05/15/2012 05:51 pm ET Updated Jul 15, 2012

Student Loans and the Education Crisis

As anyone familiar with the subprime housing debacle will surely see that the current student loan crisis has a similar feeling about it. In fact, now that more careful statistical studies have been done, we are beginning to know the extent of the crisis. 70% of college graduates carry debt load, and the average amount owed topped $25,000 last year. Education debt is greater than credit card debt and car loan debt in America.

In 2007-2008, just before the great crash, lenders provided 17 billion dollars for student loans, an increase of over 500% from the previous decade. What this means is that millions of Americans with college degrees are now indentured servants, bound to their masters for twenty years to a lifetime before they can take on more debt to buy a home or car. We used to say America is Opportunity. Now we say America is Debt.

A slew of new books, like Andrew Delbanco's College, argue passionately for the survival of the residential college experience for our young people, but the reality of affording such an experience pleads for reform and fundamental change. Anthony Grafton's review of College puts the matter succinctly when he says "...a shake-up is coming, and possibly something more dramatic."

Speaking of dramatic, certainly one of the answers is online education: cheaper, more practical and widely available. Even the most prestigious are in the game: Harvard and MIT recently announced their free course offerings over the internet. MIT's "Circuits and Electronics" enrolled 120,000 students, 10,000 of whom passed the first exam.

I currently teach an online Masters degree course in philosophy, a course monitored by the Distance Learning and Education Council, which approves and monitors online education for over 200,000 students nationally. The DETC is a non-profit agency which monitors online programs to insure high standards, and their monitoring is more rigorous than what counts for supervision for courses given on campus.

Those who support the residential college experience argue against distance learning on the grounds that students need to leave home and have the experience of peer interaction, personal freedom, and time to discover who they are as young adults. All true, but the cost of such an experience and the debt incurred negates the value of that experience.

For starters, one innovation may well be to cut the cost in half and support two-year residential programs with two years of distance learning. After all, students now in residence spend an inordinate amount of time online in their expensive dorms. Why not do more at home or in the library or coffee shop? Students can also hold down jobs to help pay for the residential experience.

The reality is that America is not going to return to the "good old days," and we need to be creative, innovative and practical, especially in our responsibility to give the next generation a shot at preparing for a future that will severely challenge their knowledge and skills. Saddled with huge debt they won't have a chance.