic, or whatever. Don't take on debt for a college education unless you know beforehand how you are going to pay that debt off before you're 30.
Some people do not belong in a University and America needs to lose this stigmatism. And many professions must stop demanding that potential hires have all these pieces of paper!
Lucky enough to land a job back in tech. The kind of job where you are working round the clock to collaborate with the teams here during the day and then with teams in India and China in the evenings. With bay area rents + $1400 a month in interest payments, I need to make $100k now to feed and water my social security number. When I do taxes, I find that I cannot deduct student loan interest. I passed the income limit at $70,000. I don't own a home, don't have children, don't have a small business, or a farm. I pay full freight on my income; so after fed, ssi, medicare, ca income tax, I net 55% of what I have worked to earn.
So I write Nancy Pelosi and simply recite the litany above. I ask directly, why a nationwide cap? Cost of living in Iowa and San Francisco are different, right?
I get a form back: thank you for your support. She tallied my inquiry as a show of support.
Learn how to be off loans fast--get the amortization table and start working with it.
Why are we paying a bunch of people to make fake money so they can profit from us and our labor? Why are we giving 2/3rds of our labor to pay banks?
Let's take control of our country and our economy and make it serve US instead of we serving it.
I'm not doing it to fit into a failed system. I'm doing it to make my life better under the reality that is our current situation.
Even with distance learning, in which students watch lectures on-line, there is still a limit as to the number of students that a teacher should have for a class in a marking period. If a teacher has too many students, it limits the amount of time he or she can interact with students on-line, as well as reviewing and grading papers and exams.
At a big state university, where lecture halls with several hundred students per class is typical, a professor still needs several teaching assistants just to handle questions, discussions, and grading.
Obviously, the current model for college education doesn't work and could very well collapse the way the real estate market did. Yet, there doesn't seem to be any kind of solution on the horizon.
The gang of potential republican candidates are all aware that by raising educational costs will not affect the Wealthy Class. In fact, it will keep their ilk away from contamination by lower classes.
As Winston Churchill used to say, "A young conservative has no soul. An old liberal has no brain."
In fact, when I was in college, there was a lament in the very liberal student paper that too many students were going to college, not for an education, but to get the degree necesary to either get a high-paying corporate job, or to get into an elite graduate school for the purpose of making even more money (MBA, law, medicine).
By the way, if you want to learn about the goodness in life, stay away from poli sci. You get to learn about people like Machiavelli and Hobbes.