I'm repeating some of the points in the article in my screed here, but, I think the key issue from my perspective (I graduated from a top private university in 2008) is that if people of my generation had jobs in line with our level of education this wouldn't be as big of a problem - as the example included in the excerpt illustrates.
In past decades, with my geology BS (and an MS too) with my specific interests and expertise I'd have been recruited right out of school to an oil company or similar where I would be making a lot of money even in entry-level positions (though actually I want to stay in academia, for the record) - according to professors and others who have been around for a while.
My friends with their other science and engineering degrees would be in similar positions. Indeed though one or two are actually in that position, it's not that bad for everyone... except they are now engineers at defense contractors, which is not something I'd do personally...
Instead we've had to beg and grovel to get anything, with only the luckiest getting jobs actually related to their education (or any job at all) - not to suggest that a job directly related to your education is something that's ever been super common... except that it is within STEM fields - and if they do it's at a salary far below what it's worth. And so those with loans find it difficult or impossible to pay them off.
Honestly I can scarcely imagine how bad it is for most people, considering how bad it has been for all the STEM people I know.
Actually... the other thing I glean from the article is that if we were able to get decent jobs, the situation would only get worse because they'd use that as a justification for increasing costs etc.
One more key point - have a look some time at inflation-adjusted middle-class wages over 30-40 years. It's sickening, and it's the intentional result of policy choices, and we know how to fix it, but we'd rather elect guys who let us have all the guns we want.
My niece will graduate soon with a quarter million dollars in debt. I don't have any good advice for her.
While mentioned in the article, I think the inflation in the requirements to have a degree even to do clerical works needs more emphasis. At some level, an oversupply of college degrees compared to jobs for which a college education is actually needed has resulted in employers requiring college degrees for more menial work. The very idea that more people with degrees mean better earnings for everybody is the worst sort of confusion between cause and effect. And it has led to public policies that encourage a "red queen race" in education, where the current generation has to run much harder (get more degrees) to, at best, stay in the same place (get a halfway decent job).
That is why I regard the student loan mess as more of a stealth pay cut than a stealth tax. Because the utility of a college degree is largely set by employers and not the government.
I think the education system and the education industry need to be looked at radically. By this I mean we should be asking what purpose they serve, whether they are actually serving this purpose, or whether some other method or system for training and informing people would accomplish more for less cost. Credentials and and length of exposure to academic environments should not be confused with knowledge, intelligence, or competence.
Honestly, I think if students were looked at like customers, they'd be treated with a little more respect.
I got angry at one of my (terrible) profs and pointed out that without tuition dollars, he wouldn't have a position, and his rebuttal was that most students' parents, or grant money, was paying for it; besides, he was paid primarily for his research so who needed students? That explains why the university had a freakout and round of layoffs when enrollment dropped, right?
I really don't know the answer. You have a bunch of forces, some of which are even well meaning, creating a disaster. Federal funding combined with an inability to go bankrupt is the root cause of the pain. Universities are responding in a blandly predictable way when confronted with nearly infinite money and high demand... they charge more and build. Employers too are responding in a rational way. Employers get a stack of resumes a few inches thick on the desk. They can't possibly interview even 1% of them. So, they just toss in the trashcan anyone below a certain education level, regardless of how important it actually is.This makes students even MORE desperate to accumulate degrees leading to more demand for colleges and them willing to take on even more debt. Rinse and repeat.
Eventually, the system has to collapse. Eventually, you hit a breaking point where the cost of education is so high people are like "fuck it" and find alternative means. I personally think we are in the midst of a college bubble, and think that its collapse is going to be as ugly for some places as the house bubble was.
The only answers I can think of would hit the poor and the humanities disproportionately. Simply making it so that people can go bankrupt and make it so that student loans are handed out by a rational actor that doesn't want to lend to people doomed to go bankrupt would fix the problem. Are you from a wealth family and want to be an engineer? Cool, here is a pile of money. Pay it back. Are you poor and want to be a sociologist? You are poor and will always be poor. No one is going to give you money for you to go bankrupt on. GTFO. That would cause prices to plummet, but it would have some nasty side effects. Non-STEM programs in universities would be gutted. STEM programs might see tuition drop, but not by all that much. A lot of industries and research that are riding the wave student loan money collapse. Perhaps most importantly, poor people would be screwed and have to fight like dogs for scholarship funding.
I went to one of the best schools in the country but ended up with 100k of debt from grad school. I have a good job now, just started recently, but I'm looking at my payments and its hard not to just be depressed about having to realistically pay 1k every month for the next ten years to get out of this. Part of why i have the good job is I jumped ship from a field I enjoyed but had a poor career pay to one that I still enjoy but pays better....dunno, I think we'll survive as a country with the debt but we'll be worse off mentally. Not all fields pay 100k, and people shouldn't feel they can't get a degree if they want to be something that simply doesn't pay as well.
I have one more year till graduation. Getting students in, and getting loans at the three colleges I've had to attend is streamlined. It's a given you will be getting loans. Not getting loans is the exception. Part of that is the tuition costs, and book costs, have skyrocketed to the point of ludicrous. But, then, why would the universities care? They have guaranteed student loans to hand out to students.
The community college I went to was like a factory. I saw really young kids in, with loans, and dropping out at a rate that should have been looked at. My federal loan paperwork showed that only 24% of students that started there graduated. Why the hell would the universities care? They get tuition if you so much as sneeze in their direction, and it doesn't matter if you show up to class.
There is literally no way that I could work, and go to college, and pay my college costs at the same time. I'm not talking about McDonalds jobs, either. I have an LPN. I could get a decent nursing gig. Still, the costs of tuition, books, etc, are so high right now, I can't get it paid for without loans.
This wasn't that way ten years ago, even.
This isn't to deny anything else that has been said, there are very good points. But what rarely gets discussed is the effect student demands for luxury services has had on the cost of education. Two local schools, Georgia State University and Kennesaw State University, have both had student bodies vote to increase their fees by hundreds of dollars per term so they could have football programs. Football is not necessary to get an education but students want the whole "college experience" and are willing to increase their costs to do so. Few students live in residents halls anymore with a shared bathroom down the hall because a huge supply of high end apartments have sprung up near almost every college campus to capture loan dollars. The only way universities can compete with these private apartments is to either require students to live on campus, which can drive students to attend other schools, or upgrade dorms to offer similar amenities.
This of course is not the only reason why costs are high. I won't even say it's the primary cost, but these student luxuries are a contributing factor and ignoring them may seem like it's ok because it's not the prime factor but a dollar is a dollar and these things add up quickly. It's hard to have credibility when demanding a reduction in the cost of education while at the same time demanding to pay more so you can have a football team that will almost certainly never be one of the dozen or so money makers.
In the case of Georgia State University, a student taking only two classes gets hit with a bill of $263 to support sports per term. Add in $53 for the rec center, $92 for the not very descriptive "activities" fee, and $36 for a student center, and you can see how even if tuition were low, the cost could quickly spiral out of control.
Ssocial Security checks can also be garnished for tax debt and child support debt. Please update your article.
Taibbi is indeed a treasure and one of the few real journalists left in America. The problem is that he calls out these major scandals that are hiding in plain sight and should be obvious to anyone who is really paying attention because the corruption is so blatant and institutionalized. Unfortunately, nothing is ever done to correct what he points out in his stories precisely BECAUSE the corruption has become so institutionalized, with everyone from university presidents (and CEOs in the case of corporate America), the news media and national politicians right up to and including the White House getting a cut of the pie in one way ore another.
Well, looks like we need a Jubilee ---forgiving all debts by decree every 7th or 10th year . . .
The article makes good points, but it totally misses any economic analysis. I feel sorry for the students, but what can I do to help? What policies could I vote for that would actually help students?
Unfortunately the most obvious policies that come to mind will make matters worse. For example, trying to regulate lending practices with more disclosure requirements. Big lenders will manage to weasel around the disclosure requirements just like credit card companies do, and nothing will change. Except it will be an even higher barrier to entry for smaller local lenders, cutting down healthy competition in the industry.
Another example is debt forgiveness, such as in bankruptcy or in a 7 year Jubilee as strangefriend says. But who backs up the loans? The taxpayers. So both these suggestions would INCREASE the flow of federal money to lenders and universities. This flow of federal money and guarantees to lenders is how universities were able to jack up prices in the first place and are the root of the problem.
For example, suppose student loans were dischargable in bankruptcy. When a new student goes to talk to the financial aid center, what do you think the advisor is going to recommend? They are going to recommend the biggest, most risky loan that can possibly be approved. They'll explain to the student how if they don't manage to get that great job they want after graduation with their English degree, it's no big deal since they can declare bankruptcy and start over. Loans will get even bigger, the university will see an increase in demand and so raise prices, and the problem just got worse.
You do NOT talk about Project Mayhem.
A classic argument - people will break the law, so there should be no laws. It gets applied to gun laws regularly, but I don't hear it often with regard to financial regulation.
There actually is a perfect solution. Many nations send their young people to university for free. Financing is negotiated between the government and the institution in a way that guarantees quality education, without offering big profit margins. The same system works just fine at the K-12 level, which is why some people are determined to destroy it.
Because it is Socialism and therefore evil.
If only that was actually a feasible thing. I actually wonder if Israel ever did that. It's in the book, but that doesn't mean anything most of the time.
Randy Wall Street boys are laughing to their green banks as they make arrangements to also pump and dump your liberal arts major daughters. The answer to all of this is to inflate our way out of these fixed dollar debts by a new generation of voters who finally listen to us Ph.D. chemists that Global Warming is a scam. If you continue to vote for artificial energy rationing, those liquid fossil fuel dollars will remain in the ground instead of both fertilizing the biosphere and initiating yet another economic boom that will see wages rise in absolute dollars as debts remain the same. When 350 NYU gals just signed up for SeekingArrangement.com though, I don't see the problem, but then again I'm a 47 year old bachelor who programs robots at home. After two laboratory positions as an undergrad, Columbia and Harvard paid me instead of charged me for the next eight years, since science students bring in massive grants. At Columbia, as the Internet was becoming a libertarian playground, I also found time to create The Macintosh Cryptography Interface Project, a port of the encryption program PGP to the Mac, way back in 1994. I called myself -=Xenon=- but now I'm just -=NikFromNYC=-. Welcome to the future, hipsters. The worldwide IQ and emotional intelligence test your generation just failed singles you out as mere extras in our old guy paradise. Kewl, huh!
What idiot decided that education should be a profit making business? Education should be seen as the thing that builds a culture that is worth having a defence policy to protect.
unfortunately, according to some people, everything's gotta be taken care of by "the market".