12/27/2013 01:05 pm ET Updated Feb 26, 2014

Repaying College Loans on Minimum Wage

Never have so many received so little for so much, and never have so many paid so much with so little.

College and university campuses are places that are well-known for their annual traditions, but one of these "traditions" is neither a source of great pride or school spirit. This annual ritual has sorely diminished the value of education for most college graduates across the country. I am speaking of the annual tuition increase. The insatiable budgets of most colleges have resulted in annual hikes in their student tuition and fees that exceed the rate of inflation. This disconcerting and unsustainable trend has been readily apparent for the last 30 years, as documented in a recent "Trends in Higher Education" report put out by the CollegeBoard.

As colleges spend more each year, they require more revenue; and as long as students are willing to pay more, college prices continue to balloon. Students are simply taking out larger loans and assuming more debt. In their "Project on Student Debt," the Institute for College Access and Success recently reported that 71 percent of college seniors who graduated last year had student loan debt averaging $29,400 per borrower in federal and private loans combined. This is a figure that has increased an average of six percent per year for the past four years.

So, college students are paying more for their education each year, but are they really getting more for their money? Again, the national statistics would say "no." While the number of college graduates in the U.S. steadily grows each year since the recession started in 2008, they are reporting themselves to be unemployed and underemployed in higher numbers. A report on "University Enrollments and Labor-Market Realities," by the Center for College Affordability and Productivity, has shown that about 48 percent of employed college graduates last year were in jobs that required less than a four-year college education. Of them, 37 percent were in occupations requiring no more than a high-school diploma.

With more college graduates settling for unskilled labor positions just to stay afloat in this troubled economy, how has this affected them? In two words, "low wages." The current federal minimum wage is $7.25 per hour and the number of college graduates working minimum wage jobs has more than doubled since the recession started. According to the Bureau of Labor Statistics, last year, 284,000 college graduates were working at or below the minimum wage. This is up from 127,000 in 2006.

Let's put all the pieces together. Colleges and universities increase their spending each year and pass along more costs to their students in the form of higher tuition. Students are receiving the same education as in previous years, but paying more for it. College students are forced to borrow more money each year and today's graduates are facing unprecedented student loan debt. In the midst of a lagging economy, college graduates without specific or updated skills are finding themselves unemployed in record numbers. To find work, more and more college graduates are accepting low wage jobs that do not require a college education. Upon graduation, their college loans are no longer deferred, and many graduates must begin paying back their loan debt while earning minimum wage. And this is how the annual "tradition" of tuition increases is diminishing the value of education for most college graduates across the country.

The promise of a better lifestyle has motivated students for years to pursue their college education. Instead, what they have found lately is higher debt and fewer employment options. New college graduates are learning the hard way that the typical college degree is not worth what it used to be. Young borrowers with climbing debt, who are facing low and stagnant wages, are encountering severe economic consequences beyond just launching their careers (e.g., difficulty in establishing independence from their parents, inability to purchase a first home, or delays in starting a family). Not exactly the "better lifestyle" for which they had hoped.

Now let's close the loop. As more college graduates are taking jobs that would have gone to workers with a high school diploma in the past, the unemployment gap between college graduates and high school graduates is widening, as recent analysis has shown. With fewer employment opportunities in this economy for persons without a college degree, many more are looking to improve their odds by going to college. Many colleges are facing a record number of prospective students. Struggling to admit more students each year, their cost of operations go up. Colleges and universities increase their spending each year and pass along more costs to their students in the form of higher tuition, and the cruel tradition continues...

In the final analysis, many of today's students are receiving a traditional college education with limited employment opportunities, but paying more for it each year -- never have so many received so little for so much. And an ever-increasing number of college graduates must begin paying back their student loan debt while earning minimum wage -- never have so many paid so much with so little.