As of 2008 the cumulative student loan debt for Americans was $85,000,000,000.
College Student Loan Debt :
"A recent study by the National Center for Education Statistics (1) shows that about 50% of recent (undergraduate) college graduate have student loans, with an average student loan debt of $10,000. The average cost of college increases at twice the rate of inflation; the College Board (2) estimates that public school costs an average of about $13,000 a year and private schools costs $28,000. "
Graduate Students:
The average student loan debt of students attending:
– Public 4-year = $26,119
– Private 4-year = $29,000
Source: American Council on Education
"This debt-for-diploma system is strangling our young people right when they're starting out in life," says Tamara Draut, author of Strapped: Why America's 20- and 30- Somethings Can't Get Ahead. "It's creating a sense of futility that no matter what they do, they're not going to be able to get ahead. It's a sense of hopelessness."
source: USA Today
"The high level of student-loan debt is "on the brink of becoming an unacceptable social issue,"
"It's the single greatest problem facing this generation."
All of these statistics and statements were before the economic depression we are in.
Student loans can not be ignored, written off, or forgiven under bankruptcy.
Our higher education system has been greedy. I suspect that within the next five to ten years it will lose about 35% to 45% of its size and assets and almost all of its respect. Expect a back to basic degrees movement and a vast reduction in fees and tuition. We simply can't afford the luxury of a nonproductive American higher education system any longer.
God have mercy on the high school class of 2009.
14 comments:
I unloaded boxcars the summer of 1961. Paid my first semester junior year of college with my own funds....$123.59. A few used science texts for $15. What the heck has happened?
Greed.
Since 1968 the rise in the cost of higher education has far exceeded the rise of inflation, income, salries, wages, or any other indicator you care to look at.
The cost of higher education administration , like CEO pay, far exceeds the proportional relationship of faculty to excutive pay that it did in 1968.
Bankers make the Student Loans. Those SAME bankers sit on Boards of Regents/Trustees that set fees and tuition that students have to take out loans to afford.
Since 1968 we have had an Edifice Complex. Bankers make loans to build the buildings and/or buy bonds at a discount. The SAME bankers
'Edifice Complex'? I like that.
One would hope something as important as higher education would transcend laissez faire economics...a hopeless hope, I guess.
Where do you think we teach it?
Isn't an MBA the ticket to ride?
There's no doubt that financial aid - including but not limited to loans - has allowed the costs of education to explode. The loans just smart because you're paying long after, so you notice. Fll tenured faculty hve a very cushy life and are excessively rewarded (unsing "excessive" to desribe the compensation they'd be willing to accept and had previously accepted if it weren't for the unintended consequences of the artificial economy of gov't-distorted academia. Grad students and lecturers get hosed.
Another thing driving it is the need to differentiate job candidates on some basis, even if there is little relation between what actually goes on in schools and the value to potential employers. Completig college does signal some things - that you'll finish something, for sure - but what you're paying for is a bigger question. It may be what you're paying for is a designer label on the Emperor's new Clothes
I watched this personally from 1975 till 2002. Every year the proportion of the financial aid package that was loans went up while grants, scholarships, and work/study went down. Every single year that happened. Shortly after I disengaged from higher education the Pell grants became short funded. More people qualified than there was money for. They made up the difference with student loans.
The bachelors degree stopped having actual financial value somewhere around 2004 I would estimate. You could take the money that it cost and invest it or buy a home and you would come out about even in the long run.
Now I don't know. But I do know that higher education administration hasn't gotten the message.
Two things that you can count on in a recession/depression beer consumption and price will hold steady and college enrollments will go up. Well guess what, beer consumption is declining.
Why would a bank loan people a student loan in this climate? It is a bad bet for the bank. Degrees won't mean you will get a job. Indeed, in 1974 during that recession, I can testify that having degrees meant that they wouldn't even return your calls for a job.
So if Americans lose faith in higher education as the ticket to the future, and they can't afford or borrow enough to go to school then will enrollments go up? I'm betting no, not this time. Maybe at the two year and tech schools but not at the brand name schools or state universities who are want-a-be brand names. ( Now the Ivy League or Seven Sisters won't feel a thing.)
Meanwhile the victims of the false promises from higher education over the last decade or so, still owe $85 billion in student loans that can't be forgiven or discharged in any fashion. They were designed by the banks/Congress to be permanent debt.
For generating that debt American has perpetrated an unforgivable sin and will reap the appropriate rewards.
Now don't get me going on MBAs. I had a pretty good look at the product over the last forty years.
Heck, even Harvard agrees with me now.
The solution to this problem is to engage 21st century marketing techniques and apply them to education. Andrew Jackson University is using a series of network marketing partners that have allowed the University to create the Sponsored Tuition program. Applicants to the University enroll through one of the partner sites and get access to a zero tuition plan. There is mandatory fee structure, but without tuition, the total cost per semester has been driven below $500 - and without any government subsidies.
Andrew Jackson University maintains institutional accreditation through the Distance Education and Training Council. (www.detc.org) The DETC is the only accrediting association approved by the US Department of Education solely for the purpose of accrediting distance institutions. AJU is a Title IV eligible school, but is not participating, which also eliminates another significant cost factor.
For more information go to www.sponsoredtuition.com
Thank you Tammy of no profile sock monkey of for profit home studies via computer. That solution has always been available it solution it is for anything. But what do we do with the unforgivable $85 billion. Once upon a time Congress passed the State Post-secondary Education Entity Act to monitor cost and ability to benefit from all college degrees but the states' university lobbyist killed that off and kept on chugging along. So now? To quote Doc Holiday, it is nothing short of the reckoning.
A history professor making a quarter million a year at a satillite campus doesn't help. My two daughters are science professors who love teaching. Like most in education, they are totally frustrated with administration. It is the business end of the system and it is bloated and out of touch with the primary goal.
Maybe we should revert to some of the older university models. Let the students decide which faculty should be hired or retained and which classes should be taught and how much it should cost. Chaos you say. At first yes, but soon all parties would settle down to the business of learning.
We could let the trades(medicine-butchers-mechanics-lawyers-plumbers) run their own schools with their own rules and see who comes.
Right now we charge our children the same amount to become a business major as a nuclear physicist. The hours and courses for a Chemist are the same as an elementary school teacher. Some students are paying 125% of their actual cost of education. Some students are paying as little as 5% of the cost of their education.
It is a crime.
The current system is a house of cards. All it would take for it to tumble is some concerted student disgust.
errata: "The hours and courses for a Chemist are the same COST as for an elementary school teacher."
"The hours and courses for a Chemist are the same COST as for an elementary school teacher."
..wonder if that is because the chem students, while using higher cost equipment & supplies, are treated to a foreign grad student whose English is borderline? I read somewhere they were experimenting with credit tuition based on type and actual course costs. Popular courses and degrees
seem to vary..I remember after sputnik, everyone enrolled for some type of engineering..later
Marine Biology was hot, then MBAs..and lately around this area...Sports Medicine. Such is course popularity that the advanced Latin teacher better have a minor in coaching volleyball!!
Actually it is a function of the GI Bill. Differential tuition by actual cost of producing the course existed prior to WWII as did charging the same price for all courses.
When the GI Bill came into effect then Government regulations favored a one price per all courses policy.
Let's say that it cost the university $150 per credit hour for elementary education and $600 per credit hour for basic chemistry but the university on the average has a policy to charge the students 25% of the cost of their education. On the surface such policies are reasonable. So they average the cost of the elementary courses and the chemistry courses and come up with and average course cost of 750 divided by 2 =s $375 per credit hour. Let's say 25% of that is $95. so both the chemistry major and the elementary education major pay the same rate per semester hour. but in reality the education majors are paying 2/3rds of the cost of their education and the Chemistry major is paying 1/6th of theirs.
Now the percentages and the dollar amounts are not real in this example but they are representative of what I've seen in budgeting/tuition systems.
The differential is further exaggerated when the two student go onto the job market. The education major may start a job at $25,000 per year and the chemistry major works in a lab or manufacturing for $35,000 per year.
Not only does the low cost majors cause the students to subsidize the higher cost majors, but life time compensation is usually lower.
AND they BOTH have the SAME loan DEBT for those credit hours.
Fair? Equitable? Balance? Sane?
Why would anyone be an elementry education major. Yet those are the people we want to teach our children how to learn. We ain't so smart sometimes.
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