Anya Kamenetz writes in a new column available online that student loan debt could be similar to the mortgage bubble. Student loans total about 830 million dollars. That’s larger than all the credit card debt in the United States. Nontraditional student are often hardest hit. I quote Ms. Kamenetz –
From where I’m sitting, the buildup of the national student loan balance looks like a massive betrayal of trust. People have been told for decades that this is “good” debt. In fact it’s really, really bad debt. Increasingly, high unmanageable debt burdens are falling on those least prepared to deal with the stresses and costs of college: the so called “nontraditional” adult, working-class student who is more and more likely to attend for-profit colleges that cost an average of around $14,000. And 40% and higher of these students are defaulting.
If, as a nation, we are going to increase our graduation rate, we will have to find different ways of financing. The current system with nontraditional students defaulting at a 40% rate is neither sustainable nor in any way effective.
In an article on the ABC World News site, they outline the grim statistics of U.S. graduate rates, 12th in the world.
Nationwide, 40.4 percent of 25- to 34-year-olds held such degrees in 2007, falling far short of Canada’s 55.8 percent, as well as South Korea and Russia, both of which had 55.5 percent rates, according to statistics from the College Board.
I firmly believe our current method of student borrowing is a drag on the graduation rate. It’s a drag on the decision to go to college. There are some people that believe owing a half million dollars for a medical degree is not a good investment.
If college graduation rates are a good measure of national success then why do we discourage people from going to college in the first place? As a policy it is a good idea for only the well-off to go to school?
Right now, someone is reading this article and saying, “They can work while going to school, I did, look at me. I did it on my own.” Or some other method of self help. The statistics are clear, self help is not effective. The more we rely on it, the fewer graduates we are going to get. As citizens in common, as members of a human community we have duties to one another and helping people get ahead by means of an education is one of those responsibilities.
Should the United States which was first in college graduation rates ten year ago decide to abandon its position as a successful nation, a good formula is to have a system where educational endeavor is tied to large debt loads.
Tell me the name of another nation any where on earth that finances college attendance by loans of the size and weight we have here. Borrowing for an education is not something I am opposed to, but education should be financed by a wide variety of methods, so that student loan debts are manageable and limited in size.
James Pilant
Pilant's Business Ethics Blog 
I understand where you are coming from. For someone who is getting ready to graduate with his first undergraduate degree, I consider myself lucky that I am only $30,000 in debt for it.
I think there is something to be said about being a “self made man/woman” and working hard for the things you have. I think your logic against self help is flawed. The statistics only show “what is”. It does NOT show “why it is”. You point to the statistics and say “self help is not effective.” Perhaps the statistic is the way it is because of a lack of motivation and initiative to help ones self.
I do agree, however, that it is the non-traditional student that is having the hardest time. Most of the scholarships and financial aid (including loans) out there are designed for and geared towards traditional students like myself. My mom decided to go back to school a few years ago to get her B.A. in accounting. Its hard for her to figure out how to pay for it each semester even though she is only taking 1 or 2 classes at a time.
LikeLike
I’m not against self help but the verdict is in, we rely almost purely on self financing of education and we are moving toward a poorly educated population. It drives people out of the market for education and saddles the rest with enormous debt.
Is it even fair to do it this way? When and where did someone decide that a bank was going to own you for the rest of your life? Where was it said that the federal government will enforce the collection of that money and that it can never be bankrupted except under the most extreme of conditions.
This isn’t an educational system, it’s pure exploitation. It’s a bankers dream, a population virtually permanently indebted. Twenty or thirty years of continuous interest payments.
And it’s probably not fixable. Anti tax zealotry is at all time high and the doctrine of self-help so firmly imprinted in current American thought that it seems crazy to challenge it.
Well, I do challenge. Doing for yourself is all well and good but a nation and a people have responsibilities. We can’t do every thing for ourselves. We can’t fix all of our own problems.
For minimally 70,000 years humans have prospered against all competition by cooperation.
We can see right now in those statistics what happens when you a doctrine of pure self help takes over. Some prosper, some don’t. Well, that’s wonderful in the context of creating your own business but it’s catastrophic when it becomes the rule in national defense, education or medicine. We cannot defend ourselves against foreign aggression. We cannot successfully compete education wise against nations willing to put more resources into their systems, and last and certainly not least, telling people to buy their own insurance and pay their own medical bill is not an opportunity for self help, it’s an opportunity for legalized extortion and bankruptcy.
You can’t defend yourself against foreign aggression because the other side has artillery, tanks and aircraft. The higher the proportion of the educational costs a society is willing to carry, the more people will go to school. And last (and certainly not least) when you are dying or your child is in pain, you have zero bargaining power. As long as you are not ill you can contend with the system. The moment your life is on the line, the instant that your child begins screaming in pain, you are going to pay and pay. Self help is garbage in those circumstances.
Self help is a disaster not because it’s wrong but because we don’t know how to apply it.
Education is supposed to be a life time endeavor but people stop dead in their tracks because they foolishly think a pretty document is significant. Optimism is a preached value, when alone it is relatively pointless. Self help doesn’t mean thinking positively, it means working hard.
We only seem to talk about self help when it’s money or attitude. Self help is about making more of yourself. It’s not about working about part time unless it has that effect. It’s not about thinking positively unless that goes with word aimed toward that optimistic goal.
It’s about the fight, the good fight, where you fight for your soul, your country, your fellow man. But all I seem to hear is self help used to sever the bonds between we as a people, the rich and the poor, the employed and unemployed, the intelligent and the less intelligent, the well placed and those without connections. Self help is not something that replaces our responsibilities, it is a tool to help us fulfill them.
It is written –
6 Is not this the fast that I choose:
to loose the bonds of injustice,
to undo the thongs of the yoke,
to let the oppressed go free,
and to break every yoke?
7 Is it not to share your bread with the hungry,
and bring the homeless poor into your house;
when you see the naked, to cover them,
and not to hide yourself from your own kin?
8 Then your light shall break forth like the dawn,
and your healing shall spring up quickly;
your vindicator* shall go before you,
the glory of the Lord shall be your rearguard.
9 Then you shall call, and the Lord will answer;
you shall cry for help, and he will say, Here I am.
If you remove the yoke from among you,
the pointing of the finger, the speaking of evil,
10 if you offer your food to the hungry
and satisfy the needs of the afflicted,
then your light shall rise in the darkness
and your gloom be like the noonday.
11 The Lord will guide you continually,
and satisfy your needs in parched places,
and make your bones strong;
and you shall be like a watered garden,
like a spring of water,
whose waters never fail.
12 Your ancient ruins shall be rebuilt;
you shall raise up the foundations of many generations;
you shall be called the repairer of the breach,
the restorer of streets to live in.
We have duties to perform.
James Pilant
LikeLike
Not many will be able to argue with you on this.
It is a pleasure to read your thoughts.
God Bless.
LikeLike