Student debt will bury next generation

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There’s a story about financing a college education you might like: I knew this kid who was able to pay his way through college by working summer jobs and some, too, during the academic year, but not enough to keep him from investing in study time sufficient to graduate with a bachelor’s degree in four years.  Thereafter he was hired as a high school teacher who departed his college campus without a cent of debt.

Who was that kid?  That kid was me, an Oregon-born youth who attended a public high school for four years and then went directly from the 12th grade to college at a private university.  I’d not been a serious student in high school and worked after school instead of playing sports, which meant that I started college without a scholarship while my parents were in no position to help me financially.  My story wasn’t unusual .  .  .  in the 1960s.

So, what happened to make my story different from today’s stories?  Well, for many reasons, including steep tuition increases due to reduced state funding and capitol campus costs and efforts by colleges to attract higher-achieving students from the best secondary schools in the nation, the cost of a college education has gotten a whole lot more expensive.  So expensive in fact that it’s highly unlikely that any youth these days can secure a summer job and during-the-school-year job that will pay the tab of getting a college education.  Mainly, a huge number of our youth are finding it necessary to borrow the money to enter a college while they typically leave with staggering debts.

The Associated Press reported that about 37 million college graduates are burdened with  up to $1 trillion in student debt and that they “may never catch up with wealthy peers who began life after college free from the burden,”  according to AP reporter Carolyn Thompson. Those in deep debt spend at least 10 years of their lives paying off the principal and interest on the loans they’ve incurred and, due to large re-payment schedules, are constrained from normal American consumer lives.

Thompson offered these facts: 40 percent of households led by those 35 years old or younger have student loan debt; 12 million American college students take out student loans each year; the average student loan debt from a four-year course of study is in the range of $26,000 to $29,000.  According to the Federal Reserve Bank of New York, “student debt is the only kind of household debt that rose through the recession and now totals more than either credit car and auto loan debt.”

There are pay-offs for college graduates when those who can get through get out with a diploma and also can get a job in concert with their college training and education.  Based on the Pew Research Center of census analysis, “college graduates ages 25 to 32 working full time earn $45,500, about $17,500 more than their peers with just a high school diploma.”

Meanwhile, the hew and cry over this is that it’s tragic for the  individuals denied and the nation deprived to allow initial cost and anticipated debt to prevent so many from getting a college degree and fulfilling their potential.  Other nations like those I’ve noted in a previous column, the Scandinavian countries, do so much better than the U.S. in making it possible for their youth to realize a post-secondary education.

There are proposed relief plans exampled by President Obama’s “pay-as-you-earn” repayment plan,  lower interests rates for college student loans (Sen. Elizabeth Warren), and student “student investment plans” wherein private investment firms would cover tuition costs to be repaid later as a fixed percentage of a graduate’s incomes for a set number of years (Sen. Marco Rubio).  Meanwhile, the “beat” goes on and on with no action taken and no real prospect of any legislation passing Congress that would take action.

We endure a do-nothing Congress that apparently can only think of themselves and their own kids.  So, it may be well worth it, if you value a college education for your offspring, to open an education savings account on the day your child is born and keep making the monthly installments for the next 18 years.

(Gene H. McIntyre lives in Keizer.)

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